On consumer choice patterns and the net impact of feature promotions

Even in the digital age, feature promotions continue to receive significant investments from CPG manufacturers and retailers. Whether this is money well spent depends on consumers' (heterogeneous) tendency to switch brands or stores in response to features. This study proposes a ‘Mixed-pattern Random-effects Nested Logit’ (MRNL) model to analyse the effect of feature promotions in a multi-retailer multi-brand setting. Across 16 different CPG categories, our results reveal that in all cases a mixture of choice patterns prevails: about half of households exhibit a brand focus (i.e. rather substitute between stores offering that brand), the remaining half show evidence of a store focus (i.e. rather substitute brand offers within a visited store). We find that the size of the promotion lift and its underlying sources differ substantially between patterns. Brand-focused consumers are generally more responsive to feature ads than store-focused consumers – especially in low-concentration categories; while they imply much stronger cannibalization for the manufacturer, and much weaker cannibalization for the retailer. It follows that retailers reap much higher benefits in the brand-focused segment, while manufacturers may not prefer that segment in terms of net gains and must be wary of subsidizing those consumers. We identify household and category characteristics that underlie the choice patterns and offer opportunities for targeting.     

The effects of scale in economic development: Tourism in Bali

Eric E. Rodenburg, The Effects of Scale in Economic Development: Tourism in Bali. Annals of Tourism Research 1980, VII(2):177–196. Planners promote tourism to meet the objectives of economic development. Different scales of enterprise, however, meet the objectives of planners in different ways. Data from Bali, Indonesia, illustrate the differential social and economic effects of three scales of tourism enterprise; large industrial, small industrial and craft tourism. A comparison of these segments of the continuum of tourism enterprises in Bali shows that the objectives of economic planners (increased earnings, foreign exchange, investment, job opportunities, production, entreprenuership, infrastructure, and the minimization of adverse social and cultural effects) are not best met through the promotion of large, industrially scaled enterprises.     

Agri‐environmental auctions for phosphorus load reduction: experiences from a Finnish pilot

We examine environmental auctions on working agricultural lands. We organized a discriminatory auction where farmers were asked to make bids on spreading gypsum on their fields to reduce phosphorus loads to surface waters. The parcel‐specific bids were ranked based on their load reduction–compensation ratios. To assess load reductions, we built an environmental benefit index (EBI) based on three factors: P‐status of the soil (phosphorus available for crops), field slope and location with respect to waterways. As the per tonne price of gypsum delivery from the factory was higher for small quantities, the auction format allowed bundling of field parcels to reduce transportation costs. We evaluate auction's ability to target the environmental (or abatement) measures to field parcels with the highest load reduction potential and analyse the economic efficiency of the auction by comparing the pilot auction with simulated bidding behaviour and with hypothetical flat rate payment schemes. The pilot auction targeted the environmental measures effectively. It was also more efficient than a flat rate payment, even when the flat rate scheme was combined with an EBI eligibility criterion.     

The remarkable transformation of the UV curve in economic theory

Abstract

The purpose of this paper is to provide an analysis of the impact the Unemployment–Vacancy (UV) curve (or Beveridge curve) had on economic theory and to provide an account of the subsequent radical changes in its place and role over the decades since its first appearance in 1958. The paper traces the historical development of the UV curve and argues that the role of the UV curve has changed from that of a measuring device, to a graphical representation of full employment, to an axiom necessary for matching models of unemployment to a diagnostic tool. This changing role is best understood in the light of the paradigmatic change from Keynesianism to neoclassical search theory.     

Inefficiency of manual weeding in rainfed rice systems affected by parasitic weeds

Manual weeding is the predominant weed control practice and the most labor‐consuming activity in smallholder, rainfed rice systems in sub‐Saharan Africa. This study investigates the technical inefficiency of weeding labor, other labor, and overall inputs, and identifies sources of technical inefficiency of weeding labor in the context of parasitic weed infestation. The analysis applies a two‐stage approach. First, a directional input distance function DEA approach was used to compute input‐specific technical inefficiencies. Second, sources of technical inefficiency of weeding labor were identified using a truncated bootstrap regression. Data from 406 randomly selected smallholder farmers from Benin (n = 215) and Côte d'Ivoire (n = 191) were used. The technical inefficiency of weeding labor was high in both countries (58% in Côte d'Ivoire and 69% in Benin). This implies that a substantial fraction of weeding labor could be saved without reducing rice productivity or increasing the use of other inputs. A decrease in the technical inefficiency of weeding labor with an increase in production scale was observed. In addition, weeding regime and education level were each associated to significant changes in the technical inefficiency of weeding labor.