The Elasticity of Marginal Utility of Consumption: Estimates for 20 OECD Countries*

In social project appraisal, the policy profile of both distributional welfare weights and the social discount rate has risen considerably in recent years. This fact has important implications for the allocation of funds to social projects and policies in countries, and in unions of countries such as the EU. A key component in the formulae for both welfare weights and the social discount rate is the elasticity of marginal utility of consumption, e. A critical review of existing evidence on e suggests that the UK Treasury's preferred value of unity is too low. New evidence presented in this paper, based on the structure of personal income tax rates, suggests that, on average, for developed countries e is close to 1.4. This particular approach to the estimation of e has previously been under‐utilised by researchers.     

Work Relationships in Telephone Call Centres: Understanding Emotional Exhaustion and Employee Withdrawal

This paper examines the nature of employment and the conditions of work in five telephone call centres in the telecommunications industry in Australia. Call centre work typically requires high levels of sustained interpersonal interaction with customers which can lead to burnout and employee withdrawal. Customer service staff can also become targets of customer hostility and abuse. In addition, this form of work tends to involve extensive employee monitoring and surveillance with little job discretion or variety of tasks. The paper draws upon survey data from 480 telephone service operators to identify the factors that are associated with emotional exhaustion and the frequency of absence amongst the employees. A modelling of the data using LISREL VIII revealed that a number of job and work-setting variables affected the level of emotional exhaustion of employees. These included interactions with the customer, a high workload and a lack of variety of work tasks. Moreover, higher rates of absence were associated with emotional exhaustion.     

Generalised estimates of diffusion rates for the oxygen blown steel process: An international comparison

The purpose of this study is to build on the results recently obtained by Poznanski (1990). First, the estimation technique is generalised by removing both the symmetric restrictions and the effects of autocorrelated errors that are present in simple logistic functions. Secondly, attention is drawn to the existence and consequences of multicollinearity when non linear techniques are applied to a general exponential. Thirdly, an attempt is made to quantify the importance of market structure and time lags in adoption as determinants of diffusion speed. Finally, a comparison between these generalised results and Poznanski's is made.The study concludes that, by generalising the estimation technique, some significant changes take place. Changes occur in the ordering and magnitude of diffusion speeds, especially amongst the developing and centrally planned economies. Changes also occur in the nature of the diffusion process, and in the importance attributed to market structure and diffusion lags in determining the rate of diffusion. It is also shown that, for some countries, multicollinearity imposes constraints on the type of generality that can be obtained.     

Transforming Local Government: Innovation and Modernization

This article is based on research investigating why local authorities innovate and what happens when they do. The authors show how local authorities have responded to the current normative climate for innovation, and explore the interaction between central policy and local action. The article demonstrates the importance of the policy climate set by central government in fostering—or constraining—innovation at a local level.     

Implementing reverse e-auctions: A learning process

Reverse e-auctions, which enable suppliers to compete on-line in real-time, are changing the way organizations select their suppliers. We explore how five large firms in different industries learned to use e-auctions, and how e-auctions were integrated into their purchasing processes. To successfully implement e-auctions, organizations should: (1) build e-auction competencies; (2) organize for knowledge management; (3) create a holistic sourcing process; (4) focus on the total cost of ownership; and (5) experiment with e-auction designs. Key observations are drawn from the case studies, and implications for supply managers are presented.     

Japanese/U.S. technological competitiveness and strategic alliances in the biotechnology industry

This paper analyzes the reasons for Japanese/U.S. collaborations in the biotechnology industry, and considers the question of whether such alliances pose a threat to the North American industry. Japan's technological competitiveness in biotechnology is examined in terms of its strengths and perceived weaknesses. Ways in which Japan is attempting to overcome these weaknesses are identified. As well, the strengths and weaknesses of the North American biotechnology industry are assessed. The paper concludes with recommendations for government and R&D managers on how to preserve U.S. competitiveness. R&D managers must keep abreast of their techno-global competitive environments. While organizations can enter into alliances to improve their competitiveness they must be aware of the dangers of collaboration, and to benefit from their alliances they must enhance their organizational learning. Organizations must be aware of the pitfalls of alliance formation, and any alliance must be viewed in its national context. Last, but not least, managers must be more effective in their management of the processes of technological innovation.     

Are hyperinflation paths learnable?

Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the high-inflation steady state. These paths are shown to be stable under least-squares learning if agents can utilize contemporaneous data. In an economy with a mixture of agents, some of whom only have access to lagged data, stable hyperinflationary paths emerge only if the proportion of agents with access to contemporaneous data is sufficiently high.     

The Economics and Bioeconomics of Folk and Scientific Classification

Synopsis This paper is the product of a collaboration between a biologist (Ghiselin 1997) who works on the philosophy of classification and an economist (Landa 1981, 1994) who works on the ‘Economics of Identity’: how and why people classify people based on identity in the context of a theory of ethnic trading networks. In developing the ‘bioeconomics’ (the synthesis of economics with biology) of classification, we crossed a number of disciplinary boundaries—anthropology, economics, sociology, biology, and cognitive psychology including evolutionary psychology’s ‘fast and frugal’ heuristics. Using a bioeconomics approach, we argue that folk classifications—the classifications used by ordinary persons—have much in common with scientific classifications: underlying both is the need for economy of information processing in the brain, for the efficient organization of knowledge, and for efficiency of information acquisition and transmission of information to others. Both evolve as a result of trial and error, but in science there is relatively more foresight, understanding, and planning.     

Using replication research for just-in-time purchasing construct development

Using replication research, the validity of the just-in-time purchasing (JITP) construct is established. Although empirical researchers have examined JITP over the last two decades, a consistent set of valid, reliable factors has not been used. The lack of valid construct is a barrier to hypotheses testing and meta-analyses on JITP. This study confirmed the validity of six JITP factors: top management commitment, employee relations, training, supplier quality management, transportation, and quantities delivered using two different data sets and testing the first- and second-order structure of the JITP construct. Content validity, reliability, unidimensionality, convergent validity, discriminant validity, criterion-related validity, and an invariant factorial structure of the JITP construct were empirically established.     

Incentive Regulation of Prices When Costs are Sunk

We present a model featuring irreversible investment, economies of scale, uncertain future demand and capital prices, and a regulator who sets the firm’s output price according to the cost structure of a hypothetical replacement firm. We show that a replacement firm has a fundamental cost advantage over the regulated firm: it can better exploit the economies of scale because it has not had to confront the historical uncertainties faced by the regulated firm. We show that setting prices so low that a replacement firm is just willing to participate is insufficient to allow the regulated firm to expect to break even whenever it has to invest. Thus, unless the regulator is willing to incur costly monitoring to ensure the firm invests, revenue must be allowed in excess of that required for a replacement firm to participate. This contrasts with much of the existing literature, which argues that the market value of a regulated firm should equal the cost of replacing its existing assets. We also obtain a closed-form solution for the regulated firm’s output price when this price is set at discrete intervals. In contrast to rate of return regulation, we find that resetting the regulated price more frequently can increase the risk faced by the firm’s owners, and that this is reflected in a higher output price and a higher weighted-average cost of capital.