Quasi‐rational and ex ante price expectations in commodity supply models: an empirical analysis of the US broiler market

A statistically optimal inference about agents' ex ante price expectations within the US broiler market is derived using futures prices of related commodities along with a quasi‐rational forecasting regression equation. The modelling approach, which builds on a Hamilton‐type framework, includes endogenous production and allows expected cash price to be decomposed into anticipated and unanticipated components. We therefore infer the relative importance of various informational sources in expectation formation. Results show that, in addition to the quasi‐rational forecast, the true supply shock, future prices, and ex post commodity price forecast errors have, at times, been influential in broiler producers' price expectations. Copyright © 2003 John Wiley & Sons, Ltd.     

Price rigidities and institutional variations in markets with posted prices

Summary Standard laboratory posted-offer markets respond slowly and incompletely to demand shocks. In these one-sided markets, where sellers control the setting of prices, very little information is transmitted via the process of exchange. For this reason, traders have trouble distinguishing randomness in their own experience from changes in market fundamentals. This paper reports the results of twelve laboratory markets conducted to assess whether some common variants to standard posted-offer rules can correct the adjustment deficiences. Although discounting, multiple postings and excess demand information all improve performance, we find that response remains poor, and efficiencies low.Support for this research was provided by the National Science Foundation (SBR 9319842 and SBR 9320044), and the University of Virginia Bankard Fund. Data are archived at FTP address: fido.econlab.arizona.edu. We wish to thank Charles Plott and Shyam Sunder for useful comments on an earlier draft of this paper. The usual disclaimer applies.     

Impacts of an EC carbon/energy tax and deregulating thermal power supply on CO2, SO2 and NOx emissions

Emission of CO₂, SO₂ and NO_x are all closely linked to the burning of fossil fuels. Here we report on simulations done by linking a Sectoral European Energy Model (SEEM), covering energy demand in nine Western European countries, with the emission-transport-deposition model RAINS developed by IIASA. The study analyses emissions of CO₂, SO₂ and NO_x, deposition of sulphur and nitrogen and the extent of areas where the critical load for sulphur is exceeded in year 2000 under four different energy scenarios. Two different sets of future behavioural patterns for the thermal electric power production sector are considered. In one regime, called the plan-efficient regime, the sector is assumed to follow official plans with regard to investment in new capacity. In the other regime, called the cost-efficient regime, the thermal power sector is assumed to behave in a cost minimizing manner. The effects of the proposed EC carbon/energy tax are studied under both regimes, giving rise to altogether four scenarios.In both regimes the effect of the EC tax is to reduce emissions by between 6 and 10 per cent in year 2000 relative to the scenarios without the tax. A change of regime, from the regulated, plan-efficient regime to the market-based, cost-efficient regime, will, by itself, reduce emissions of CO₂ and NO_x by approximately 3 per cent, while SO₂ emissions are reduced by 13 per cent. The EC tax will reduce sulphur deposition by more than 5 per cent in the nine model countries under the plan-efficient regime. A change of regime further reduces the total deposition by 9 per cent. The area where depositions exceed the critical load is reduced by approximately 6 per cent in year 2000 by the tax in both regimes. Changing from the plan-efficient to the cost-efficient regime has a similar impact.Although the emission reductions due to the EC tax may seem modest, they are shown to have a sizeable effect on the technological abatement costs of reaching targets like those prescribed in the Sofia protocol on the stabilisation of NO_x emissions, and the Helsinki protocol on SO₂ emission reductions. This is part of what can be considered to be secondary benefits of the EC carbon/energy tax.     

Sequencing and the Adding-up Property in Contingent Valuation of Endangered Species: Are Contingent Non-Use Values Economic Values?

This paper presents tests of the theoretical validity of the contingent valuation (CV) method. The validity of CV is especially a concern when involving environmental goods with a predominant non-use value. One test of theoretical validity is the adding-up property that implies that a specific good should be equally valued irrespectively of it is being valued directly or built-up sequentially. In this CV study four independent sub-samples stated willingness to pay for the same composite good, or package, using different sequences. One sub-sample valued the composite good directly, while two sub-samples faced built-up sequences valuing first subsets of this composite good. A fourth sub-sample valued the composite good from a dividing-out approach, facing first the valuation of a larger multi-package. Theoretically expected sequencing effects were observed; the subset goods obtained higher values earlier in a sequence, and the dividing-out approach decreased the stated value for the composite good. Most importantly, these CV data did pass the tests of the adding-up property.     

Environmental quality indicators: Background,principles and examples from Norway

The need for a simple and general overview of the development in the state of the environment has led to work on environmental indicators in several countries and international organizations. Except for the basic common requirement of providing an overview, the works vary a great deal with regard to final aim, target groups, classification and, hence, choice of indicators. This paper gives an overview of the work carried out in the Central Bureau of Statistics of Norway within this field, with emphasis on the basic principles behind the choice of indicators. A hierarchical system of indicator sets is proposed, and examples of indicators are presented. Also, a brief overview of work carried out elsewhere is included.     

The World Is Not Enough! Small Open Economies and Regional Dependence

In this paper, we explicitly introduce regional factors into a global dynamic factor model. We combine new open economy factor models (emphasizing global shocks) with the recent findings of regional importance in the business cycle synchronization literature. The analysis is applied to a large panel of domestic data for four small open economies. We find that global and regional shocks explain roughly 30 and 20 percent, respectively, of the business cycle variation in all countries. While global shocks have most impact on trade variables, regional shocks explain a relatively large share of the variation in cost variables.     

Book reviews

Abstract

This article examines the cultural field of fitness as a network of producers, consumers, products and practices that has developed around the care of the body through physical exercise. Drawing on a thematic text analysis of US exercise manuals, the paper focuses on how the commercial fitness field naturalizes associations between physical exercise and leisure, and between leisure and self‐work. In particular, the analysis examines three themes and their relevance to our broader understanding of leisure in contemporary consumer society: the management of leisure time; the use of leisure for self‐investment strategies; and the promotion of consumption as the framework for leisure and an accompanying notion of pleasure. The fitness field casts light on how leisure more generally is constructed as a sphere of obligations to make productive use of one’s time, to improve one’s body and self, and to do so through the wares of the consumer marketplace. The cultural imaginary of leisure as a time of freedom from work and responsibility is thus recast, in an age of individualization, as a time of freedom to accomplish the work of self‐production.     

Job Loss and Entrepreneurship

We examine the impact of job loss on entrepreneurship behaviour. Our identification strategy relies on the use of mass layoffs caused by bankruptcies as indicators of exogenous displacement. Building on Norwegian register data, we find that working in a company which is going to close down due to bankruptcy in the near future raises the subsequent entrepreneur propensity by 155% for men and 180% for women, compared to working in a stable firm. These estimates are much larger than previously reported in the literature. Taking into account that many workers lose their jobs in the comparison group of stable firms also, we suggest that the full effects of displacement are even larger.