psychological distance and the dual role of price when evaluating a product consumers may interpret price information as either an indicator of quality or an indicator of monetary sacrifice on the basis of construal level theory we propose that psychological distance alters the weight consumers attach to these opposing roles of price four experiments show 1 that from both a temporally and a socially distant perspective the price perceived quality relationship is more pronounced 2 that from a temporally proximal perspective the price perceived sacrifice relationship is more pronounced 3 that these effects stem from differences in the way consumers mentally construe price information and 4 that when people initially use price to judge a product for distant future consumption it receives less attention as an indicator of sacrifice in a later evaluation for near future consumption these findings have implications for prelaunch communication activities and preference elicitation methods such as conjoint analysis

competition and the number of firms in a market are duopolies more competitive than atomistic markets this paper uses a variant of the standard search model to examine market equilibrium and the consequences for market equilibrium of an increase in the number of firms if marginal search costs increase with the number of searches then the demand curve facing any firm will be kinked with the elasticity of demand with respect to price decreases being less than with respect to price increases prices may not change in response to changes in marginal costs as the number of firms increases the maximum price that is consistent with equilibrium increases to the monopoly price but the minimum price decreases on the other hand if marginal search costs decrease with the number of searches equilibrium if it exists is characterized by a

arbitrary values good causes and premature verdicts abstract this paper offers an alternative interpretation of the conclusions kahneman and knetsch propose based on two contingent valuation cvm surveys the evaluation argues that while framing is important to cvm estimates the design implementation and empirical findings reported from these surveys do not support their judgments moreover with the exception of temporal embedding conventional economic descriptions of individual behavior can explain the response patterns that they suggest are at variance with standard value theory

the role of price in multi attribute product evaluations the potentially multifaceted role of price in product evaluations is investigated with an empirical analysis of surveyed beliefs attitudes and intentions regarding automobile brands it is found that price beliefs both influence and are influenced by beliefs about a brand s quality thereby contributing to the attribution definition process however price is not a significant determinant of overall attitude it is also found that price becomes a negative factor when behavioral intentions are involved lending support to an economic interpretation of price

anomalies risk aversion economists ubiquitously employ a simple and elegant explanation for risk aversion it derives from the concavity of the utility of wealth function within the expected utility framework we show that this explanation is not plausible in most applications since anything more than economically negligible risk aversion over moderate stakes requires a utility of wealth function that is so concave that it predicts absurdly severe risk aversion over very large stakes we present examples of how the expected utility framework has misled economists and why we believe a better explanation for risk aversion must incorporate loss aversion and mental accounting

optimal prices for alpine ski passes abstract the purpose of this paper is to examine the relationship between price and demand and to determine the effect of variable pricing on ski resort revenues we use data from a survey of existing skiers at three ski resorts in the inland region of norway to estimate price response functions based on a number of characteristics including day of week and distance to the resort the various price response functions are subsequently used to calculate optimal prices for each subset of skiers according to their differing characteristics the results show that ski resorts have the potential to increase their total revenues substantially by adopting a more dynamic approach to pricing thus our results provide academic support for the findings of ski resorts that have implemented such pricing strategies

testing for the survey mode effect on contingent valuation data quality a case study of web based versus in person interviews this paper addresses the lack of empirical evaluation of the use of web based surveys in the context of contingent valuation surveys we compare using a case study in person interviews with web based surveys regarding response rate information additivity effects and respondents attitudes towards paying the web based survey had a much lower response 5 1 than the in person interviewing 84 we find the web based contingent valuation surveys to be neither more susceptible to information additivity effects nor more prone to zero protest responses we conclude in favor of the use of web based surveys namely in portugal where the number of internet users is rapidly increasing although further research efforts are required on their use

oil price shocks policy uncertainty and stock returns of oil and gas corporations abstract this paper investigates the effects of oil price shocks and economic policy uncertainty on the stock returns of oil and gas companies we find that an oil demand side shock has a positive effect on the return of oil and gas companies on average whereas shocks to policy uncertainty have a negative effect on the return historical decomposition shows that the effects of oil shocks on the stock return are amplified by the endogenous policy uncertainty responses these results are consistent with those for major integrated oil and gas companies the return responses however show heterogeneous effects of structural shocks on upstream midstream and downstream oil and gas companies suggesting that a well diversified portfolio is obtainable

competition and price variation when consumers are loss averse we modify the salop 1979 model of price competition with differentiated products by assuming that consumers are loss averse relative to a reference point given by their recent expectations about the purchase consumers sensitivity to losses in money increases the price responsiveness of demand and hence the intensity of competition at higher relative to lower market prices reducing or eliminating price variation both within and between products when firms face common stochastic costs in any symmetric equilibrium the markup is strictly decreasing in cost even when firms face different cost distributions we identify conditions under which a focal price equilibrium where firms always charge the same focal price exists and conditions under which any equilibrium is focal

connectedness of economic policy uncertainty and oil price shocks in a time domain perspective abstract in this paper we investigate causality and connectedness between economic policy uncertainty and oil price shocks across time scales by incorporating the wavelet approach into the structural vector autoregression var framework proposed by diebold and yilmaz 2009 2012 2014 we find that crude oil prices behave like receivers of information from economic policy uncertainty regardless of time scale however the causality relationship between economic policy uncertainty and oil price shocks intensifies as time scales increase in addition the connectedness relationship is robust to time scale changes whereas the causal relationship intensifies as time scales increase notably the weight of us economic policy uncertainty increases in the var system as time scales increase in particular we employ the west texas intermediate wti crude oil price as an alternative measure to increase the robustness of our results and identify differences in the var system overall the total connectedness of the wti crude oil price is lower than that of the brent crude oil price regardless of time scale our results provide meaningful information for both investors and policymakers

imagined risks and cost benefit analysis everyone recognizes substantial discrepancies between the public s rankings of hazards and those of the experts for example experts at the environmental protection agency think that hazardous waste sites pose mediumto low risks to the public while indoor air pollution poses a high risk yet public perceptions have driven policy to focus on hazardous waste sites rather than on indoor air quality stephen breyer 1993 pp 19 20 whose beliefs should determine government policy when the public s beliefs differ from those of the experts the problem evaporates if the public perhaps recognizing its inability to deal with complex technical issues entrusts risk assessment to the government and its experts but what if the public perhaps distrusting government and experts is unwilling to leave risk assessment to the experts paul portney 1992 p 131 posed a version of this whose beliefs question succinctly in his fable trouble in happyville

macroeconomic forecasting and structural change the aim of this paper is to assess whether explicitly modeling structural change increases the accuracy of macroeconomic forecasts we produce real time out of sample forecasts for inflation the unemployment rate and the interest rate using a time varying coefficients var with stochastic volatility tv var for the us the model generates accurate predictions for the three variables in particular for inflation the tv var outperforms in terms of mean square forecast error all the competing models fixed coefficients vars time varying ars and the na ove random walk model these results are also shown to hold over the period commonly referred to as the great moderation

price dispersion in the small and in the large evidence from an internet price comparison site this paper examines four million daily price observations for more than 1 000 consumer electronics products on the price comparison site http shopper com we find little support for the notion that prices on the internet are converging to the law of one price in addition observed levels of price dispersion vary systematically with the number of firms listing prices the difference between the two lowest prices the gap averages 23 per cent when two firms list prices and falls to 3 5 per cent in markets where 17 firms list prices these empirical results are an implication of a general clearinghouse model of equilibrium price dispersion

using neoclassical consumer choice theory to produce a market map from purchase data this article presents a new model for estimating the spatial representation of objects and preference vectors from actual choice behavior of individuals or households it is based on neoclassical economic theory of consumer choice the model integrates both decisions of which good s to buy and the quantity of purchase overall preference is decomposed into price effects and intrinsic preference for the good a maximum likelihood method for estimating the model parameters is described and illustrated using choice data of ketchup brands collected by the use of electronic supermarket scanners

collusion and price rigidity we consider an in nitely repeated bertrand game in which prices are publicly observed and each rm receives a privately observed i i d cost shock in each period we focus on symmetric perfect public equilibria sppe wherein any punishments are borne equally by all rms we identify a tradeoff that is associated with collusive pricing schemes in which the price to be charged by each rm is strictly increasing in its cost level such fully sorting schemes offer efficiency bene ts as they ensure that the lowest cost rm makes the current sale but they also imply an informational cost distorted pricing and or equilibrium path price wars since a higher cost rm must be deterred from mimicking a lower cost rm by charging a lower price a rigid pricing scheme where a rm s collusive price is independent of its current cost position sacri ces efficiency bene ts but also diminishes the informational cost for a wide range of settings the optimal symmetric collusive scheme requires i the absence of equilibrium path price wars and ii a rigid price if rms are sufficiently impatient however the rigid pricing scheme cannot be enforced and the collusive price of lower cost rms may be distorted downward in order to diminish the incentive to cheat when the model is modi ed to include i i d public demand shocks the downward pricing distortion that accompanies a rm s lower cost realization may occur only when current demand is high

modeling loss aversion and reference dependence effects on brand choice based upon a recently developed multiattribute generalization of prospect theory s value function tversky and kahneman 1991 we argue that consumer choice is influenced by the position of brands relative to multiattribute reference points and that consumers weigh losses from a reference point more than equivalent sized gains loss aversion we sketch implications of this model for understanding brand choice we develop a multinomial logit formulation of a reference dependent choice model calibrating it using scanner data in addition to providing better fit in both estimation and forecast periods than a standard multinomial logit model the model s coefficients demonstrate significant loss aversion as hypothesized we also discuss the implications of a reference dependent view of consumer choice for modeling brand choice demonstrate that loss aversion can account for asymmetric responses to changes in product characteristics and examine other implications for competitive strategy

residential willingness to pay for deep decarbonization of electricity supply contingent valuation evidence from hong kong abstract motivated by the government s proposed target of reducing co2 emissions by 30 of the 2005 level in the year 2020 we estimate the residential willingness to pay wtp for deep decarbonization of hong kong s electricity supply which is heavily dependent on coal fired generation our contingent valuation survey conducted in 2016 of 1460 households yields dichotomous choice data based on the respondents answers to a series of closed ended questions such data are less susceptible to the strategic bias that often plagues self stated wtp data obtained by direct elicitation via open ended questions using binary choice models we find that average wtp is 48 51 relative to current bills if the decarbonization target is achieved via natural gas generation and renewable energy however estimated wtp declines to 32 42 when decarbonization entails additional nuclear imports from china as the projected bill increase caused by the target s implementation is 40 our wtp estimates support the government s fuel mix policy of using natural gas and renewable energy to displace hong kong s coal generation

the asymmetric response of gasoline prices to oil price shocks and policy uncertainty abstract this study shows that the effect of oil price shocks on the real price of gasoline is interrelated with economic policy uncertainty economic policy shocks are linked with increased real price of gasoline and reduced consumption of gasoline there is evidence that the fluctuation of both real gasoline prices and of gasoline consumption is associated with uncertainty of tax legislation expiration expectation as well as other components of economic policy uncertainty positive shocks to economic policy uncertainty have relatively larger effects on gasoline prices than do negative shocks to economic policy uncertainty economic policy uncertainty responds asymmetrically to increases and decreases in real oil price shocks to economic policy uncertainty account for 16 1 of variation in real gasoline prices and for 4 9 of variation in gasoline consumption in the long run

when more seems like less differential price framing increases the choice share of higher priced options four experiments supported by six supplemental studies show that premium but higher priced products e g direct flights larger capacity data storage devices are more popular when the additional

on the contingent valuation of mortality risk reduction in developing countries using the contingent valuation method in developing countries to value mortality risk reduction is particularly challenging because of the low level education of the respondents in this article we investigate whether some brief training regarding probability and risk concepts has any significant effect on the willingness to pay wtp responses we elicit individuals risk perceptions by providing information on age specific mortality risks and find that people on average overestimate the mortality risk at younger ages and underestimate it at older ages our results indicate a significantly higher wtp for the trained sub sample and wtp is sensitive to the magnitude of risk reduction for both the sub samples

consumers preferences for the attributes of post pc results of a contingent ranking study with the explosive growth of the internet and the change in consumer demand post pc is emerging as a substitute for the existing desktop pc and laptop pc post pc is a new computer which is portable with wireless networking cheaper than the existing pc and specializing in the specific functions that consumers want rudimentary post pcs such as pda web pad and smart phone are already in use in the future owing to technological progress the heterogeneity of related companies and the low entry barrier various post pcs will be developed this paper attempts to analyse consumers willingness to pay wtp for post pc with such attributes as portability cpu speed data input method using key board or electric pen monitor size and price to this end a contingent ranking method is applied which makes the respondents rank hypothetical post pc alternatives featuring various combinations of attributes via a survey data collected in korea using the estimated wtp the shape and the capacity of future po

your money or your life green growth policies and welfare in 2050 this paper proposes a simple index of economic progress that weighs in the monetary cost induced by climate change mitigation policies as well as the health benefits arising from the reduction in local air pollution the shadow price of pollution is calculated indirectly through its impact on life expectancy taking into account the health benefits of mitigation policies significantly reduces their monetary cost in china and india as well as in countries with large fossil based energy producing sectors australia canada and the united states

individual preferences monetary gambles and stock market participation a case for narrow framing we argue that narrow framing whereby an agent who is offered a new gamble evaluates that gamble in isolation may be a more important feature of decision making than previously realized our starting point is the evidence that people are often averse to a small independent gamble even when the gamble is actuarially favorable we find that a surprisingly wide range of utility functions including many nonexpected utility specifications have trouble explaining this evidence but that this difficulty can be overcome by allowing for narrow framing our analysis makes predictions as to what kinds of preferences can most easily address the stock market participation puzzle

valuing public goods with the contingent valuation method a critique of kahneman and knetsch the social stakes in the use and abuse of the contingent valuation method cvm are very high recent developments in environmental law have elevated the cvm to the status of a refutable presumption in cases brought under certain statutes it is no longer adequate for economists to sniff at the continued popularity of the cvm in such cases it is instead incumbent on economists to come to some conclusions as to the domain under which the cvm may or may not be correctly applied one should not expect a simple thumbs up or thumbs down assessment in this matter such an expectation would be naive with respect to the inherent complexity of the issue not to mention the financial incentives that expert witnesses might have to breed as if controversy in an adversarial legal system in this context the strong admonitions of kahneman and knetsch 3 kk against the casual use of the cvm must be carefully examined they present what they believe to be evidence to support the claim that the cvm suffers from an embedding effect and that any reported willingness to pay wtp is best interpreted as the purchase of moral satisfaction rather than as a measure of the value associated with a particular public good i argue that their evidence is insufficient to test the implied hypotheses that it is incorrectly reported and that it is in large measure fully consistent with received economic theory

willingness to pay entrance fees to natural attractions an icelandic case study abstract introducing entrance fees to natural attractions may help counteract the threat of inadequate public funds for site maintenance and management the primary objective of this study is to measure visitors willingness to pay such fees in iceland where no such measurement has previously been undertaken a questionnaire survey based on the contingent valuation method was carried out at two major natural attractions in iceland gullfoss waterfall and skaftafell national park over 92 of the 252 respondents were willing to pay an entrance fee mean amounts and population consumer surplus estimates per season were isk 1 333 and isk 41 million at gullfoss and isk 508 and isk 34 million at skaftafell respectively modest fees would not significantly decrease the demand for these attractions slight differences were found in the willingness to pay according to income attitude towards environmental protection number of previous visits history of paying entrance fees country of residence age and education implications of the empirical study for policy makers and site managers are provided

limits to substitution between ecosystem services and manufactured goods and implications for social discounting this paper examines implications of limits to substitution for estimating substitutability between ecosystem services and manufactured goods and for social discounting based on a model that accounts for a subsistence requirement in the consumption of ecosystem services we provide empirical evidence on substitution elasticities we find an initial mean elasticity of substitution of two which declines over time towards complementarity we subsequently extend the theory of dual discounting by introducing a subsistence requirement the relative price of ecosystem services is non constant and grows without bound as the consumption of ecosystem services declines towards the subsistence level an application suggests that the initial discount rate for ecosystem services is more than a percentage point lower as compared to manufactured goods this difference increases by a further half percentage point over a 300 year time horizon the results underscore the importance of considering limited substitutability in long term public project appraisal

a theory of dynamic oligopoly ii price competition kinked demand curves and edgeworth cycles we provide game theoretic foundations for the classic kinked demand curve equilibrium and edgeworth cycle we analyze a model in which firms take turns choosing prices the model is intended to capture the idea of reactions based on short run commitment in a markov perfect equilibrium mpe a firm s move in any period depends only on the other firm s current price there are multiple mpe s consisting of both kinked demand curve equilibria and edgeworth cycles in any mpe profit is bounded away from the bertrand equilibrium level we show that a kinked demand curve at the monopoly price is the unique symmetric renegotiation proof equilibrium when there is little discounting we then endogenize the timing by allowing firms to move at any time subject to short run commitments we find that firms end up alternating thus vindicating the ad hoc timing assumption of our simpler model we also discuss how the model can be enriched to provide explanations for excess capacity and market sharing keiiwords tacit collusion markov perfect equilibrium kinked demand curve edgeworth cycle excess capacity market sharing endogenous timing

is the income elasticity of environmental improvements less than one we estimated the income elasticity of environmental improvements for a number of european data sets the value of this parameter is consistently found to be less than one with few exceptions our findings are compared with state of the art contingent valuation studies from other countries we also compared our findings with those reported in the literature on charitable donations and corporate donations these studies show a similar pattern donations decrease as a percentage of income as income increases

the contingent valuation debate why economists should care t he contingent valuation method involves the use of sample surveys questionnaires to elicit the willingness of respondents to pay for generally hypothetical projects or programs the name of the method refers to the fact that the values revealed by respondents are contingent upon the constructed or simulated market presented in the survey a spirited and occasionally mean spirited battle over such methods is currently being waged involving competing factions within the federal government economists and lawyers representing business and environmental groups and interested academics as well at issue is a seemingly quite specific question should environmental regulations currently under development at both the department of the interior and the department of commerce sanction the use of the contingent valuation method in estimating the damage done by spills of oil chemicals or other substances covered by federal law more generally the debate raises broad questions about what economists have to say about the values that individuals place on public or private goods the two papers that follow this one make cases for and against the use of the contingent valuation method my aim here is to provide an overview of the technique and the debate surrounding it i also want to suggest why this debate should matter to economists both professionally and in their roles as citizens and consumers

on the welfare effects and political economy of competition enhancing policies we analyse the welfare effects of policies that intensify product market competition and the channels through which they operate using a circular model of horizontal product differentiation with asymmetric costs we study the effects of increased price competition on market selection among incumbent firms cost reduction effort and entry of new firms the model also generates an endogenous demand for competition enhancing or retarding policies arising from cost heterogeneity and we demonstrate the possibility of a low competition political economy trap simulations of the model illustrate that the selection effects we analyse which traditional cost benefit analysis is unlikely to capture can be large

paying for mitigation a multiple country study a contingent valuation study conducted in china sweden and the united states was used to investigate citizens willingness to pay wtp for reducing co2 emissions we find that a majority of the respondents in all three countries believe that the mean global temperature has increased over the last 100 years and that humans are responsible for the increase the share of americans that believes these statements is smaller and a relatively larger share of americans also believes that nothing can be done to stop climate change sweden has the highest wtp while china has the lowest jel q51 q54

altruism in cost benefit analysis it has recently been argued that altruistic motives for paying for a public sector project should be ignored in a cost benefit analysis the reason is that including altruism would mean a kind of double counting of the project s benefits this paper takes a look at these arguments and derives cost benefit rules which cover different kinds of altruism the paper also provides some recommendations for the treatment of altruism in studies using the contingent valuation method

shrouded attributes consumer myopia and information suppression in competitive markets bayesian consumers infer that hidden add on prices e g the cost of ink for a printer are likely to be high prices if consumers are bayesian firms will not shroud information in equilibrium however shrouding may occur in an economy with some myopic or unaware consumers such shrouding creates an inefficiency which firms may have an incentive to eliminate by educating their competitors customers however if add ons have close substitutes a curse of debiasing arises and firms will not be able to profitably debias consumers by unshrouding add ons in equilibrium two kinds of exploitation coexist optimizing firms exploit myopic consumers through marketing schemes that shroud high priced add ons in turn sophisticated consumers exploit these marketing schemes it is not possible to profitably drive away the business of sophisticates it is also not possible to profitably lure either myopes or sophisticates to nonexploitative firms we show that informational shrouding flourishes even in highly competitive markets even in markets with costless advertising and even when the shrouding generates allocational inefficiencies

how beliefs influence the willingness to contribute to prevention expenditure we study how beliefs affect individuals willingness to contribute to prevention expenditure through a two type n person public good game and test several results empirically we show analytically that pessimistic agents will invest more in prevention expenditure than optimists we also demonstrate how small differences in beliefs may induce substantial differences in type related prevention expenditure the more atomistic agents are the less they will contribute to the public good pessimistic beliefs then lead to a double deprivation and we discuss potential issues and remedies the more optimistic a society is the lower will be its total green expenditure we then use a large international survey to study how beliefs and additional controls determine prevention expenditure we rely on several proxies for beliefs and the willingness to contribute to prevention expenditure which we combine through principal component analysis in addition we investigate the role of environmental education for the relationship between beliefs and the willingness to contribute because of potential endogeneity bias due to unobserved variables that are likely to affect both beliefs and the willingness to contribute we follow the theoretical analysis and resort to a recursive bivariate model our main findings are very much in line with the theoretical predictions we find across all specifications that more optimistic beliefs lead to a lower willingness to contribute environmental education affects the willingness to contribute only indirectly through its impact on beliefs

sticky prices new evidence from retail catalogs this paper presents new results on the size frequency and synchronization of price changes for twelve selected retail goods over the past 35 years three basic facts about the data are uncovered first nominal prices are typically fixed for more than one year although the time between changes is very irregular second prices change more often during periods of high overall inflation third when prices do change the sizes of the changes are widely dispersed both large and small changes occur for the same item and the sizes of these changes do not closely depend on overall inflation

are french consumers ready to pay a premium for eco labeled seafood products a contingent valuation estimation with heterogeneous anchoring could the future french eco label for fresh seafood products find its place in the french market this study employs a contingent valuation method to estimate french consumers willingness to pay wtp for eco labeled fresh seafood products we exploit original data from a survey carried out in 2010 where 626 participants responded to a double bounded dichotomous choice model through an ascending or descending bid system controlling for shift and anchoring effects in random effect probit models we significantly improve estimation of wtp and its determinants for the three species studied monkfish lobster sole in particular when using heterogeneous anchoring we show that wtp is positively correlated to respondents income and also to their environmental concern to living alone to living far from the coast and to trusting ngos or public institutions more than producer organizations to implement an eco label we also show that the mean price premiums do not differ between species finally on average the maximum premium consumers accepted to pay is approximately 10 of the product price

dynamic spillovers of oil price shocks and economic policy uncertainty this study examines the dynamic relationship between changes in oil prices and the economic policy uncertainty index for a sample of both net oil exporting and net oil importing countries over the period 1997 01 2013 06 to achieve that an extension of the diebold and yilmaz 2009 2012 dynamic spillover index based on structural decomposition is employed the results reveal that economic policy uncertainty oil price shocks responds negatively to aggregate demand oil price shocks economic policy uncertainty shocks furthermore during the great recession of 2007 2009 total spillovers increase considerably reaching unprecedented heights moreover in net terms economic policy uncertainty becomes the dominant transmitter of shocks between 1997 and 2009 while in the post 2009 period there is a significant role for supply side and oil specific demand shocks as net transmitters of spillover effects these results are important for policy makers as well as investors interested in the oil market

oil price shocks and policy uncertainty new evidence on the effects of us and non us oil production important interaction has been established for us economic policy uncertainty with a number of economic and financial variables including oil prices this paper examines the dynamic effects of us and non us oil production shocks on economic policy uncertainty using a structural var model such an examination is motivated by the substantial increases in us oil production in recent years with implications for us political and economic security positive innovations in us oil production are associated with decreases in us economic policy uncertainty the economic forecast interquartile ranges about the us cpi and about federal state local government expenditures are particularly sensitive to innovations in us oil supply shocks shocks to us oil supply disruption causes rises in the cpi forecast uncertainty and accounts for 21 of the overall variation of the cpi forecaster disagreement dis aggregation of oil production shocks into us and non us oil production yields novel results oil supply shocks identified by us and non us origins explain as much of the variation in economic policy uncertainty as structural shocks on the demand side of the oil market

willingness to pay for improved air quality in sweden the aim of the paper is to quantify individual willingness to pay measures of improved air quality in sweden by using the contingent valuation method cvm such measures are important for policy makers when deciding about public investments and policy instruments in order to regulate environmental impacts e g from road transportation and industry the mean willingness to pay wtp for a 50 reduction of harmful substances where the respondents live and work was about 2000 sek year which is of the same order of magnitude as earlier stated preference studies in nordic countries most parameters in the econometric analysis had the expected sign wtp was increasing in income wealth and education it was larger for men members of environmental organizations people living in big cities which are on average more polluted and people who own their house or apartment it was lower for retired people however the additional wtp for people in big cities although significantly higher than for other people

aggregation and deliberation in valuing environmental public goods starting from a distinction between kantian principle based and utilitarian preference based approaches in political theory this essay argues that we may understand normative judgments individuals make about policy to express principled views of the public interest or purpose not private preferences about their own consumption opportunities these judgments in other words state opinions about what we ought to do as a society rather than report preferences about what i want as a utility maximizer this essay then argues that contingent valuation can take into account these kinds of judgments which dominate public discourse about the environment only if it moves toward a deliberative discursive jury like research method emphasizing informed discussion leading toward a consensus based on an argument about the public interest

fairness of prices user fee policy and willingness to pay among visitors to a national forest abstract imposing user fees in nature based tourism nbt contexts has been a controversial issue based on the notions of justice and fairness this study extended previous work examining the relationship between attitudes toward user fees and spending support in a proposed structural model of price fairness fee spending support and willingness to pay wtp this paper identified the antecedents of wtp user fees and empirically examined to what extent the data fit the model furthermore the moderating role of place attachment in the model was investigated by using multiple group structural equation modeling subjects n 562 were recreational tourists to a forest area in the southeast u s results revealed that spending support partially played a mediating role in the relationship between perceived price fairness and wtp user fees a multiple group invariance test also demonstrated that while the degree of place identity moderated the effect of price fairness on spending support the degree of place dependence did not influence the relationships among the antecedents of wtp

modeling gift choice the effect of uncertainty on price sensitivity abstractgift giving generates high revenues for retailers it is also marked with significant welfare or deadweight loss in that givers tend to pay more than the receivers valuation previous research has attributed this discrepancy to givers inaccurate predictions of the receivers preferences this research demonstrates that reduced price sensitivity is another important source of the deadweight loss givers use gift prices to signal the importance of their relationship with the receiver in order to demonstrate this mechanism the authors develop a new bayesian gift choice model that captures both preference predictions as well as the signaling value of price the model is estimated on two choice based conjoint studies for gift giving that allow for the manipulation of the giver s uncertainty about the receiver s preferences both studies show the strong signaling value of price especially when givers are uncertain about receivers preferences decomposition of the deadweight loss shows that the s

do existence values for cost benefit analysis exist the use of the contingent valuation method to generate estimates of existence value for input to cost benefit analysis requires that individuals have utility functions defined over the relevant arguments the validity of the assumption that the required utility functions generally exist has been questioned it has been argued that some individuals will respond on the basis of lexicographic preference orderings it has also been argued that some individuals do not consider that market or individual willingness to pay criteria are appropriate where existence value type issues are at stake the paper considers survey evidence bearing upon these arguments it is concluded that the evidence is consistent with the view that it is incorrect to proceed on the assumption that individuals generally satisfy the assumptions required for the existence of existence values for use in cost benefit analysis

dual role of price and myopia in a marketing channel abstract in this paper we study a dynamic two player channel where the manufacturer controls the wholesale price and the investment in quality and the retailer chooses the retail price we consider that the retail price affects both the demand and the perceived quality of the brand and that its variations contribute to the building of an internal reference price one of the model s distinctive features is that it accounts for the two meanings of price i e its classical objective measure of the cost of acquiring a particular quantity of the product and its subjective roles as an assessment of the quality of the product and an evaluation of gains or losses deal vs sacrifice resulting from buying a cheap or an expensive product this dual computation is done with respect to the internal reference price our objective is to investigate the impact of retailer s myopia on the pricing strategies and payoffs of channel members in this context a myopic retailer is an agent that disregards the effects of its pricing strategy on the evolution of the perceived brand quality and the reference price

oil price forecastability and economic uncertainty information on economic policy uncertainty does matter in predicting the change in oil prices we compare the forecastability of standard bayesian and time varying var against univariate models the time varying var model outranks all alternative models over the period 2007 1 2014 2

consumer price and promotion expectations an experimental study the authors report results from a controlled experiment designed to investigate the impact of a brand s price promotion frequency and the depth of promotional price discounts on the price consumers

risk appetite and oil prices abstract we demonstrate that oil prices and their volatility are no longer determined solely by real economic shocks to supply of and demand for oil but are also driven by shocks originating in the economic uncertainty and risk appetite of investors that prevail in the equity market the contribution of the latter factor has become particularly remarkable since the mid 2000s to establish these results we dismantle the squared vix index determined in the s p 500 options market into the conditional variance in stock returns to proxy for economic uncertainty and the equity variance risk premium to proxy for risk appetite using threshold garch structural vector auto regression and causality models we provide evidence about the link between risk appetite oil price returns and volatility furthermore investors appetite for risk drives changes in the ovx which measures perceptions about future oil volatility but not vice versa our results provide a better understanding of the relationship between oil the vix and its two proposed components in particular we show that changes in the risk appetite of investors are an important determinant not only for the price of equities but also for that of the most important energy resource oil

residential energy efficient technology adoption energy conservation knowledge and attitudes an analysis of european countries abstract relationships between measures of household energy use behavior and household characteristics are estimated using a unique dataset of approximately 5000 households in 10 eu countries and norway family age composition patterns are found to have a distinct impact on household energy use behavior households with young children are more likely to adopt energy efficient technologies and energy conservation practices and place primary importance on energy savings for environmental reasons by contrast households with a high share of elderly members place more importance on financial savings and have lower levels of technology adoption energy conservation practice use and knowledge about household energy use education levels also matter with higher levels associated with energy efficient technology adoption and energy conservation practice use similarly university education increases the stated importance of energy savings for greenhouse gas reductions and decreases the stated importance for financial reasons education impacts also vary greatly across survey countries and there is some evidence of an eastern western european divide with respect to attitudes towards energy savings these cross country differences highlight the need to balance a common eu energy efficiency policy framework with flexibility for country specific policies to address unique constraints to energy efficient technology and conservation practice adoption

the influence of generic advertising on brand preferences more than a billion dollars is spent annually on generic advertisements that promote the consumption of commodity goods generic advertising is designed to increase primary demand or the size of the pie without affecting selective demand or the share of the pie we find evidence to the contrary generic advertising increases the consumer s sensitivity to changes in price and systematically alters brand preferences these effects of generic advertising can be attributed to the tendency of generic ads to change the relative importance of the attributes used to evaluate the brands the results have implications for the public policy issue of how to effectively implement generic advertising without differentially benefiting certain brands and the managerial issue of how to integrate generic and brand advertising in order to achieve product category and brand differentiation goals

the rigidity of prices this paper uses evidence on individual transaction prices to analyze price behavior the evidence shows that for many transactions pricesremain rigid for periods exceeding one year the rigidity of price ispositively correlated with industry concentration for several productsthe correlation of price changes across buyers is low the paper alsoinvestigates the relationship between price rigidity price change andthe length of time a buyer and seller have been doing business together the author interprets the evidence as emphasizing the importance of nonprice rationing and the inadequacy of models in whichprice movements alone clear markets copyright 1986 by american economic association

sticky prices in a dynamic oligopoly an investigation of s s thresholds abstract the strategic implications of costly price adjustment are investigated empirically i assume that managers are engaged in a state space game and ask if the dynamic considerations that arise when they condition their choices on the state cause prices to be more or less rigid than when players use more myopic pricing rules the answer to this question depends on a parametric specification of the problem that lends itself to empirical assessment the micro panel data used to investigate this issue consist of weekly prices sales costs and promotional activity for three brands of saltine crackers sold by four chains of grocery stores in a small us town i find that in this market strategic behavior exacerbates price rigidity the thresholds are wider and the time between changes is longer than would be observed in a more myopic setting

the influence of preciseness of price information on the travel option choice abstract 159 99 159 38 or 160 00 the phenomenon of pricing around a rounded number with apparent preciseness is commonly observed in the marketplace much research has been conducted in the general area and has established that the use of precise prices those without a zero ending tends to lead to increased sales and to a more positive customer attitude to date the best explanation offered is that most people read from left to right so the last numbers of a price may be less salient than the leading numbers in an endeavor to establish a better understanding of the phenomenon this research consists of five experiments in a tourism context to first clarify the phenomenon and account for possible alternative explanations and then to provide empirical evidence that different representations of price can imply different construal levels and thus influence consumers choice preference in tourism marketing

changes in the effects of monetary policy on disaggregate price dynamics abstract based on a time varying factor augmented vector autoregression we demonstrate that the propagation mechanism of monetary policy disturbances differs across disaggregate components of personal consumption expenditures while many disaggregate prices rise temporarily in response to a monetary tightening in the early part of the sample there is no evidence of a price puzzle at the aggregate level the share of disaggregate prices that exhibit the price puzzle diminishes from the early 1980s onwards there also is evidence of a substantial decline in the dispersion of disaggregate price responses over time this gradual decrease in cross sectional heterogeneity of disaggregate price responses is associated with a dampening effect on aggregate real economic activity and a stronger effect on the aggregate price level we illustrate by means of a multi sector sticky price model augmented by a cost channel how key structural parameters would have had to change to match this evolution of sectoral price dynamics

an empirical study of the determinants of green party voting i empirically study the determinants of individuals green voting behavior for this i make use of three datasets from germany a panel dataset and two cross sectional datasets the empirically strongest determinants are the voters attitude or distance to nuclear sites the level of schooling and net income i show that those voters with deviant attitudes or alternative world views are more likely to vote green a result of the fact that the green party has always had the position of a protest party i find little role for demographic variables like gender marital status or the number of children this is in contrast to the stated preference literature age plays a role for explaining voting behavior only insofar as it proxies for health

the public perceptions and willingness to pay from the perspective of the smog crisis in china the deteriorating air quality which is linked to human actions related to energy resources has become an urgent global problem china s air pollution has reached the hazardous level since 2000s in consideration of the serious health and social problems residential demand for clean air is increasing this paper applies the contingent valuation method to estimate public s willingness to pay wtp for reducing air pollution in the urban area of china open ended scenarios through face to face surveys are used to elicit public s wtp the two part model is employed for the estimation the probit model is used to estimate the probability of respondents who have positive wtp values and the interval regression model is employed to estimate the specific wtp level of those with nonzero wtp values the results show that nearly 90 of the respondents are willing to pay for reducing air pollution and the average amount of wtp per individual is 382 6rmb per year household income is found to be positively correlated with people s wtp and those who trust the government are more willing to share the cost of reducing air pollution this study recommends designing some effective mechanisms to tap the potentially available source of money for smog mitigation and improving the transparency of smog governance to enhance the government credibility as solutions to cope with smog crisis

a model of add on pricing this paper examines competitive price discrimination with horizontal and vertical taste differences consumers with higher valuations for quality are assumed to have stronger brand preferences two models are considered a standard competitive price discrimination model in which consumers observe all prices and an add on pricing game in which add on prices are naturally unobserved and firms may advertise a base good at a low price in hopes of selling add ons at high unadvertised prices in the standard game price discrimination is self reinforcing the model sometimes has both equilibria in which the firms practice price discrimination and equilibria in which they do not the analysis of the add on pricing game focuses on the chicago school argument that profits earned on add ons will be competed away via lower prices for advertised goods a conclusion is that add on practices can raise equilibrium profits by creating an adverse selection problem that makes price cutting unappealing although profitable when jointly adopted using add on pricing is not individually rational in a simple extension with endogenous advertising practices and costless advertising several models that could account for add on pricing are discussed

expectation based loss aversion and strategic interaction abstract by extending the equilibrium concepts of k szegi and rabin 2006 k szegi and rabin 2007 this paper analyzes the strategic interaction of expectation based loss averse players for loss averse players with choice acclimating expectations the utility from playing a mixed strategy is not linear but convex in the probabilities they assign to their pure strategies as a consequence they are generally unwilling to randomize and an equilibrium may fail to exist for players with choice unacclimating expectations by contrast randomizing over their pure strategies may indeed constitute a credible best response and an equilibrium always exists building upon these insights we delineate how expectation based loss averse players differ in their strategic behavior from their counterparts with standard expected utility preferences derive novel strategic effects discuss equilibrium selection and derive equilibrium play for some simple games

reference dependent risk attitudes we use koszegi and rabin s 2006 model of reference dependent utility and an extension of it that applies to decisions with delayed consequences to study preferences over monetary risk because our theory equates the reference point with recent probabilistic beliefs about outcomes it predicts specific ways in which the environment influences attitudes toward modest scale risk it replicates classical prospect theory including the prediction of distaste for insuring losses when exposure to risk is a surprise but implies first order risk aversion when a risk and the possibility of insuring it are anticipated a prior expectation to take on risk decreases aversion to both the anticipated and additional risk for large scale risk the model allows for standard consumption utility to dominate reference dependent gain loss utility generating nearly identical risk aversion across situations

which determinant is the most informative in forecasting crude oil market volatility fundamental speculation or uncertainty abstract this paper aims to identify the most informative determinant in forecasting crude oil market volatility we use a new garch class model based on mixed data sampling regression and the dynamic model averaging combination method to examine the predicting power of the determinants we integrate both the global economic policy uncertainty gepu indices and several national economic policy uncertainty epu indices with traditional determinants such as global oil demand supply and speculation our analysis suggests that the epu indices comprehensively integrate the information contained in other determinants specifically gepu indices and the u s s epu index have superior predictive powers for west texas intermediate spot oil volatility this finding highlights the importance of epu indices implying that they are key factors to consider when determining crude oil market volatility

the importance of ethics in environmental economics with a focus on existence values the importance of ethics and fundamental value judgments in environmental economics is high lighted by discussing the controversial concept of existence values the social value depends crucially on the social objective which is not necessarily self evident e g since some individuals tend to value nature intrinsically it is shown that the motives behind willingness to pay figures matter for the social value and the conventional view that people respond to cv questions solely in order to maximize their own utility or well being is questioned the importance of being explicit about value judgments is emphasized and it is argued that environmental economics should consider non conventional assumptions which take the social context into account to a larger degree

effect of product line pricing characteristics on product evaluations examining the issue of product line pricing from a behavioral perspective this article reports an investigation of the relationship between the price structure of a product line and consumers evaluations of a product model within the line a 2 2 4 factorial design utilizing multiple dependent variables was conducted and replicated to test hypotheses derived from behavioral research results indicate that while the price characteristics of a product line influence consumer evaluations of a product model within the line the price characteristics do not operate independently rather they interact further the research suggests that several dependent variables that are usually considered separately in price research are actually dimensions of similar constructs

forecasting realized volatility of crude oil futures with equity market uncertainty this paper examines whether the equity market uncertainty emu index contains incremental information for forecasting the realized volatility of crude oil futures we use 5 min high frequency tran

ordering effects in contingent valuation surveys this paper focuses on ordering effects in cvm surveys how the expressed value of a particular good valued in a sequence of several goods depends on where in the sequence the good is valued we use data from a norwegian cvm survey focusing on wtp for a 50 reduction in air pollution from car traffic to test for the existence of ordering effects and to apply a test for internal consistency we found considerable and significant ordering effects in our data but were not able to reject the hypothesis of internal consistency based on our survey we argue that ordering effects may be a result of rational choice these effects are problematic if a sequential valuation procedure is applied to a simultaneous problem and or the respondents are given imperfect information about the decision problem