Expenditure elasticities of the demand for leisure services

Although some research has already focused on the analysis of expenditure elasticities of leisure demand, some shortcomings with regard to the content and the underlying theoretical model as well as the applied methods exist. This article aims at avoiding these problems to provide consistent derivatives of leisure service expenditure elasticities. Therefore, a regular demand system is derived from microeconomic duality theory. To implement leisure specific demand factors (i.e. demand- and supply-based sports and recreational opportunities as well as sports and recreational preferences) while still being consistent with neoclassical demand theory, the basic model is extended by applying the demographic translation framework. Data of the continuous household budget survey (n?=?7724) from Germany is used for the estimation of the derived demand system. It is shown how sensitive the results are depending on the applied (censored) regression model: 16 out of 18 analysed services are indicated as luxury goods based on the findings of the Tobit model type I but as necessities based on the findings of the Tobit model type II. Possible implications are presented and discussed.     

One for all and all for one: privatization and Universal Service provision in the postal sector

Universal Service provision has a special role for the public utilities sector in many Organization for Economic Co-operation and Development (OECD) countries. These public utilities have largely been subject to privatization during the last 3 decades. Efficiency effects of privatization are widely documented while the impacts on the quality and accessibility of the Universal Service are not much examined. By using a unique dataset on privatization for 21 countries over the period 1980–2007 for the postal sector, we are able to show that privatization, in particular formal privatization, has led to a decrease in the quality of the Universal Service.     

Do insurance activities enhance the performance of financial services holding companies?

Stiroh and Rumble (2006) and Yeager et al. (2007) have argued that extension of banks into nonbanking activities produces no diversification benefits for financial services holding companies (FSHCs) eligible to consolidate banking and insurance products. We investigate the effect of aggregate nonbank activities, as well as two main areas of insurance business, namely agency and underwriting enterprise, on the risk-adjusted performance of FSHCs. Our sample includes a quarterly panel data of FSHCs over the period 2003–2011. We find that the effect of FSHCs’ entry into agency insurance activities on their risk-adjusted returns is dependent on their size; it is positive for FSHCs in the top quartile of our sample (assets greater than $4.495 billions), but negative for smaller and mid-size FSHCs. The effect of underwriting insurance activities on risk-adjusted returns is generally negative or statistically insignificant, except for some of the largest-size firms.     

Information Technology As A Factor Of Production: The Role Of Differences Among Firms

Despite evidence that information technology (IT) has recently become a productive investment for a large cross-section of firms, a number of questions remain. Some of these issues can be addressed by extending the basic production function approach that was applied in earlier work. Specifically, in this short paper we: 1) control for individual firm differences in productivity by employing a ‘firm effects’ specification, 2) consider the more flexible translog specification instead of only the Cobb-Douglas specification, and 3) allow all parameters to vary between various subsectors of the economy.

We find that while ‘firm effects’ may account for as much as half of the productivity benefits imputed to IT in earlier studies, the elasticity of IT remains positive and statistically significant. We also find that the estimates of IT elasticity and marginal product are little-changed when the less restrictive translog production function is employed. Finally, we find only limited evidence of differences in IT's marginal product between manufacturing and services and between the ‘measurable’ and ‘unmeasurable’ sectors of the economy. Surprisingly, we find that the marginal product of IT is at least as high in firms that did not grow during 1988–1992 sample period as it is in firms that grew.     

The Challenge of Obtaining Quality Care: Limited Consumer Sovereignty in Human Services

Abstract

This paper offers a conceptual analysis of the problem of quality in human services: in elementary school, psychiatric care, and the health and social care of children, the elderly, and the intellectually disabled. Geriatric nursing home patients are used as a case. These care recipients cannot enforce their legal right to quality service; their quality-effective demand is low. Formal economic analyses often characterize the weak position of the care recipient as an information asymmetry problem. An additional obstacle, however, is the recipient's inability to safeguard her personal interest due to physical, mental, or social incapacities; that is, “limited consumer sovereignty.” Incapacitated individuals cannot enforce quality even when quality information is available. This creates a fundamental incentive problem in the monitoring of quality. They also depend on services that are complex and non-verifiable, making external monitoring difficult. This paper presents a typology of measures to increase the quality pressure facing providers.     

Some Determinants of Core Competencies: Evidence from a Binary-Logit Analysis

Despite the increasing recognition of the salience of core competencies in the process of competition, the notion of core competencies has remained largely ambiguous in the literature. Neither is it clear what strategies, institutions, and resources are necessary for developing and sustaining core competencies. This paper uses the binary-logit model to explore the determinants of core competencies, and identifies investment in intangible assets, marketing/promotional activities and firm size as significant determinants of core competencies. An evaluation of the technology strategies of two competence-seeking firms also points to the increasing salience of intangible assets, decentralization/globalization of the R&D function, and the intensive search for knowledge and capabilities.     

Appropriability,services and reputation

The appropriability regime (Teece 1986) that innovating service firms face is generally weaker than what firms in manufacturing sectors face. An important means to appropriate benefits from innovation that service firms can use is their reputation. This conceptual paper offers insights into how a firm’s reputation helps in appropriating value from innovation. Depending on the nature of a service, different kinds of third parties come into play in establishing reputation. In helping firms establish a reputation, such third parties influence customer decisions to acquire a service. While ‘to produce a service is to organise a solution to a problem’, and thus does not involve a third party, is true for pure services in particular, for a service firm to benefit from innovation such others are involved.     

Assessment of innovative software technology: developing an end-user-initiated interface design strategy

Knowledge intensive services and, in particular, R&D services contribute significantly to innovation in firms. The objective of this paper is to find out which characteristics of firms explain the acquisition of R&D services and to analyse whether there are differences depending on the typology of the supplier (universities, technology centres and consulting firms). Three main conclusions emerge from the econometric estimations carried out with information from a survey of innovative firms in the region of Valencia in Spain. First, the results show that firm size and age matter in the decision to buy R&D services. Second, our results are consistent with the relevance that the literature gives to human capital in absorbing external knowledge. Third, innovation policy has a significant influence on the decision to acquire R&D services, particularly from universities and technology centres.     

On the origins of vertical unbundling: The case of the French transportation industry in the nineteenth century

Abstract

This paper retraces the origins of the unbundling of infrastructure, which is a monopoly, from services, which are subject to competition. Using the case of the railroad industry in France, I examine how both natural monopoly theorists and legislation dealt with this subject in the nineteenth century. I argue that the origins of vertical unbundling date to this period with legislation pertaining to inland waterways and railroads. This was particularly the case for the railroad industry due to pricing and competition rationales. I analyze the writings of Dupuit and Walras, and show that they both agreed that infrastructure and services had to be unbundled for the inland waterways. In contrast, they expressed different justifications to defend the monopoly for the railroad industry. Following a chronological progression, the first section explores the origins of unbundling in legislation. The second section analyzes how theorists approached the way railroads had to be managed. Throughout, I highlight the interplay between their work and legislation.     

The Cost of Obesity in the United Kingdom

Summary

This study provides economic information on the costs of obesity in the UK using a modified method of attributable risk to establish the full resource implications of treating obesity and associated diseases. Prevalence estimates of obesity, defined as a Body Mass Index (BMI) greater than 30 kg/m², together with estimates of the risk of obesity-related diseases relative to a BMI range close to ideal, are used as the basis of the costing. The total costs of treating obesity and its related diseases are estimated at £355 million (in 1995 prices). The total costs of treating obesity directly, estimated at £3.8 million, are dominated by the costs arising from the treatment of attributable diseases, estimated at £351 million.