Regulating the Anticommons: Insights from Public‐Expenditure Theory

This article offers a new interpretation of the traditional Cournot complements problem, or anticommons, by using the theory of public goods to gain a perspective on the problem. Specifically, I examine the pricing strategies and regulation of multiple monopolies that produce products which consumers view as perfect complements. I show that collusion by the firms increases total social welfare and that the collusion problem can be reinterpreted as a problem of provision of public goods from the point of view of the firms. I take this insight further and derive the familiar concepts of the Samuelson marginal condition and the ratio equilibrium for the firms. I compare these outcomes to the first best solution and then apply incentive‐compatible mechanisms to strategically implement the Pareto superior ratio‐equilibrium outcome and the optimal marginal‐cost pricing outcome. Finally, I show how this methodology can be applied to the more familiar Cournot model of oligopoly.     

Evaluating wind-following and ecosystem services for hydroelectric dams in PJM

Hydropower can provide inexpensive, flexible fill-in power to compensate for intermittent renewable generation. Policies for hydropower dams maintain multiple services beyond electric generation, including environmental protection, flood control and recreation. We model the decision of a hydroelectric generator to shift some of its power production capacity away from the day-ahead energy market into a “wind-following” service to smooth the intermittent production of wind turbines. Offering such a service imposes both private and social opportunity costs. Since fluctuations in wind energy output are not perfectly correlated with day-ahead energy prices, a wind-following service will necessarily affect generator revenues. Seasonal wind patterns produce conflicts with the goal of managing rivers for “ecosystem services”—the maintenance or enhancement of downstream ecosystems. We illustrate our decision model using the Kerr Dam in PJM’s territory in North Carolina. We simulate the operation of Kerr Dam over a three-year period that features hydrologic variability from normal water years to extreme drought conditions. We use an optimization framework to estimate reservation prices for Kerr Dam offering wind-following services in the PJM market. Wind-following may be profitable for Kerr Dam at low capacity levels during some time periods if ecosystems services are neglected and if side payments, or reserves-type payments, are provided. Wind-following with ecosystem services yields revenue losses that typically cannot be recovered with reserves market payments. Water release patterns are inconsistent with ecosystem-services goals when Kerr Dam dedicates significant capacity to wind-following, particularly in drought years.     

Negative equity and wages

We examine the relationship between housing equity and wage earnings using nine waves of the national American Housing Survey from 1985 to 2003. Employing a rich set of time and place controls, a synthetic mortgage instrumental variable strategy, and a first difference estimator we find that people underwater on their mortgage command a significantly lower wage than other homeowners. The finding survives a number of robustness checks for reverse causality and unobserved heterogeneity. We also explore other determinants of “house lock” including loss aversion, a low existing mortgage interest rate and property tax assessment caps, but do not find these factors mitigate the effect of negative equity on wages.     

The Generalized Composite Commodity Theorem and Food Demand Estimation

This article reports tests of aggregation over consumer food products and estimates of aggregate food demand elasticities. Evidence that food demand variables follow unit root processes leads us to build on and simplify existing tests of the Generalized Composite Commodity Theorem. We compute food demand elasticities using a method of cointegration that is shown to apply to a convenient but nonlinear functional form. Estimates are based on consumer reported expenditure data rather than commercial disappearance data.     

Civil rights legislation and the housing status of black americans: Evidence from fair housing audits and segregation indices

The Fair Housing Act of 1968 made discrimination against minorities in the sale or rental of housing illegal. Twenty years later the Act’s coverage was expanded and its enforcement mechanisms strengthened in response to pressure from fair housing advocates and evidence of continued segregation and discrimination. Segregation indices and fair housing audits provide measures of the extent and nature of residential segregation and housing discrimination. High levels of residential segregation suggest that housing discrimination exists, and audits give a direct measure of the incidence of discrimination. To date, housing audits consistently show that black auditors encounter discriminatory treatment in the housing search process. Whether the strengthened enforcement mechanisms of the Act will have a substantial impact on housing market discrimination and, in turn, residential segregation, remains to be seen.     

Overt sexuality in advertising: A discourse analysis of gender responses

Recent developments in advertising imagery often involve the use of overt sexuality. Consumer responses to advertisements using a range of sexual explicitness are explored using a discourse analytic approach. The dominant negative themes articulated across sex and age groups concerned the use of sex-role stereotypes and the objectification of women. Dominant positive themes shared by both sexes involved equality in sexual representations and sexuality as art. Younger consumers' discourse concerned how advertising can add symbolic value to consumption by investing the products with a romantic style of sexuality which becomes a potent cultural form drawing its energy from the desires of the body. The shared dominant themes were supported by gendered interpretive repertoires. The unexpected gender consistency in dominant themes is discussed in relation to the cultural function of advertising as art in allowing women to speak more easily of their desires through consumption choices.

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Zusammenfassung Offene Darstellung von Sexualität in der Werbung: Diskursanalyse geschlechtstypischer Reaktionen Die neuere Entwicklung werblicher Darstellungsformen ist gekennzeichnet durch hÄufigere Darstellung von Sexualität. Konsumentenreaktionen auf Werbeanzeigen mit variierender sexueller Deutlichkeit werden mit Hilfe eines diskursanalytischen Ansatzes untersucht. Dominante negative Themen, die bei beiden Geschlechtern und quer durch alle Altersgruppen zur Sprache kamen, betrafen die Verwendung von Geschlechterstereotypen und die Darstellung von Frauen als Objekten. Dominante positive Themen, die ebenfalls von beiden Geschlechtern genannt werden, sind die Gleichrangigkeit der Darstellung der Geschlechter und die Darstellung der Sexualität in künstlerischer Form. Jüngere Konsumenten beschÄftigten sich mit der Frage, wie Werbung den Konsum mit symbolischem Wert anreichern kann dadurch, da\ den Produkten eine romantische Sexualität angeheftet wird. Die eigentlich nicht erwartete übereinstimmung beider Geschlechter bei den dominanten Themen wird im Zusammenhang mit der kulturellen Funktion von Werbung als neue Kunstform diskutiert, die es Frauen erlaubt, ihre Bedürfnisse leichter durch Konsumakte zu Äu\ern.

     

Getting closer to whales—passenger expectations and experiences, and the management of swim with dwarf minke whale interactions in the Great Barrier Reef

Whale-watching tourism is a growth industry worldwide. In Australia, with whale-watchers approaching one million per annum there has been considerable effort to develop management regimes that protect the whales while enabling the development of a sustainable ecotourism industry. A mixture of National and State laws and regulations have governed the industry (Tourism based on free-ranging marine wildlife: opportunities and responsibilities, Wildlife Tourism Research Report No. 11, Status Assessment of Wildlife Tourism in Australia Series, CRC for Sustainable Tourism, Gold Coast, Queensland) but these have been mainly derived from experiences with humpback (Megaptera novaeangliae) whale watching from vessels at sea. In this article we describe the development and nature of new and rapidly growing swim-with-whales operations based on the dwarf minke whales (Balaenoptera acutorostrata) in the Great Barrier Reef of northern Queensland. The distinctly different quality of these operations raise interesting questions for long-term management (Towards sustainable management of the developing dwarf minke whale tourism industry in northern Queensland, CRC Reef Research Technical Report 27, James Cook University of North Queensland, 30pp (emended version of SC/50/WW1)).In the 1999–2000 seasons, 453 passengers (88.1% of respondents) swam with minke whales. Only 25% of visitors came specifically for the whale interactions and 43% learned of the whales on board the vessel. Passengers thus had low expectations about whales and encounters. A variety of factors, including the diving experience, particular dive sites, a range of wildlife species and socializing contributed to visitor satisfaction. Nonetheless, there was a significant correlation between visitor satisfaction and closeness of approaches by the whales, total number of whales seen and total time spent with whales. We discuss the key issues associated with swim-with-whales programs in the light of our findings. The cooperative engagement of tourism operators, researchers and government management agencies is a feature of this new industry.     

Comment on “Revealing Differences in Willingness to Pay Due to the Dimensionality of Stated Choice Designs: An Initial Assessment”

There are very few studies that quantify the interactions and tradeoffs between statistical and cognitive efficiency in designing stated-choice studies. While a conceptual framework for evaluating cognitive strategies would be desirable, Hensher adopts a strictly empirical approach in this experiment. The success of the study must be evaluated in light of his aggregating attributes rather than controlling the number of attributes, asymmetry in the narrow-range and wide-range attributes, and lack of orthogonality between the number of attributes and number of alternatives. Nevertheless, Hensher challenges uncritical acceptance of any given set of design features and correctly insists that we confirm our experience with rigorous, quantitative experiments.