sunk costs and the natural resource extraction sector analytical models and historical examples of hysteresis and strategic behavior in the americas sunk costs play a significant role in shaping industry conduct and development outcomes associated with the resource extraction sector their role is explored here by 1 developing analytical models that show specifically how sunk costs influence investment behavior and outcomes and 2 considering the historical experience during major epochs of two important extractive industries the models demonstrate how sunk costs in conjunction with uncertainty or strategic behavior can severely distort efficiency and equity outcomes the amazon rubber boom and bust and the pan american aluminum industry illustrate the significance of sunk costs in the extractive sector and beyond

effects of piracy on quality of information goods it is commonly believed that piracy of information goods leads to lower profits which translate to lower incentives to invest in innovation and eventually to lower quality products manufacturers policy makers and researchers all claim that inadequate piracy enforcement efforts translate to lower investments in product development however we find many practical examples that contradict this claim therefore to examine this claim more carefully we develop a rigorous economic model of the manufacturer s quality decision problem in the presence of piracy we consider a monopolist who does not have any marginal costs but has a product development cost quadratic in the quality level produced the monopolist faces a consumer market heterogeneous in its preference for quality and offers a quality level that maximizes its profit we also allow for the possibility that the manufacturer may use versioning to counter piracy we unexpectedly find that in certain situations lower piracy enforcement increases the monopolist s incentive to invest in quality we explain the reasons and welfare implications of our findings this paper was accepted by lorin hitt information systems

optimal timing of sequential distribution the impact of congestion externalities and day and date strategies the window between a film s theatrical and video releases has been steadily declining with some studios now testing day and date strategies i e when a film is released across multiple channels at once we present a model of consumer choice that examines trade offs between substitutable products theatrical and video forms the possibility of purchasing both alternatives a congestion externality affecting consumption at theaters with heterogeneous consumer groups and a decay in the quality of the content over time our model permits a normative study of the impact of shorter release windows zero three months for which there is a scarcity of relevant data we characterize the market conditions under which a studio makes video release time and price selections indicative of direct to video day and date and delayed video release tactics during seasons of peak congestion we establish that day and date strategies are optimal for high quality films with high content durability i e films whose content tends to lead consumers to purchase both alternatives whereas prices are set to perfectly segment the consumer market for films with low content durability we find that lower congestion effects provide studios with incentives to delay release and price the video to induce multiple purchasing behavior for films with higher content durability however an increase in congestion effects can in certain cases actually lead to higher studio profitability we also show that at the lower range of quality an increase in movie quality should often be accompanied by a later video release time surprisingly however we observe the opposite result at the upper range of movie quality an increase in quality can justify an earlier release of the video

factors that influence carbon emissions due to energy consumption based on different stages and sectors in china abstract this study analyzes carbon emissions due to energy consumption based on different stages and sectors in china and by applying the logarithmic mean divisia index decomposition method carbon emissions were decomposed into energy structure energy intensity economic structure and economic output effects the study period was divided into high efficiency and high output low efficiency and low output high efficiency and low output and low efficiency and high output considering different carbon emission characteristics and economic development carbon emissions exhibit different characteristics at different stages the degree of increase in carbon emissions at these stages depends on the combined effect of the energy efficiency and the economic output the main factor driving carbon emissions was the economic output effect in each stage and the main factor inhibiting carbon emissions was the energy intensity effect the economic and energy structures had only a modest effect on carbon emissions at each stage the industry sector was the top contributor to carbon emissions followed by the transport sector the policy implications in terms of economic growth the economic structure and energy consumption are discussed in relation to the different stages

co2 emissions embodied in china s exports from 2002 to 2008 a structural decomposition analysis abstract this study examines the annual co2 emissions embodied in china s exports from 2002 to 2008 using environmental input output analysis four driving forces including emission intensity economic production structure export composition and total export volume are compared for their contributions to the increase of embodied co2 emissions using a structural decomposition analysis sda technique although offset by the decrease in emission intensity the increase of embodied co2 emissions was driven by changes of the other three factors in particular the change of the export composition was the largest driver primarily due to the increasing fraction of metal products in china s total export relevant policy implications and future research directions are discussed at the end of the paper

farm growth and survival econometric evidence for individual farms in upper austria this article investigates survival and growth of more than 50 000 upper austrian farm households within a maximum likelihood sample selection framework the results suggest that age schooling and sex of the farm operator size of the farm family and off farm employment status as well as initial farm size significantly influence farm growth and survival the present study provides support for the notion of a disappearing middle in the size distribution the process of polarization is closely related to the off farm employment status of farms correcting for sample attrition bias is important when analyzing the performance of part time farms

the impact of price floors on farmland investments a real options based experimental analysis price floors are a common instrument for market intervention to stimulate investments in some cases it can be observed that a price floor does not have the stimulating effect we experimentally analyse the investment behaviour of students who take the role of farmers the experiment considers an investment problem under uncertainty in a with price floor and a no price floor treatment stylizing a decision to take an ongoing farmland investment option we compare the actual investment behaviour with normative benchmarks of the net present value and the real options approach furthermore we look at order and learning effects the results show that the price floor has no significant impact on the willingness to invest whereas the effects of order were statistically significant the investment reluctance arising from an abolishment is stronger than the investment stimulation arising from the introduction of a price floor furthermore neither the net present value nor the real options approach is appr

why farmers quit a county level analysis we identify the effects of alternative explanatory variables on the propensity of u s farmers to cease farming with a particular emphasis on understanding the roles of off farm employment and federal farm program payments conventional ordinary least squares analysis using all counties suggests that off farm employment has no statistical effect on the net number of farmers quitting between 1987 and 1997 ceteris paribus a more refined analysis which separates counties losing farmers from those that gained farmers reveals subtle and less clear cut effects of off farm employment and federal program payments on farm exits copyright 2001 oxford university press

off farm work decisions of husbands and wives joint decision making theoretical and econometric models are developed to examine joint wage labor participation and hours decisions of a husband and wife in farm households the econometric model is multiple equation and recursive the specification of the off farm labor supply equation of the husband wife depends on whether his her wife husband does or does not work off the farm and this structure is endogenous the model is fitted to data for iowa farm households the main conclusion is that the off farm labor supply equation of a married individual differs significantly depending on whether his or her spouse also works for a wage copyright 1989 by mit press

economic and policy implications of restricted patch distribution in this paper we study how restricting the availability of patches to legal users impacts the vendor s profits market share software maintenance decisions and welfare outcomes prior work on this topic assumes that the hacker s effort is independent of the vendor s decision to release the patch freely or not clearly if the patch is not available to everyone the hacker finds it easier to exploit the vulnerability in the product and as a result is likely to alter his effort to understand the role of a strategic hacker we build a game theoretic model where the hacker s decision is endogenous with this model we find that the hacker s effort may on the one hand decrease the utility that the vendor can extract from the consumers but on the other hand may help differentiate the legal version of the product from the pirated version a vendor can strategically exploit the hacker s behavior in its pricing and software maintenance decisions the endogeneity of the hacker s actions drives several of

sunk costs and strategic commitment a proposed three stage equilibrium dixit s i980 paper in this journal the role of investment in entry deterrence has attracted considerable interest from economists concerned with constructing a modern theory of strategic behaviour towards entry in fact the paper has spawned quite an industry of commitment models in which the equilibrium payoffs in some final period game can be influenced by strategic commitments made by the players in an earlier period for similar models with important insights into strategic entry deterrence see eaton and lipsey i980 i98i schmalensee i98i the purpose of this note is to argue that when the instrument of stragetic commitment takes the form of sunk costs which both entrant and incumbent have to bear as it does in dixit s paper and in many other examples a three stage model rather than the two stage model presented by dixit is required although the proposed equilibrium differs from dixit s its qualitative features are the same it may or may not be profitable to deter entry and if it is the first mover may still prefer to play an accommodation strategy and allow entry to take place following dixit we restrict our attention to the asymmetric case in which one firm the incumbent makes the first move the two stage game involves the first mover sinking part of its costs in advance so that in the second stage equilibrium it will have a current cost advantage over the entrant which must incur the full cost of producing any desired output level the second period cost asymmetry ensures the incumbent a lar ger share of the post entry market which may be sufficient to deter entry altogether the problem with the two stage game lies in the nature of sunk costs sunk costs by definition are committed before the production period takes place if they were expended as a flow simultaneously with production they would not be sunk the installation of capacity is the natural example employed by dixit and well illustrates the point if installed capacity is a sunk cost which it must be for the incumbent to acquire any strategic advantage at all then the entrant s installed capacity is equally sunk and must also be committed before the production period takes place given this observation the post entry final period equilibrium should not be modelled as if the entrant were simultaneously incurring both variable and sunk costs but the incumbent only incurs variable costs this implies too great an asymmetry in favour of the incumbent the final period equilibrium should involve both firms incurring only variable

production and investment decisions under sunk cost and temporal uncertainty building on glenn johnson s asset fixity theory this article introduces sunk cost and temporal uncertainty in jorgenson s neoclassical theory of investment under the assumption of risk neutrality we show sunk cost and temporal risk affect the implicit rental value of capital and investment and entry exit decisions results suggest there are important interactions between sunk cost and the effects of temporal uncertainty on production behavior

is part time farming really a step in the way out of agricultural one of the most important questions regarding the phenomenon of part time farming is whether it is a stable situation or just a step in the way out of agriculture this article provides support for the first possibility in the context of israeli family farms in the 1970s a multinomial logit model of work choices is estimated including estimated transition probabilities among the explanatory variables the results indicate that a high objective probability of exit from farming within the next decade decreased the tendency to engage in off farm work especially in a full time job in 1971

integrating behavioral choice into epidemiological models of aids increased hiv risk creates incentives for people with low sexual activity to reduce their activity but may make high activity people fatalistic leading them to reduce their activity only slightly or actually increase it if high activity people reduce their activity by a smaller proportion than low activity people the composition of the pool of available partners will worsen creating positive feedbacks and possibly multiple steady states early public health efforts may allow societies to reach more favorable steady states excerpt

asymmetry and nonstationarity in the farm size distribution of wisconsin milk producers an aggregate analysis a markov model is developed to test the nonstationarity and asymmetry of factors affecting the evolution of wisconsin dairy farms using aggregate data the model is used to examine how prices interest rates debt drought and the dairy termination program affected farm growth and the entry and exit of wisconsin dairy farms by size categories during 1972 92

the approach to realizing the potential of emissions reduction in china an implication from data envelopment analysis abstract by proposing a three hierarchy meta frontier data envelopment analysis dea this paper first decomposes co 2 emissions efficiency and the potential for emissions reduction into the following three components structural technical and management based on these components we then conduct an empirical analysis of china s total factor co 2 emissions efficiency its potential for co 2 emissions reduction and its corresponding implementation path the results show that co 2 emissions efficiency in mainland china is relatively low because of structural inefficiency technical inefficiency and management inefficiency the chinese government is expected to realize a large quantity of co 2 emissions reduction potential nearly 40 of the current total co 2 emissions through adjusting the industrial structure narrowing the technology gap among regions promoting the reform of marketization and strengthening environmental regulation the causes of co 2 emissions inefficiency and the distribution of potential reductions in emissions show a distinct spatial difference characteristic therefore this paper also formulates emissions reduction strategies for china s 30 provinces according to their specific situations noting the direction of the industrial structure adjustment and the path to improving co 2 emissions efficiency

contract and exit decisions in finisher hog production finisher hog production in north america has shifted toward larger units and contract format since 1990 exit among independent growers has been high we develop a model showing that growers with any of three efficiency attributes lower innate hazard of exit variable costs or contract adoption costs are more likely to contract produce more and expend more on business protection using 2004 agricultural resource management survey data a recursive bivariate probit model confirms that contracting producers are less likely to exit specialization increases the probability of contracting education nonfarm income and older production facilities are significant in increasing expected exit

the technology gap and efficiency measure in wec countries application of the hybrid meta frontier model this study develops the hybrid meta frontier dea model for which inputs are distinguished into radial inputs that change proportionally and non radial inputs that change non proportionally in order to measure the technical efficiency and technology gap ratios tgr of four different regions asia africa america and europe this paper selects 87 countries that are members of the world energy council from 2005 to 2007 the input variables are industry and population while the output variances are gross domestic product gdp and the amount of fossil fuel co2 emissions the result shows that countries efficiency ranking among their own region presents more implied volatility in view of the technology gap ratio europe is the most efficient of any region but during the same period asia has a lower efficiency than other regions finally regions with higher industry or gdp might not have higher efficiency from 2005 to 2007 and higher co2 emissions or population also might not mean lower efficiency for other regions in addition brazil is not oecd member but it is higher efficiency than other oecd members in emerging countries case oecd countries are better efficiency than non oecd countries and europe is higher than asia to control co2 emissions if non oecd countries or asia countries could reach the best efficiency score they should try to control co2 emissions

a structural decomposition analysis of the emissions embodied in trade abstract the aim of this study is to quantify the driving forces behind the growth of carbon dioxide emissions embodied in trade eet the world input output database is used to estimate eet in 40 countries during 1995 2007 after which a structural decomposition analysis is applied to avoid biases in the results we have used the input output tables in previous year s prices and chained the outcomes in many developed countries the growth of emissions embodied in imports is much higher than the growth of emissions embodied in exports a key reason for this finding is the change in the structure of trade both in intermediate and in final products emerging economies like the bric countries have increased their share in production and trade at the expense of developed countries producers and consumers in developed countries have shifted towards importing a larger share of products from emerging countries this is the distinguishing feature that led to an increase of emissions embodied in imports for developed countries and an increase of emissions embodied in exports for emerging countries these results suggest policy makers to monitor eet more carefully and take the effects of trade on emissions into consideration

entry exit and farm size assessing an experiment in dairy price policy this article models and estimates the forces behind farm exits and changes in herd size among connecticut dairy farms under the new england dairy compact a model of sunk costs and farm capital investment is used to specify two econometric estimations a random effects probit model of farm entry and exit and an autocorrelated generalized least squares panel data model of farm size the dairy compact s price strategy reduced farm exits and moderately increased cow numbers in contrast development pressures and historically low unemployment rates increased farm exits

application of the structural decomposition analysis to assess the indirect energy consumption and air emission changes related to italian households consumption abstract the design of sustainable production and consumption strategies and the assessment of implemented actions require to identify the driving forces that influence the trend of energy consumption and environmental impacts for this purpose the structural decomposition analysis sda was developed as a suitable methodology to analyse the driving forces of the changes in economic energy and environmental indicators the paper presents one of the first italian studies that apply an energy and environmental extended input output model opportunely shaped to the examined context combined with sda in detail it aims at 1 investigating the energy use and the air emissions arisen from the productive sectors to meet the household final demand in the period 1999 2006 2 identifying the sources of variations in energy and environmental indicators and 3 identifying which economic sectors are the most relevant sources of variation and must to be taken into account in the definition of sustainable production and consumption strategies as sources of changes the authors investigate energy and emission intensity effects leontief effect and final demand effect outcomes point out that the increase of the final consumptions often nullifies the energy and environmental benefits due to the improvement of the eco efficiency and to the introduction of innovative technologies of production the sector level analysis shows that tertiary and electricity gas and vapour result the highest italian consuming sectors of energy thus they should be focused for energy saving strategies agriculture hunting and sylviculture and road transports that are primarily sectors affecting air emissions should be taken into account for the reduction of environmental impacts results highlight that the current dichotomy of final demand growth and improvement of eco efficiency represents a key problem that needs to be addressed therefore the presented study can aid to define suitable oriented strategies for the energy and environmental impact reduction

china s changing energy intensity trend a decomposition analysis china experienced a dramatic decline in energy intensity from the onset of economic reform in the late 1970s until 2000 but since then the rate of decline slowed and energy intensity actually increased in 2003 most previous studies found that most of the decline was due to technological change but disagreed on the role of structural change to the best of our knowledge no decomposition study has investigated the role of inter fuel substitution in the decline in energy intensity or the causes of the rise in energy intensity since 2000 in this paper we use logarithmic mean divisia index lmdi techniques to decompose changes in energy intensity in the period 1980 2003 we find that 1 technological change is confirmed as the dominant contributor to the decline in energy intensity 2 structural change at the industry and sector sub industry level actually increased energy intensity over the period of 1980 2003 although the structural change at the industry level was very different in the 1980s and in the post 1990 period 3 structural change involving shifts of production between sub sectors however decreased overall energy intensity 4 the increase in energy intensity since 2000 is explained by negative technological progress 5 inter fuel substitution is found to contribute little to the changes in energy intensity

comparing structural decomposition analysis and index to analyze and understand historical changes in economic environmental employment or other socio economic indicators it is useful to assess the driving forces or determinants that underlie these changes two techniques for decomposing indicator changes at the sector level are structural decomposition analysis sda and index decomposition analysis ida for example sda and ida have been used to analyze changes in indicators such as energy use co2 emissions labor demand and value added the changes in these variables are decomposed into determinants such as technological demand and structural effects sda uses information from input output tables while ida uses aggregate data at the sector level the two methods have developed quite independently which has resulted in each method being characterized by specific unique techniques and approaches this paper has three aims first the similarities and differences between the two approaches are summarized second the possibility of transferring specific techniques and indices is explored finally a numerical example is used to illustrate differences between the two approaches

comparison of energy intensities in european union countries results of a structural decomposition analysis abstract this work proposes an input output structural decomposition analysis model to identify the sources of the differences in the energetic intensities of the european union countries given an economic structure a determined composition of the final demand and determined direct energy intensities by countries the work studies to what extent these factors explain the difference in aggregate energy intensities that are observed for different european union countries on the basis of this information indicators are constructed by sectors and countries that allow us to identify the role that each sector or country plays as an energy consumer the results show that the aggregate total energy differences in europe are strongly influenced by the direct energy intensity effect and by the demand effect without the different economic structures of the countries being an important factor in the explanation of these differences the metallurgical and manufacturing products sectors are identified as the most intensive in the aggregate energy intensity

technological gap scale economy and china s industrial energy demand abstract the industrial sector in china is energy intensive and accounts for more than 60 of the nation s total energy consumption demand narrating the story behind the growth of china s industrial energy consumption could help us understand the past and prepare for the future this paper aims to investigate the factors affecting china s industrial energy consumption in the 21st century by using an extended production theoretical decomposition approach pda with considering the technological gap and scale of the economy effects the new proposed decomposition framework includes four new factors namely the energy technological gap the output technological gap energy scale efficiency and output scale efficiency the results show that in the 21st century the energy consumption of china s industry increased by more than one billion tons of standard coal the expansion of the industrial economy is a dominant driver of china s industrial energy consumption while potential energy intensity energy technology and output technology are the three largest energy saving factors in addition to the conventional factors the newly proposed factors also have important effects on china s industrial energy consumption specifically output scale efficiency is an energy saving factor while the energy technological gap output technological gap and energy scale efficiency are drivers of energy consumption this suggests that china s industry is at the stage of returns to scale that is beneficial to output performance but harmful to energy performance meanwhile the widening of the industrial technological gaps has negative impacts on china s industrial energy conservation the proposed decomposition approach can provide information that cannot be obtained from traditional approaches and it can also be applied to many other cases for investigating feasible paths of energy saving and emissions reduction

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

do international commodity prices drive natural resource booms an empirical analysis of small scale gold mining in suriname abstract natural resource booms have been central to conservation and development in resource rich latin american countries yet the origin of these events remains poorly understood understanding the socioeconomic drivers of resource booms is important because such sudden increases in natural resources extraction are usually ecologically and economically unsustainable this paper analyzes the socioeconomic drivers of small scale gold mining which is degrading ecological resources and the health of people in the amazon region two conventional hypotheses are tested 1 international prices of gold drive the amazon gold rush and 2 national economic recession encourages small scale gold mining a simple empirical model is presented to link the gold mining histories of local miners to international and national trends the analysis indicates that theories that explain corporately driven resource extraction may not apply to the behavior of small scale producers it appears that extractive booms that are driven by local resource users can occur independently of global price markets the suriname case further suggests that inhibited national economic development can be the cause of a natural resource boom and not only a consequence as some researchers propose the author concludes that conservation policies for suriname should act to stabilize the national economy and to promote more sustainable mining methods

how to boost energy productivity in china s industrial sector an integrated decomposition framework based on multi dimensional factors abstract the industrial sector is a pillar for china s economy improving the energy productivity is of great significance to mitigate the discrepancy between energy use and energy supply as well as the economic development and environmental friendliness this paper extended the previous decomposition method by introducing six new components energy output oriented regional efficiency energy output oriented scale economy energy output oriented pure technical efficiency these new factors can uncover the impacts of regional balance development scale economy optimization and resource allocation efficiency change on energy productivity the main research results indicate that during the 2000 2016 period 1 industrial energy productivity yield progressively increased and the discrepancies of energy productivity in different regions were obvious eastern region represented the best energy productivity performance followed by the central and western regions 2 technological progress in both energy saving and production were two principal contributors to energy productivity growth overall the pure technical efficiency also promoted energy productivity suggesting that resource allocation efficiencies were performed well in both the energy market and the output market 3 by contrast both the energy and output oriented scale economy effect failed to promote energy productivity growth besides the energy oriented and output oriented regional efficiency had opposite impacts on energy productivity the former one had the inhibiting effects while the last one had the promoting effects finally several relevant suggestions for policymakers were provided

co2 emissions from electricity generation in seven asia pacific and north american countries a decomposition analysis abstract the logarithmic mean divisia index lmdi method of complete decomposition is used to examine the role of three factors electricity production electricity generation structure and energy intensity of electricity generation affecting the evolution of co2 emissions from electricity generation in seven countries these seven countries together generated 58 of global electricity and they are responsible for more than two thirds of global co2 emissions from electricity generation in 2005 the analysis shows production effect as the major factor responsible for rise in co2 emissions during the period 1990 2005 the generation structure effect also contributed in co2 emissions increase although at a slower rate in contrary the energy intensity effect is responsible for modest reduction in co2 emissions during this period over the 2005 2030 period production effect remains the key factor responsible for increase in emissions and energy intensity effect is responsible for decrease in emissions unlike in the past generation structure effect contributes significant decrease in emissions however the degree of influence of these factors affecting changes in co2 emissions vary from country to country the analysis also shows that there is a potential of efficiency improvement of fossil fuel fired power plants and its associated co benefits among these countries

total factor energy efficiency of regions in china abstract this paper analyzes energy efficiencies of 29 administrative regions in china for the period 1995 2002 with a newly introduced index most existing studies of regional productivity and efficiency neglect energy inputs we use the data envelopment analysis dea to find the target energy input of each region in china at each particular year the index of total factor energy efficiency tfee then divides the target energy input by the actual energy input in our dea model labor capital stock energy consumption and total sown area of farm crops used as a proxy of biomass energy are the four inputs and real gdp is the single output the conventional energy productivity ratio regarded as a partial factor energy efficiency index is computed for comparison in contrast to tfee our index is found fitting better to the real case according to the tfee index rankings the central area of china has the worst energy efficiency and its total adjustmentof energy consumption amount is over half of china s total regional tfee in china generally improved during the research period except for the western area a u shape relation between the area s tfee and per capita income in the areas of china is found confirming the scenario that energy efficiency eventually improves with economic growth

determinants differentiation and development of short term marginal costs in dairy production an empirical analysis for selected regions of the eu this work provides evidence on the determinants cost differentiation and development of short term marginal costs of dairy farms in important production regions of the european union the empirical study is based on the estimation of multi input multi output symmetric generalized mcfadden cost functions using an unbalanced panel data set of the european farm accountancy data network the results show considerable regional differences in the impact of the outputs input prices and fixed factors on marginal costs strong evidence can be found that marginal costs decrease over time and is further underlined by the development of derived regional aggregated short term supply curves marginal cost elasticities and correlation coefficients validate the hypotheses that a high degree of farm specialization large milk output and low milk prices are associated with lower marginal costs furthermore the marginal cost spread in the data sample is analyzed we show that milk output milk yield herd size labor input and fodder production can be attributed to significant marginal cost differentiation of farms whereas for crop and animal output grassland stock of other animals and depreciation only minor differentiation can be found

tax subsidy policies toward vector borne infectious diseases abstract vector borne diseases especially rife in poor countries pose sectoral tax subsidy issues preventions and therapies mitigate these diseases in a numerical optimization model combining dynamic epidemiology and economics the medical distinction between prevention and therapy does not distinguish economic properties of preventions and therapies some interventions increase and others decrease moving to the steady state depending on the utility function the targeting of interventions and the disease process interventions display negative own price but indeterminate cross price effects juxtaposing the social planner s with decentralized choices quantifies externalities and shows how subsidies implement the first best one prevention and the therapy are equally subsidized

the impact of wage differentials on choosing to work in agriculture based on a model of industry choice and wage determination a 1 increase in the relative wage in agriculture increases the probability that a nonurban male with no more than a ninth grade education works in agriculture by 3 37 at the sample mean and by 1 3 when averaged over the entire sample a 10 increase in wages may increase the proportion of those males who choose to work in agriculture by nearly a quarter

structural path and decomposition analysis of aggregate embodied energy intensities in china 2012 2017 abstract the dependence of the economic development of a region on its energy consumption is a major challenge for developing countries the aggregate embodied energy intensity aei based on an input output framework reflects the interaction between regional economy and energy consumption driven by final demand studying the change in aei from the perspective of sector production and final demand can effectively control the source and trend of energy intensity change in order to control the growth of energy intensity however there is a relative lack of studies determining the causes of aei changes from the perspective of sectors and final demands this study attempted to identify the influencing factors of aei changes and establish an aei based environmental policy in china a multiplicative structural decomposition analysis and a structural path analysis were used to study the aei under conditions of different final demands sectors and transmission layers along with the factors influencing aei changes in china from 2012 to 2017 our results indicate that the final demand category of gross fixed capital formation made the largest contribution to aei changes in 2012 and 2017 and the multiplicative intensity factor significantly inhibited the decrease in aei among the sectors studied only a few were found to significantly affect the change in aei with s11 processing of petroleum coking and nuclear fuel s12 chemical industry and s14 smelting and rolling of metals being the key sectors that input high energy consumption products to other sectors

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

family farm dynamics in canada and israel the case of farm exits abstract canada is one of the few countries for which data exist on individual family farms over time using these data researchers have been able to show that much of the microdynamics of family farms in canada e g changes in size distribution can be attributed to farmer entry and exit however the behavioral aspects of the exit decision received little attention in the literature a comparison of canadian and israeli data could help us understand these behavioral aspects because of the vast institutional differences between the farm sectors in the two countries and the possible effect of the institutional setup on exit decisions comparison of exit patterns may enable us to identify the dependence of farmers mobility on the institutional setup this may also have policy relevance in both canada and israel exit probability decreases with the extent of off farm work we conclude that off farm work is complementary rather than a substitute for farm work perhaps due to its less volatile nature both canadian and israeli farmers over a certain age are more likely to exit as they become older which is a natural result but exit probability in canada rises much faster with age than in israel the major difference between canadian and israeli farm exit patterns lies in the farm size farm size decreases exit probability in canada but increases it in israel perhaps this is because israeli farm exits are less planned in advance than canadian exits institutional constraints on land transactions in israel may also play a role

rural population decline in the 1980s impacts of farm structure and federal farm programs federal farm program benefits accrue disproportionately to large scale farm operators and continue largely because of the political influence of their beneficiaries some writers argue that these payments stem the movement of labor out of agriculture ultimately reducing the pace of rural depopulation here a theoretical model linking farm program payments to population loss is presented and empirically estimated for the years 1980 90 larger farm program payments as a share of total cash marketing receipts were associated with greater population losses from rural counties this result holds after controlling for other economic variables affecting population migration from rural areas

who should be responsible for software security a comparative analysis of liability policies in network environments in recent years vendor liability for software security vulnerabilities has been the center of an important debate in the software community and a topic gaining government attention in legislative committees and hearings the importance of this question surrounding vendor security liability is amplified when one considers the increasing emergence of zero day attacks where hackers take advantage of vulnerabilities before the software vendor has a chance to release protective patches in this paper we compare the effectiveness of three software liability policies vendor liability for damages vendor liability for patching costs and government imposed security standards we find that vendor liability for losses is not effective in improving social welfare in the short run while liability for patching costs can be effective if either patching costs are large and the likelihood of a zero day attack is low or patching costs are small and zero day likelihood is high in the long run when the vendor can invest in reducing the likelihood of security vulnerabilities loss liability is still ineffective when the zero day attack probability is high but can increase both vendor investment in security and social welfare when zero day attack likelihood is sufficiently low when the zero day attack probability is high patch liability is ineffective if user patching costs are large but partial patch liability can boost vendor investment and improve welfare when patching costs are small in contrast in an environment with low zero day attack probability full vendor patch liability can be optimal finally comparing the effectiveness of the three liability policies under study we find that government imposed standards on software security investment can be preferable to both patching and loss liability on the vendor if zero day attack likelihood is sufficiently low however if zero day attacks are a common occurrence and patching costs are not too high partial patch liability is the most effective policy this paper was accepted by sandra slaughter information systems

local economic conditions and wage labor decisions of farm and rural nonfarm couples effects of geographical differences in local economic conditions on wage labor demand and wage labor participation decisions of rural couples are examined for current population survey households 1978 82 wage premiums are shown to exist for localities anticipating labor demand growth higher unemployment rates larger share of employment in services and higher costs of living these effects are stronger for males than females effects of local economic conditions on the probability of wage work are consistent with expected market wage and reservation wage effects and for farm households the probability of wage work increases when expected farm output prices decline or the wage increases

network software security and user incentives we study the effect of user incentives on software security in a network of individual users under costly patching and negative network security externalities for proprietary software or freeware we compare four alternative policies to manage network security i consumer self patching where no external incentives are provided for patching or purchasing ii mandatory patching iii patching rebate and iv usage tax we show that for proprietary software when the software security risk and the patching costs are high for both a welfare maximizing social planner and a profit maximizing vendor a patching rebate dominates the other policies however when the patching cost or the security risk is low self patching is best we also show that when a rebate is effective the profit maximizing rebate is decreasing in the security risk and increasing in patching costs the welfare maximizing rebates are also increasing in patching costs but can be increasing in the effective security risk when patching costs are high for freeware a usage tax is the most effective policy except when both patching costs and security risk are low in which case a patching rebate prevails optimal patching rebates and taxes tend to increase with increased security risk and patching costs but can decrease in the security risk for high risk levels our results suggest that both the value generated from software and vendor profits can be significantly improved by mechanisms that target user incentives to maintain software security

externalities and compulsary vaccinations abstract this paper challenges the conventional wisdom that because of the free rider problem a case can be made for compulsary vaccination against infectious disease for a very general class of models requiring that all individuals be vaccinated is strictly dominated by free choice the market allocation is not optimum and in the full information optimum some individuals would be compelled to be vaccinated this allocation can be achieved by taxes and subsidies however the government can exploit the revelation properties of vaccination and achieve an even better allocation than the full information optimum

growth of milk production in german dairy farms an empirical study based on event history analysis this article investigates determinants of growth of milk production in german dairy farms with the use of event history analysis this methodology enables the analysts to consider time as a proxy for not measurable effects on growth the likelihood of a farm s moving from a nongrowth episode into a growth episode is estimated and the impact of various covariates on that likelihood is assessed the analysis is based upon a balanced panel of annual farm accounts from 616 specialized dairy farms in germany covering the financial years 1995 1996 2008 2009 the results from event history analyses are presented for low and high growth rates for both groups it was found that the probability of entering a growth episode defined as the event to be analyzed increases over time e g as a consequence of an increasing need to improve competitiveness moreover several covariates such as the share of subsidies in returns farmer s age and milk price had a significant impact on growth in a farm s milk production the analysis revealed however that the effect direction of some explanatory variables differed between the two groups

structural change in the west german agricultural sector this article explains regionally differentiated patterns of structural change based on a theoretical framework dealing with strategic interaction of farms on the land market the main research question focuses on the causes of regionally persistent structures an empirical markov chain model is defined for the west german agricultural sector the model is used to explain the probabilities of farm growth decline or exit in terms of the current and former regional farm size structure further the impact of variables describing the regional farm structure thereby indicating market power of the large the potential of high competition for land within a region and possibly high rents of the status quo in combination with sunk costs is quantified the results confirm the relevance of strategic interaction as a crucial determinant of persistent regional differences in the farm size structure over time

dynamic epidemiology and the market for vaccinations abstract the intent of this paper is to raise the question of how and when externalities can arise in the market for vaccinations static and dynamic models of such markets are developed and compared a special case in a continuous time dynamic framework is examined and is found to be efficient i e there is no externality this is in contrast to the results from the static formulation raising doubts about the suitability of a static approach these results indicate that the question of whether there are externalities in individual immunization decisions is more involved than is generally supposed

geology or economics testing models of irreversible investment using north sea oil data this paper tests the main implications of models of irreversible investment using data from operations in the oil fields in the north sea discrete time hazard regression models are used to ascertain the influence of economic variables the expected price of oil the variance of the price of oil and the level of reserves on the lag between the discovery of a field and the decision to develop the field we are able to control for heterogeneity in the data by incorporating variables which account for both the geological features of each field and individual operator characteristics the results indicate that the expected price of oil and the level of reserves are important in influencing the appraisal duration but that the variance of the oil price is not variables capturing the non economic features of the individual fields are also found to be significant factors affecting the appraisal lag copyright 1994 by royal economic society

estimating monopoly behavior with competitive recycling an application to alcoa this article develops a structural model of the aluminum industry during the period between world war i and world war ii it takes into account both the intertemporal nature of alcoa s cost minimization problem and the competitive recycling sector the model enables estimation of alcoa s degree of market power while allowing for the effect of competition from recycled aluminum previous work has emphasized alcoa s control over the size of the secondary sector in the long run as a source of market power for alcoa the results here indicate that alcoa could exert little influence in this regard but nonetheless had substantial market power

carbon dioxide emissions in the u s economy a structural decomposition analysis this paper provides an empirical analysis of the impact of various influences on carbon dioxide emissions it incorporates methodological refinements of input output structural decomposition analysis which is the examination of economic change by means of a set of comparative static variations in key parameters of i o tables the analysis is performed using a two tiered klem model which allows for estimation of substitution and technological change effects within and between input aggregates the model is used to decompose the sources of change in co2 emissions in the u s over the 1972 82 timeframe using hybrid energy value tables for the initial and terminal years results show the significant effect of substitution within the energy sector and between energy and other inputs as the leading causes of the decline in carbon dioxide emissions

mnes location strategies and labor standards the role of operating and reputational considerations across industries we investigate the role of local labor standards on mnes location decisions across different sectors and sub national regions within a developing country we suggest that foreign investors adopt selective location strategies in connection with specific labor standards as a result of reputational and operating considerations foreign firms in more hazardous sectors prefer locations with higher occupational health and safety standards because they are more exposed to reputational risks those in sectors with less reversible investments prefer locations with lower degrees of unionization because their lower bargaining power increases their sensitivity to operating costs we test our arguments across 26 sub national turkish regions over the period 2005 2011

the off farm labor supply of farmers theoretical and empirical models are developed to examine the off farm wages labor force participation and hours of work of farmers econometric estimates use data from a 1971 survey of illinois farmers the off farm wage depends on farmer human capital and the local labor market the major result confirms the sensitivity of off farm work to economic incentives a 10 increase in the off farm wage entails an 11 increase in hours of off farm work holding farm characteristics constant results also indicate effects of seasonality risk and life cycle factors on off farm work

an econometric analysis of the effects of human capital on size and growth among dairy farms the analysis of size distributions of firms has long been important both inside and outside of agriculture the study of farm size has focused on economies of scale optimal efficient size technical change descriptions of distributions and informal considerations of policy outside of farming the emphasis has been on the relationships between size and growth in both literatures there has been some awareness of the role of the firm operator in firm size and growth in this paper we examine herd size and herd growth for a large sample of southern dairy farms our emphasis is on the relationship of human capital of the operator to the crosssectional size and growth patterns other related work considers size growth issues in more detail sumner and leiby our research relates to several literatures that have evolved along distinct paths these include the analysis of the size distribution of farms see stanton the role of human capital in agriculture and earnings distributions and the analysis of the size distribution of business firms

rural population growth 1950 1990 the roles of human capital industry structure and government policy human capital raises rural incomes but this effect is swamped by higher returns to human capital in urban markets this leads to brain drain from rural areas populations grow more rapidly in rural counties that have a diversified employment base farm population grows faster or declines more slowly in counties with relatively high farm income and nonfarm populations grow faster in counties with relatively high nonfarm income however higher farm incomes lead to slower nonfarm population growth and vice versa rural county government services financed by local taxes or debt have neutral or negative effects on population growth rural population in the united states increased 53 between 1900 and 1990 this increase is concentrated in the nonfarm rural sector where population has grown to three times its turn of the century level nevertheless there exists a concern that rural areas are threatened by population declines that will gradually erode the ability of communities to provide public services necessary for their citizens eventually the fear is that these communities will become too small to be selfsustaining and will disappear one might ask why these concerns exist in the face of slowly rising rural populations one reason is that the overall rural population increase masks a huge migration of labor off the farm the rural farm population has fallen to one tenth its 1900 level if a strong farm economy is necessary to sustain rural communities then the farm population decline is a threat to the future viability of rural communities on the other hand off farm employment opportunities are increasingly important to the

determinants of global natural gas consumption and import export flows abstract based on the data of the bp statistical review of world energy this paper constructs the consumption and import export of natural gas identities it discusses the drivers of changes in global natural gas consumption and trade flows from 2008 to 2015 using the extended logarithmic mean divisia index the results show that differences in the natural gas supply and demand across countries or regions as well as the distribution of energy between the domestic and international markets can be better explained when natural gas trade movements are considered by comparing the supply and consumption increment of natural gas this study finds that only the energy intensity economic growth and demographic effects are consistent with each other the changes in the impact of other effects mainly depend on storage variations and statistical errors in addition the primary drivers of the incremental changes in natural gas consumption vary in different countries they include production scale import scale export scale consumption structure proportion energy intensity economic growth and population and balance effects finally the consumption competitiveness of the liquefied natural gas significantly improved over the examined period

does inequality lead to greater efficiency in the use of local commons the role of strategic investments in capacity abstract this paper examines how inequality in access to credit affects the strategic behavior of users of a common resource in their investment and extraction decisions a dynamic two stage game is developed in which agents choose the level of sunk investment in capacity and the consequent extraction path the results show that agents invest in excess capacity except when inequality is very high the relation between inequality and efficiency in resource extraction is found to be non monotonic with the steady state resource stock being closest to the optimal level when either inequality is very high or very low

the determinants of the migration of labor out of agriculture in the united states 1940 85 the flow of labor out of production agriculture is analyzed using a two sector model of occupational choice a migration equation is specified and tested empirically using aggregate data for the united states the economic determinants of the migration of all farm workers and farm operators are established farm labor is found to be responsive to changes in the returns to agricultural labor relative to nonfarm labor returns given this responsiveness policies intended to increase farm income will affect the level of agricultural employment

convergence in u s productivity growth for agriculture implications of interstate research spillovers for funding agricultural research state crop livestock and aggregate agricultural total factor productivity tfp data 1950 82 are examined for evidence of convergence to a single tfp level convergence or to a steady state rate of growth or conditional convergence our empirical results do not support convergence but do support convergence the rate of convergence is variable and depends on research and development r d spillins from other states private r d and farmers schooling the finding of strong positive interstate spillover effects implies that independent state planning of agricultural research is inefficient and cooperation across states boundaries including establishment of new political jurisdictions for financing public agricultural research can enhance efficiency

carbon dioxide emission drivers for a typical metropolis using input output structural decomposition analysis as the capital of china beijing is regarded as a major metropolis in the world study of the variation in temporal co2 emissions generated by the driving forces in beijing can provide guidance for policy decisions on co2 emissions mitigation in global metropolises based on input output structural decomposition analysis io sda we analysed the driving forces for the increment in co2 emissions in beijing from both production and final demand perspectives during 1997 2010 according to our results the co2 emission growth in beijing is driven mainly by production structure change and population growth partly offset by co2 emission intensity reduction as well as the decline in per capita final demand volume during the study period final demand structure change has a limited effect on the change in the co2 emissions in beijing from the final demand perspective urban trades urban residential consumption government consumption and fixed capital formation are mainly responsible for the booming emissions this study showed how the top down io sda methodology was implemented on a city scale policy implications from this study would be helpful for addressing co2 emissions mitigation in global capital cities and metropolises

metafroniter energy efficiency with co2 emissions and its convergence analysis for china this paper measures the energy efficiency performance with carbon dioxide co2 emissions in 30 provinces in china during the period of 1997 2011 using a meta frontier framework with the improved directional distance function ddf we construct a new environmental production possibility set by combining the super efficiency and sequential data envelopment analysis dea models to avoid discriminating power problem and technical regress when evaluating efficiency by ddf then it is used in a meta frontier framework to reflect the technology heterogeneities across east central and west china the results indicate that eastern china achieved the highest progress inefficiency relative to the metafrontier followed by western and the central china by focusing on technology gaps we offer some suggestions for the different groups based on group frontier and meta frontier analyses the inefficiency can be attributed to managerial failure for eastern and western china and technological differences for central china the convergence analysis shows that energy and co2 emission governance will produce negative effects on economic growth and it is suitable and acceptable to introduce rigorous environmental measures in eastern china

analysis of energy efficiency and energy savings potential in china s provincial industrial sectors abstract because industrial sectors in china are energy intensive improving energy efficiency and promoting energy savings in these sectors are of great importance for the further sustainable development of china s economy using a proposed meta frontier data envelopment analysis dea this paper analyzes the total factor energy efficiency and energy savings potential in china s provincial industrial sectors for the years 2000 2014 from three perspectives namely the technology gap management and scale the results indicate that 1 driven by technological progress energy efficiency during the sample period was greatly improved though the expansion of technology gaps between regions and the decline in scale efficiency represented two significant handicaps 2 the current energy efficiency in china s industrial sectors remains extremely low indicating that there is considerable potential for energy efficiency improvement and energy savings and 3 the sources of energy inefficiency and energy savings potential in china s industrial sectors exhibit spatially distinct characteristics accordingly it is determined that most of china s eastern provinces should focus on improving scale and management efficiency whereas most of its central and western provinces should concentrate on three factors narrowing the regional technology gap improving management efficiency and optimizing the industrial scale

the economic aftermath of resource booms evidence from boomtowns in the american west the current us oil and gas boom is injecting labour capital and revenue into communities near reserves will these communities be cursed with lower long run incomes in the wake of the boom we study the oil boom and bust cycle of the 1970s and 1980s to gain insights using annual data on drilling to identify western boom and bust counties we find substantial positive local employment and income effects during the boom in the aftermath of the bust however we find that incomes per capita decreased and unemployment compensation payments increased relative to what they would have been if the boom had not occurred