Verifying gross substitutability

Summary. In labor market models as well as in exchange economies with indivisible goods gross substitutability is used as a property to guarantee the existence of competitive equilibria. This paper develops an easy way to check gross substitutability for utility functions concerning a finite set of indivisible goods (or employees) and money. Concavity is one of the conditions that has to be satisfied. Only one other, but similar, type of relation must be checked to guarantee gross substitutability. Received: 21 August 2000; revised version: 28 November 2001     

A Spatial Model of Housing Returns and Neighborhood Substitutability

This article provides a method for estimating housing indices at the local level. It develops a distance-weighted repeat-sales procedure to exploit the factor structure of the error-covariance matrix in the repeat-sales model. A distance function defined in characteristic and geographical space provides weights for the generalized least-squares model, and allows the use of all of the repeated sales in a metropolitan area to measure returns for the specific neighborhood of interest. We use distance-weighted repeat sales to estimate return indices for all zip codes in the San Francisco Bay area over the period 1980--1994.When distance is defined in terms of socioeconomic characteristics, we find that median household income is the salient variable explaining covariance of neighborhood housing returns. Racial composition and educational attainment, while significant, are much less influential. Zip-code level indices often deviate dramatically from the citywide index, depending upon income levels. This has implications for investors and lenders. Our results indicate that rates of return may vary considerably within a metropolitan area. Thus, simply using broad metropolitan area indices as a proxy for capital appreciation within a specific neighborhood may not be justified.     

我国贸易顺差的根源及外需的可替代性——基于贸易品—非贸易品的分析框架

本文在开放宏观经济的平衡关系中引入产品的可贸易性差异,探讨我国贸易顺差的根源以及外需的可替代性。研究结果表明,(1)我国国内总供给结构偏向于贸易品,国内总需求结构偏向于非贸易品,两者之间不断扩大的差距是贸易顺差不断增长的根本原因;(2)非贸易品供给不足所导致的"强制储蓄"现象,制约了我国居民消费需求的增长,使其无法有效替代外需;(3)给定国内供给和需求的结构性特征,外需增加是国内投资增加的必要条件,投资需求无法替代外需;(4)为了实现总需求构成的重新平衡,特别是提升国内消费需求在总需求中的比重,不能简单地依赖总需求管理政策或收入分配政策,必须配合以促进供给结构调整的政策措施。     

Reprint of “Product architecture modularity implications for operations economy of green supply chains”

The role of product architecture modularity is commonly in increasing product reusability and minimizing waste. This paper designs a decision support system to determine optimal product architecture modularity in closed loop supply chains. The objective is to investigate if remanufacturing and modular upgrading is appropriate at certain periods and in modules. The optimization model is tested under several production yield scenarios in order to determine manufacturing and remanufacturing capacity and production line scheduling under process yield uncertainty. The implications of product architecture modularity for operations economy of green supply chains are discussed in terms of their theoretical and managerial aspects.     

Product architecture modularity implications for operations economy of green supply chains

The role of product architecture modularity is commonly in increasing product reusability and minimizing waste. This paper designs a decision support system to determine optimal product architecture modularity in closed loop supply chains. The objective is to investigate if remanufacturing and modular upgrading is appropriate at certain periods and in modules. The optimization model is tested under several production yield scenarios in order to determine manufacturing and remanufacturing capacity and production line scheduling under process yield uncertainty. The implications of product architecture modularity for operations economy of green supply chains are discussed in terms of their theoretical and managerial aspects.     

Tradable and nontradable directed technical change

ABSTRACT

We wish to reconcile the major trends in wages and the terms of trade using a directed technical change approach in which: (i) tradable and nontradable goods can be substitutes or complements; and (ii) scale effects can be present or can be partially or totally removed. With a lower skilled labour ratio and a higher relative wage in the tradable sector, the price (real exchange rate or terms of trade) mechanism is crucial in determining sectoral productivity differences and thus wage inequality. Along the balanced growth path, the real exchange rate can be negatively related with the relative productivities in horizontal innovation (the Balassa-Samuelson effect) and with the relative labour level, depending on scale effects. The wage premium increases due to an increase in the relative labour level in the nontradable sector under substitutability with scale effects or under complementarity without scale effects. A calibrated version of the model indicates that the model closely replicates the data for Germany. Moreover, while the Balassa-Samuelson effect is quantified, an increase in the relative supply of labour in the tradable sector decreases both terms of trade and inequality.     

Intermedia Substitutability and Market Demand by National Advertisers

We assess substitute and complementary relationships among eight national advertising media classes, as well as the magnitude of their own-price elasticities. We employ a translog demand model, whose parameters we estimate by three-stage least squares, based on 1960–94 annual U.S. data.We find aggregate demand by national advertisers for each of the eight media isown-price inelastic, and that cross-price elasticities suggest slightly more substitutethan complementary relationships, although both are rather weak. These patterns areconsistent with long prevailing institutional arrangements and media selection practices.     

Factors substitutability,heterogeneity and endogenous fluctuations in a finance constrained economy

Summary.   This paper examines the local properties of perfect foresight equilibrium of a finance constrained economy featuring two classes of infinitely-lived agents with heterogeneous general preferences. It is primarily concerned with the conceivability of endogenous fluctuations for large plausible capital-labor elasticities of substitution. It is notably shown that heterogeneity in preferences allows Hopf cycles to be entirely consistent with a wide range of elasticities of substitution including the unitary one (Cobb-Douglas specifications). Received: April 23, 1999; revised version: January 24, 2000     

Testing for substitutability in the mackerel market: a new method using fractional cointegration

This article seeks to extend knowledge of the mackerel (Scomber scombrus) market in the Basque Country (a region in Spain) by analysing possible relationships between this and other species with similar characteristics such as the sardine (Sardina pilchardus), the horse mackerel (Trachurus trachurus) and the Atlantic chub mackerel (Scomber colias), all of them landed at the ports of the Basque Country. Specifically, the goal is to learn whether these other species can be considered as mackerel substitutes. To that end, a fractional cointegration analysis of different series of historical prices is performed using a novel method never before used in studies of this type. The results indicate that mackerel have no substitutes, and thus form a mono-species regional market. This implies, among other things, that their price is not influenced by the prices of other species, and this should be taken into account by managers when designing management measures and policies to improve the sustainability of the fishing of this species.     

“Green cannibalism” or an “organic inside job”? Empirical insights into the rivalry of ethical grocery types

Despite having favorable purchase intentions toward organic groceries, the respective purchase behavior falls often short. This so‐called intention–behavior gap is investigated by exploring the impact of competing ethical products fulfilling green consumption motives (“green fit”) as well or lacking credibility of organic groceries on organic purchase behavior. The first two studies (n ₁ = 225; n ₂ = 321) assessing actual and reported purchase behavior are testing the impact of perceived substitutability of local and fair trade alternatives compared with organic groceries. A third study ( n ₃ = 145) examines the impact of food miles and packaging on perceived product quality and credibility as possible reasons for a lacking “green fit” of organic groceries in terms of an experimental design. Local (fair trade) and organic groceries are perceived as substitute (complementary) alternatives. Additionally, local (organic) “green fit” impedes (enhances) the transformation from organic intentions into a respective purchase behavior. Wrapped organic produces with high food miles are linked to lower quality and credibility perceptions, reducing organic sales rates in favor of local groceries.