Trends in Disaggregated Import and Export Prices in Europe: Implications for the Trade and Wages Debate

We consider carefully the evidence from traded prices (as proxied by unit values) concerning the transmission of the effects of globalisation to domestic labour markets. Using standard index number techniques we decompose changes in sectoral import and export unit values into movements due to changes in pure prices of the initial bundle of goods imported or exported and changes due to upgrading of that bundle. Looking at the imports of selected European countries of textiles, clothing and footwear relative to engineering products we find evidence of strongly falling pure prices of the unskilled intensive products relative to the skilled products in the 1980s. This reinforces the view that import prices can capture the impact of globalisation in terms of falling relative prices for products produced with the intensive use of unskilled labour. However, the trends are not common across all the unskilled sectors; footwear is clearly an exception. In the absence of detailed domestic data, we look for reactions by domestic firms to increased import competition in movements in the price and composition of exports. We find evidence of stiff price competition from imports being associated with similar movements in export prices and no support for the view that import competition from low–wage countries has led to upgrading of the quality of exports.     

How sensitive are consumer expenditures to retail energy prices?

There is growing evidence that the primary effect of energy price shocks on the U.S. economy involves a reduction in consumer spending. We quantify the direct effect on real consumption of unanticipated changes in discretionary income, shifts in precautionary savings, and changes in the operating cost of energy-using durables. The possibility of asymmetries in the response of real consumption to energy price shocks is also considered. We demonstrate that linear models are consistent with the symmetric behavior of real consumption in 1979 (when energy prices increased sharply) and in 1986 (when they fell sharply). It is shown that historically energy price shocks have been an important factor in explaining U.S. real consumption growth, but by no means the dominant factor.     

Productivity differences and the dynamic effects of labor movements

Barriers to labor mobility across countries coexist with substantial differences in living standards largely attributable to productivity differences. A growth model with endogenous labor movements is used to assess the effects on output, capital accumulation and welfare of removing barriers to labor mobility. The model is parameterized so that it is consistent with evidence on historical labor movements, and is applied to two cases: the enlargement of the European Union and the (hypothetical) creation of a common labor market in the North America. The main finding is that there are large resulting gains in terms of output and welfare.     

Parimutuel contests with strategic risk-sensitive bettors

Existing models in the parimutuel betting literature typically explain betting data by either assuming a single, representative bettor with certain risk preferences or by assuming that a number of risk neutral bettors compete strategically within a game theoretic framework. We construct a theoretical framework of parimutuel markets in which we model both strategic interaction and individual bettor risk preferences, distinguishing between sophisticated insiders and recreational outsiders. We solve this model analytically for the optimal insider betting amount in a static symmetric Nash equilibrium. A new data set of 126 million individual horse race bets in New Zealand from 2006 to 2014 allows us to calibrate the model. We find that insiders (those betting $100 or more) outperform outsiders by 7.5% in terms of realized returns. The best fit of the model to the data is obtained when insiders are assumed to be risk neutral and to have an information advantage of 0.08 in probability terms. This finding provides empirical support for the common assumption of risk neutrality in strategic interaction models of parimutuel betting.     

Program context antecedents of attitude toward radio commercials

A theoretical model of program context effects on attitude toward the ad (Aad) is developed and tested. Involvement in and liking for a program are shown to exert a positive influence on both claim and nonclaim components of Aad by enhancing commercial-processing motivation. Additional analyses replicate earlier findings that Aad mediates program influence on brand attitude and identify claim strength, appeal of nonclaim factors, and number of exposures as moderators of program effects on Aad. His research has appeared in theJournal of Consumer Research, Journal of Advertising, andJournal of Economic Psychology. He has published previously in theJournal of Economic Psychology. He is the author of articles appearing in theJournal of Consumer Research, Journal of International Consumer Marketing, Journal of Direct Marketing, andEDI Forum.