An analytical model for the formation of economic clusters

A simple spatial economy derived from microeconomic foundations is presented to gain insight into the formation of economic clusters. In this model, the formation of economic clusters is a consequence of the competition between economic forces that are consistent with atomistic agents maximizing their utility. An analytic approach is used to obtain the evolution of economic clusters. With this approach, the number of clusters which will grow can be predicted. These results are derived in the traditional one-dimensional geometry and extended to the more realistic two-dimensional landscape.     

An optimization approach for managing fresh food quality throughout the supply chain

One of the most challenging tasks in today's food industry is controlling the product quality throughout the food supply chain. In this paper, we integrate food quality in decision-making on production and distribution in a food supply chain. We provide a methodology to model food quality degradation in such a way that it can be integrated in a mixed-integer linear programming model used for production and distribution planning. The resulting model is applied in an illustrative case study, and can be used to design and operate food distribution systems, using both food quality and cost criteria.     

Are VIX futures prices predictable? An empirical investigation

This paper investigates whether volatility futures prices per se can be forecasted by studying the fast-growing VIX futures market. To this end, alternative model specifications are employed. Point and interval out-of-sample forecasts are constructed and evaluated under various statistical metrics. Next, the economic significance of the forecasts obtained is also assessed by performing trading strategies. Only weak evidence of statistically predictable patterns in the evolution of volatility futures prices is found. No trading strategy yields economically significant profits. Hence, the hypothesis that the VIX volatility futures market is informationally efficient cannot be rejected.     

How did a network of marine protected areas impact adjacent fisheries? Evidence from Australia

Marine‐protected areas (MPAs) are an effective means of improving habitat quality and biodiversity in the world’s oceans. While the advantages of MPAs as a mechanism for conservation and biodiversity are well established, the potential improvements to fishery performance resulting from a network of MPAs are still being established. Countries around the world have committed to establishing networks of MPAs within their waters by 2020, in response to the United Nations Convention on Biological Diversity. This, coupled with the increasing global demand for seafood and heavy reliance on fishery resources as a source of economic development for many coastal communities, means that an understanding of how these networks can be expected to impact fishery performance is extremely important. We use a difference‐in‐difference modelling approach to isolate the change in the fishery performance associated with the south‐east marine reserve network in Australia. We find no evidence that the economic performance of adjacent fisheries was negatively impacted by the network. This lack of impact is likely due to a network design explicitly intended to avoid effort displacement in key fisheries, along with fishery management changes intended to remove excess fishing capacity.     

Rational expectations for large CGE models: A practical algorithm and a policy application

We describe a simple iterative method for solving large dynamic CGE models under rational expectations. Details are given for Australia's MONASH model but the approach applies to a wide range of CGE models. The method is automated in the RunMONASH Windows software, putting CGE modelling under rational expectations within the reach of non-specialist modellers. We provide an illustrative application in which MONASH results under rational expectations are compared with results under static expectations. The application and supporting software can be downloaded. Results from the application are interpreted in terms of elementary economic mechanisms.     

Can a Wealthy Economy Gain from an EU Membership? Adjustment Costs and Long Term Welfare Effects of Full Integration—The Norwegian Case

We employ a large scale macroeconometric model to study adjustment problems and long term welfare effects of a Norwegian EU-membership. Accession costs depend significantly on the country's level of GDP, the size of its agricultural sector and tariff and VAT revenues as these elements determine the net membership contribution. Without the transfers, integrating the economy into EU generates a small welfare gain. This result is strongly affected by a long period with under-utilisation of resources. With the net contribution included, we identify a welfare loss. This is especially so if fiscal policy is changed to maintain the public sector budgetary balance.     

A bivariate Poisson count data model using conditional probabilities

The applied econometrics of bivariate count data predominantly focus on a bivariate Poisson density with a correlation structure that is very restrictive. The main limitation is that this bivariate distribution excludes zero and negative correlation. This paper introduces a new model which allows for a more flexible correlation structure. To this end the joint density is decomposed by means of the multiplication rule in marginal and conditional densities. Simulation experiments and an application of the model to recreational data are presented.     

Measuring Efficiency: A Comparison of Multilevel Modelling and Data Envelopment Analysis in the Context of Higher Education

Data envelopment analysis (DEA) and multilevel modelling (MLM) are applied to a data set of 54,564 graduates from UK universities in 1993 to assess whether the choice of technique affects the measurement of universities’ performance. A methodology developed by Thanassoulis and Portela (2002; Education Economics, 10(2), pp. 183–207) allows each individual's DEA efficiency score to be decomposed into two components: one attributable to the university at which the student studied and the other attributable to the individual student. From the former component, a measure of each institution's teaching efficiency is derived and compared to the university effects from various multilevel models. The comparisons are made within four broad subjects: pure science, applied science, social science and arts. The results show that the rankings of universities derived from the DEA efficiencies which measure the universities’ own performance (i.e., having excluded the efforts of the individuals) are not strongly correlated with the university rankings derived from the university effects of the multilevel models. The data were also used to perform a university‐level DEA. The university efficiency scores derived from these DEAs are largely unrelated to the scores from the individual‐level DEAs, confirming a result from a smaller data set (Johnes, 2006a; European Journal of Operational Research, forthcoming). However, the university‐level DEAs provide efficiency scores which are generally strongly related to the university effects of the multilevel models.     

Unemployment or protectionism: Some choices for the USA and Western Europe to the year 2000

This article reports on the economic implications to the USA and Western European economies after imposing protectionist trade policies on selected groups of imports till 2000. The effects of this policy are also presented for Japan and the non-oil-producing developing countries. Before discussing the results of the computations and the import restricting assumptions, a summary of the methodological framework, the World Input-Output Model, used in the computation is presented.     

Distributed Decision Making: A Proposal of Support Through Cooperative Systems

In this paper we show that decision making processes evolve to be more and more distributed and asynchronous. In order to support decision-makers who are not at the same place at the same time we define cooperation processes and a set of models models able to support designers of Cooperative decision support framework. These models come from a more general architecture of a Cooperative Knowledge Based System and are based on the knowledge acquisition field. A definition of cooperative decision support framework is also given.