The Output Effect of a Transition to Price Stability When Velocity Is Time Varying

This paper explores the effect of time‐varying velocity on output responses to policies for reducing/stopping inflation. We study a dynamic general equilibrium model with sticky prices in which we introduce time‐varying velocity. Specifically, we endogenize time‐varying velocity into the model developed by Ireland (1997) for analyzing optimal disinflation. The nonlinear solution method reveals that, depending on velocity, the “disinflationary boom” found by Ball (1994) may disappear even under perfect credibility and that early output losses may be much larger than previously thought. Indeed, we find that a gradual disinflation from a low inflation may even be undesirable.     

THE CLOTHING ATTITUDES AND ACTIVITIES OF HOME ECONOMISTS EMPLOYED IN BUSINESS

The Sproles Consumer Interest and Priorities questionnaire was administered to 3,036 American home economists, who were pursuing careers in business, in order to develop a profile of the clothing attitudes and activities of that segment of the consumer market who (1) have been enrolled in home economics programmes at the college level, and (2) have been employed in businesses created for profit or associations supported by profit-making companies. Sixty-four per cent (1,950) of the survey forms were returned. A majority of the respondents evidenced a consciousness of clothing styles worn by others, an understanding of the importance of fashionability within social situations, an awareness of personal clothing expenditures and an appreciation for the economic value of home sewing. Application of these principles, however, was individualized, as evidenced by contrasting methods of clothing acquisition, varied willingness to purchase clothing at sales or used clothing establishments, and diverse tendencies toward buying clothing on impulse. Only 22% of the sample perceived themselves to be fashion leaders.     

Effect of Preparation Time on the Minimum-Cost Diet

The implications on a minimum-cost diet of introducing meal preparation time are explored using a multiple criteria framework. Using a bicriterion method, the tradeoff between the money cost of home-cooked meals and the meal preparation time is empirically estimated with a set of 895 recipes popular in Hawaii. There is a clear tradeoff between cost and time in preparing home-cooked meals, and it is found that the minimum-cost diet is very sensitive to the meal pre-parer's value of time.     

Misperceptions of Grocery Advertising

A survey of food shoppers showed that consumers underestimate the number of advertised grocery store items reduced in price and the average amount these products are marked down. Newspaper advertisements appear to be relied upon more by consumers who believe that advertised brands are of better quality than those not advertised.     

DAMS, DAM REMOVAL, AND RIVER RESTORATION: A HEDONIC PROPERTY VALUE ANALYSIS

This article presents the results of a hedonic property value analysis for multiple hydropower sites along the Kennebec River in Maine, including the former site of the Edwards Dam in Augusta, Maine. The effect of the removal of the Edwards Dam on the Kennebec River in Maine is examined through consumer's marginal willingness to pay to be close to or distant from the dam site. Data from both before and after the dam was removed are used to estimate changes in marginal prices. A similar data set is also used to look at the effects of the remaining upstream dams on property values. This article presents one of the first (to our knowledge) ex post analyses on the economic impact of dam removal on property values. As more privately owned dams in the United States come up for relicensing, evaluating the impacts with and without the dam will become increasingly important. This work can help inform those analyses. ( JEL Q25, Q51, Q58)