The Environmental Benefits of Organic Wine: Exploring Consumer Willingness-to-Pay Premiums?

Consumers and the producers have shown interest in organics, but there exist gaps in their common interest. Producers require premiums for their products based on the peculiarity of their production circumstances and the perceived benefits inherent in their products. Predicting consumer willingness to pay a premium for the environmental benefits of organics (WTPe) is a challenge and is of interest in this study. The contingent valuation method was used to gather information on WTPe from a sample that yielded 2,099 surveys. The econometric test ordered probit regression and other analyses were carried out. On average, respondents indicated WTP 23% premium. The proposed hypotheses were tested, and all were accepted except social demographic variables that presented a mixed outcome. The results have implications for consumer sensitization and enlightenment programs of the wine industry, wine market segmentation, and government’s climate change policy. This study is exploratory and has presented a snapshot scenario. Confirmatory and longitudinal studies are recommended to validate this study’s outcomes.     

So,you want to be an entrepreneur? Lessons from the Entrepreneurship Bootcamp for Veterans with Disabilities

Based on helping dozens of military veterans refine their ideas for starting a business, we identify and discuss a series of potential pitfalls that aspiring entrepreneurs—veterans and civilians alike—must avoid in order to be successful. Potential entrepreneurs must not confuse the pursuit of hobbies and self-employment with the act of creating a business. People who wish to build a business around public speaking or consulting need to firmly establish why customers should be willing to pay for their advice. Individuals that seek to develop a new non-profit organization must have a viable value proposition even though they are not pursing a profit motive. Overall, the entrepreneurial ventures that are most likely to succeed are those that (1) are based on a sustainable business model, (2) leverage the entrepreneur's unique experiences and attributes, and (3) are built around a process or system that enables the venture to prosper even if the entrepreneur leaves the venture.     

The value of information in a principal-agent model with moral hazard: The ex post contracting case

In a principal-agent model with moral hazard, a signal about the principal?s technology — the stochastic mapping from the agent?s action to the outcome — is observed before the contract is offered. The signal is either uninformative (null information), informative and observed only by the principal (private information), or also observed by the agent (public information). We show that, from an ex ante standpoint (before the signal is observed): (i) the agent prefers private to both null and public information; (ii) the principal sometimes prefers null to both private and public information; and (iii) when the principal prefers public to null information, she prefers public to private information, whereas the agent prefers private to public information. In this last situation, we also show that (iv) for any separating equilibrium with private information, there exists a contract with public information that both strictly prefer.     

Giving mergers a head start

Mergers with substantial business overlap face a barrier to speedy integration: Antitrust regulations limit the information companies can share before a deal closes. But as Dow Chemical and Union Carbide found, premerger planning by "clean teams" of former employees can help merging companies hit the ground running.     

An Analysis of the Out-of-Market Gap for DVDs in the U.S.

We examine the out-of-market gap – the time between the end of a film’s theatrical run and its release on DVD – for a sample of U.S. films during 1988-2005. The average gap declined from 58.14 days in 1998 to 27.93 days in 2005; by 2005, 39% of the films were released on DVD prior to leaving the theaters. Probit and hazard models are estimated to explore the factors that influence a distributor’s decision to release a film on DVD before it exits the theaters, and the timing of the release for films that appear on DVD after they leave the theaters.      

The Cost Efficiency of Real Estate Investment Trusts: An Analysis with a Bayesian Stochastic Frontier Model

Using a stochastic frontier methodology that incorporates Bayesian statistics, this paper analyzes the cost efficiency of real estate investment trusts (REITs) by observing the deviations of the measured costs of individual REITs from a defined efficient cost frontier. Using 1995–1997 data, we extend the previous research in this area and measure REIT efficiency more precisely by isolating random measurement error from the overall deviations from the efficient cost frontier. We calculate the magnitude of each REIT's managerial inefficiency, the industry inefficiency, and returns to scale. In addition, we assess specific characteristics of REITs for their contribution to inefficiency by calculating the odds ratio that a REIT with a specific characteristic is more efficient than a REIT with an alternative characteristic. The results show that, for the years studied, REITs are relatively cost efficient with most REITs facing increasing returns to scale. Additionally, the REIT's use of debt and the REIT's management style significantly affect the cost performance of REITs during the aforementioned time period. Finally, diversification across property types, as measured, does not seem to influence REIT cost efficiency.