A de-biased direct question approach to measuring consumers' willingness to pay

Knowledge of consumers' willingness to pay (WTP) is a prerequisite to profitable price-setting. To gauge consumers' WTP, practitioners often rely on a direct single question approach in which consumers are asked to explicitly state their WTP for a product. Despite its popularity among practitioners, this approach has been found to suffer from hypothetical bias. In this paper, we propose a rigorous method that improves the accuracy of the direct single question approach. Specifically, we systematically assess the hypothetical biases associated with the direct single question approach and explore ways to de-bias it. Our results show that by using the de-biasing procedures we propose, we can generate a de-biased direct single question approach that is accurate enough to be useful for managerial decision-making. We validate this approach with two studies in this paper.     

Tracking the U.S. health sector: the impact of the COVID-19 pandemic

Business Economics - Health spending has grown faster than the U.S. economy for decades and currently represents approximately 18% of gross domestic product. As with other sectors of the economy,...     

Auditors,Specialists, and Professional Jurisdiction in Audits of Fair Values

Auditors frequently use valuation specialists to help them evaluate fair values, but researchers and regulators know little about how auditors use these specialists. Based on interviews with 28 auditors and 14 valuation specialists, I develop a theoretical framework informed by expert systems and professional competition theories. The interviews suggest that institutional pressures in the fair value environment unevenly impact auditors and specialists, causing tension between auditors' needs for ontological security and jurisdictional claims. This tension leads to one-sided competition between auditors and specialists and incomplete acceptance of specialists' work. Auditors' competitive behaviors coupled with this incomplete acceptance result in a tendency to make specialists' work conform to auditors' views. Collectively, these findings suggest that auditors use specialists as an institutional mechanism to create comfort, but not insight. This study links expert systems and professional competition theories, and it provides critical insight into some assumptions underlying tenets of each theory. It also informs researchers, regulators, and practitioners interested in understanding and addressing problems related to the use of specialists.     

Modelling changes in trout habitat following stream restoration

Stream restoration was implemented on the Upper Arkansas River near Leadville, Colorado, to improve brown trout (Salmo trutta) populations. Metals pollution and channel disturbance associated with historic mining, land use, and water development degraded aquatic and riparian habitat. Changes in instream habitat quality following restoration were investigated with a before–after–control–impact study design. Baseline, as‐built, and effectiveness surveys were conducted in 2013, 2014, and 2016, respectively. Two‐dimensional hydrodynamic modelling with River2D was used to estimate weighted usable area (WUA) for adult, juvenile, fry, and spawning brown trout across a range of flows. WUA was calculated from habitat suitability curves for velocity, depth, and channel substrate. Foraging positions (FP) and habitat heterogeneity were also evaluated as indices of habitat quality. All results were analysed with analysis of variance. At impact sites, WUA increased by 12.2% from 2013 to 2014 but decreased by 10.2% from 2014 to 2016, whereas FP increased by 24.8% from 2013 to 2014 but decreased by 26.1% from 2014 to 2016. Spawning habitat increased 53.3% from 2014 to 2016 at impact sites. The 15.4% increase in depth variability from 2013 to 2016 indicates that habitat heterogeneity was enhanced at impact sites. No changes in WUA, FP, or habitat heterogeneity were observed at control sites. Although changes in WUA and FP suggest that initial habitat improvements were not sustained, increased spawning habitat and depth heterogeneity suggest otherwise. Our results highlight the value of monitoring strategies that utilize multiple lines of evidence to evaluate restoration effectiveness, inform adaptive management, and improve restoration practices.     

Physicochemical characteristics of a southern Lake Michigan river plume

Riverine inputs are a major source of nutrients to the Laurentian Great Lakes and have important effects on nearshore biological processes, where mixing between river and lake water leads to formation of heterogeneous river plumes. We examined the physical and chemical characteristics of the St. Joseph River plume in southern Lake Michigan between May and October 2011, and in October 2012, June 2013 and April 2014. Specific electric conductivity and stable isotopes of water were used to quantify the fraction of river water (FRW) at sampling sites in Lake Michigan. Both tracers predicted similar patterns of FRW among sites; however, there was a systematic offset between the two methods, and specific electric conductivity method under-predicted the FRW by ~5%. We observed a distinct, seasonally varying river plume, with plume size correlated with flow rate of St. Joseph River. Within the plume, sediments and nutrients were non-conservative and exhibited significant and seasonally varying losses that we attribute to settling of particle-bound nutrients and/or nutrients in particulate phase below the plume. The characteristics and the spatiotemporal heterogeneity of the river plume documented here may have important implications for the nearshore biogeochemistry of the Great Lakes and for understanding the roles of these features in ecological processes in nearshore areas.     

a colonial example for the old lady

How could independence be given to the Bank of England? Robert Miller, secretary of the Shadow Monetary Policy Group (and Editor of Economic Affairs), argues that Britain should follow the example of New Zealand and give conditional independence to the Old Lady of Threadneedle Street.     

Ethical challenges in corporate-shareholder and investor relations: Using the Value Exchange Model to analyze and respond

Shareholder and investor relations, and the closely related area of corporate governance have been the arenas of much dispute, much of which has not been confined to practical financial matters. Ethical challenges have come as well from persons and groups with widely differing value systems. This paper presents the Corporate Value Exchange Model (CVE) as a framework for analyzing the corporate-shareholder and corporate-investor relationships, and for formulating decisions that can respond ethically to these groups without subordinating the interests of other constituents.Richard Lee Miller is Associate Professor of Management and Graduate Faculty at the University of Dayton. He has numerous articles published in journals and proceedings, the most recent of which have been on various applications of the value exchange theory.     

Managerial Incentives: Implications for the Financial Performance of Real Estate Investment Trusts

In the face of informational asymmetry, REIT equity investors may bear the costs of agency. Hence, it is in shareholders' interests to pay incentive fees to induce managers to utilize their superior information and to take suitable actions that reduce these costs. In this paper, the relation between financial performance and fees paid, and between fees paid and contractual incentives, are examined to determine whether equityholder interests are being served by the decisions of REIT managers. The data reveal that fees paid and financial performance are positively related, indicating that financial performance is at least partially endogenous with respect to managerial action. Moreover, the evidence also suggests that the industry fee structure has changed over the period in a manner that appears to have reduced the agency costs borne by equityholders, and by the end of the sample period the fees paid in general seem to reflect incentives that are consistent with the wealth maximization goal of equityholders.