models for referendum data the structure of discrete choice models for contingent valuation abstract in 1979 bishop and heberlein introduced an appealing variant of the contingent valuation method which required only yes or no responses hanemann developed a utility theoretic interpretation of the yes no responses which has helped popularize the approach recently cameron has offered another interpretation also utility theoretic which she argues is more general than the hanemann random utility model this paper compares the deterministic models suggested by hanemann and cameron showing them to be dual to each other it shows that correct specification of either function must exclude endogenous variables such as quantity demanded it also demonstrates that using utility theoretic models allows one to compare travel cost models and contigent valuation models on the basis of their implied behavior not on the unobservable surplus or variation measure

urban spatial structure urban structure is increasingly characterized by decentralization dispersion and multiple employment centers much is known empirically about such patterns and about how the interplay between agglomerative and dispersive forces generates spatial structures that are complex and prone to multiple equilibria and dynamic path dependence these forces operate at different spatial scales many entail unpriced interaction and external scale economies deriving from product differentiation and endogenous technical change appear particularly important because these forces interact in complex ways inefficiencies in urban structure are resistant to simple policy interventions

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

conceptual framework for regional competitiveness budd l and hirmis a k 2004 conceptual framework for regional competitiveness regional studies38 1007 1020 the concept of territorial competitiveness has gained ground in academic policy and practitioner circles in particular urban competitiveness has generated a large literature however there is a danger that competitiveness at a territorial level becomes a conceptual chimera the essential problem is that territorially based actors and agencies seek to position and maintain the utility of their regions and subregions by reference to a set of measures and indicators that are conceptually suspect and often empirically weak the degree to which regions compete depends on a manifold set of factors the paper proposes a conceptual framework for regional competitiveness based on combining the competitive advantage of firms and the comparative advantage of a regional economy the conceptual transmission mechanism to regional competitiveness combines liebenstein s theory of x inefficiency and aggl

asymmetries in ordered strength of preference models implications of focus shift for discrete choice preference estimation this paper explores potential focus shift asymmetries in an ordered strength of preference model applied to contingent choice data a focus shift occurs when respondents weight factors differently when assessing preference for an accepted scenario than they do when assessing preference for a rejected scenario and may imply that respondents do not refer to a single underlying preference function using data drawn from a survey which addressed preferences for watershed management the model results identified focus shift asymmetries in the ordered strength of preference model the paper discusses implications for policy survey design and discrete choice preference estimation

the interrelationships between births and deaths this paper provides a preliminary study of the way in which the births and deaths of firms interactover time it uses the retailing sector as a case study although the results also have relevance for other sectors section i of the paper introduces the background to the paper section ii provides a non mathematical theoretical framework for analysing the births deaths interrelationship it identifies three separate types of effect operative in these interrelationships the competition multiplier and marshall life cycle effects the data used in this study value added tax registrations and deregistrations and their limitations are considered in section iii section iv presents the preliminary empirical results this section utilises panel data vector autoregression techniques to identify the salient birth death relationships the final section concludes the paper and draws out possible policy conclusions it also suggests avenues for further work

a comparison of contingent preference models i compare the informational efficiencies of contingent rating contingent ranking and two contingent paired comparison methods as alternatives to the referendum contingent valuation method the contingent rating method is hypothesized to be most efficient because ratings convey information on preference intensities and can uniquely represent respondent indifference or ambivalence survey data on hunters ratings of alternative hypothetical hunting trips are used to estimate four alternative indirect utility models from which marginal willingness to pay measures for individual trip attributes are derived model comparison wtp estimates and their confidence intervals confirm the relative efficiency of the contingent rating approach

a measure of income inequality in the u s for the years 1952 1980 based on the beta distribution of the second kind abstract this paper presents gini measures of inequality for the u s size distribution of total income for the years 1952 1980 a beta distribution of the second kind is used as the hypothetical statistical distribution to approximate actual empirical income data we then examine the fit of the distribution and conclude that the beta distribution provides a good approximation to the actual empirical income data

optimized quantity within distance models of spatial welfare heterogeneity abstract spatial welfare heterogeneity is frequently modeled within stated preference analysis as a function of discrete or continuous distance between households and affected resources a common example is distance decay analysis although distance based models such as these are easily estimated the ubiquity of this paradigm can lead to analyses that overlook other forms of analysis with equal or greater relevance this paper develops an alternative approach to spatial heterogeneity in stated preference willingness to pay wtp based on the quantity or area of an affected resource surrounding each respondent at an optimized distance band or radius with distance bands optimized using a grid search algorithm that maximizes model likelihood methods and results are illustrated using a choice experiment on riparian land restoration in maine usa the resulting quantity within distance model identifies systematic spatial patterns that are undetectable using distance based analysis and directly relevant for welfare analysis

stretching the concept of borrowed size borrowed size is an emerging policy concept in several european countries presenting theoretical potential to explain contemporary urban dynamics unaddressed through conventional urban growth theories that emphasise the role of agglomeration economies in its original conceptualisation by alonso the concept describes and explains the situation that especially smaller cities that are located in a larger megapolitan complex do perform better because they have access to agglomeration benefits of larger neighbouring cities this paper scrutinises the concept of borrowed size thereby focusing on its conceptualisation and reviewing its empirical justification thus far our empirical analyses show that the concept must be stretched in terms of scale and scope to enhance its policy value borrowed size occurs when a city possesses urban functions and or performance levels normally associated with larger cities this is enabled through interactions in networks of cities across multiple spatial scales these networks serve as a substitute for the benefits of agglomeration theoretically the borrowed size concept demands a recasting of the geographical foundations of agglomeration theory

the social welfare implications decomposability and geometry of the sen family of poverty indices in this paper we propose a unified framework for the sen indices of poverty intensity that shows an explicit connection between the indices and the common underlying social evaluation function we also identify the common multiplicative decomposition of the indices that allows simple and similar geometric interpretations and easy numerical computation jel classification c000 h000 o150 implications en termes de bien etre collectif decomposabilite et geometrie de la famille d indices de pauvretea la sen dans ce memoire les auteurs proposent un cadre d analyse integre des indices d intensite de pauvretea la sen qui souligne la relation explicite entre ces indices et la fonction sociale d evaluation commune qui les soustend les auteurs identifient aussi la decomposition multiplicative commune de ces indices qui permet d en donner des interpretations geometriques simples et idoines et de faire des calculs numeriques faciles

panterritorial versus regional pricing for maize in zimbabwe abstract this paper presents a spatial equilibrium model of zimbabwe s maize market designed to compare the current system of panterritorial prices with the pareto optimal pattern of regional price variation that would occur in a competitive market the model shows that under baseline 1988 conditions competitive pricing would raise aggregate welfare by about us 14 million annually about 4 of producer plus consumer surplus while improving income distribution by favoring the majority of smallholder farmers in southern deficit areas and urban consumers in northern surplus areas thus the model suggests that liberalization could improve both efficiency and equity administered regional prices in a controlled market could yield some of these gains to the extent that production and processing were brought closer to consumers

heterogeneous preferences and aggregation in environmental policy analysis a landfill siting case in many studies of nonmarket resources economists have data to disaggregate results according to subpopulations within the full study population disaggregated results can increase the usefulness of economic analyses improve public confidence in the results and permit public officials to assess equity concerns we outline an approach to obtain disaggregated results when characteristics of individuals may identify distinct preferences the approach is applied to public preferences regarding landfill siting decisions the discussion explores the implications of disaggregated results for policy decisions for bias in aggregate willingness to pay estimates and for nonmarket research methodologies

poverty and income distribution during adjustment issues and evidence from the oecd project drawing lessons from country studies the authors examine the effects of adjustment policies on the distribution of income in chile cote d ivoire ecuador indonesia malaysia and morocco after analyzing the issues that must be confronted in designing adjustment programs with a focus on poverty they synthesize the main conclusions of the different country studies with simulation exercises they explore the effects of the design of the adjustment packages on poverty and on the sustainability of the measures undertaken in these countries these exercises show considerable diversity in the evolution of income distribution during adjustment they also expose the fatal flaws of narrowly designed adjustment programs adjustment programs whether focused on efficiency or on welfare will fail when they do not recognize the interdependence of the three criteria of efficiency welfare and political feasibility adjustment programs must be carefully packaged to fit country circumstances taking into account both the political and economic environments

financial hierarchy and banking strategies a regional analysis for the brazilian case the aim of this paper is to investigate whether brazil s financial system has a differentiated strategy in space the analysis is based on the theory of liquidity preference regionally differentiated in addition it assumes that the banking strategies are associated with centrality as defined in christaller s central place theory the analysis used indicators of 2 924 cities grouped according to the type of financial services they provide in addition the paper presents an estimation using a dynamic panel data econometric model for the period 2000 08 in order to test if the banking strategies are related to the centrality of the cities

how relevant are specifications of behavioral relations on the micro level for modelling the time path of population aggregates abstract this paper shows that the specification of behavioural relations at the individual level does not play a dominant role in determining the sort of relation among aggregates discussed more important are certain invariant features of the distribution of household characteristics and attributes these invariants allow one to derive an aggregate consumption relation it is shown that some of the coefficients of a first order approximation of that relation describing the effect of changing income dispersion the effect of the growth of mean income and the effect of changes in the distribution of household attributes can be estimated from cross section data without any need to specify a model of micro behaviour

tests of intraurban central place theories for many years economists have been interested in the reasons for the clustering of firms within cities early attempts to address this question seemed to focus primarily on the supply side of the market and revolved around the concept of agglomeration economies see richardson i 978 pp 4i 2 more recently economists have sought an explanation for clustering of firms by addressing the demand side of the market most of this attention has been directed towards showing how search behaviour on the part of consumers can lead firms selling similar products to cluster see stahl i982a b stuart i979 and eaton and lipsey ig79b while these comparison shopping models take us part of the way towards understanding the spatial distribution of retailing they cannot explain why firms selling non substitutes also cluster together in shopping centres and why shopping centres come in different sizes the classic model that was designed to explain these observations was the one proposed by christaller 1 966 he obtained a hierarchy of shopping centres or central places in his terminology wherein firms selling different goods locate together his model inspired much empirical research into interurban and intraurban retail structures despite the fact that his model lacked a firm microeconomic foundation an attempt to remedy some of the behavioural deficiencies of the christaller model has recently been made by eaton and lipsey i982 they wanted to show that a hierarchy of shopping centres could be derived from a model that allowed for multipurpose shopping on the part of consumers and profit maximising locational choice on the part of firms the hierarchy that they derive has some characteristics in common with christaller s and some that are different and their model also yields testable predictions and insights that christaller s model cannot supply because of its weak behavioural base in this paper we wish to test the empirical implications of both the eaton and lipsey model and christaller model using sequential shopping centre data from edmonton alberta in the next section we conduct a brief tour through the eaton and lipsey and christaller theories of central places and argue that it is the existence of demand externalities in the eaton and lipsey theory that enhances its predictive power over that of christaller s in section ii we discuss how shopping centres are defined in this study and how our shopping centre data are classified tests for a hierarchy of shopping centres are conducted in section iii in the next two sections we examine predictions that are made by the eaton and lipsey

central place theory and city size distribution this paper proposes a theory of city size distribution via a hierarchy approach rather than the popular random growth process it does so by formalizing central place theory using an equilibrium entry model and specifying the conditions under which city size distribution follows a power law central place theory describes the way in which a hierarchical city system with difierent layers of cities serving difierently sized market areas is formed from a uniformly populated space the force driving the city size difierences in this model is the heterogeneity in economies of scale across goods the city size distribution under a central place hierarchy exhibits a power law if the distribution of scale economies is regularly varying which is a general class that encompasses many well known commonly used distributions this model is also consistent with a power law for flrms and a number average size rule which is the log linear relationship between the number and average size of the cities in which an industry is located

poverty and inequality under income and price dispersions many policies simultaneously affect the distribution of prices and incomes in the economy moreover a bias may occur when there is a stochastic relationship between prices and incomes and this relationship is being ignored it is therefore important to dispose of an analytical framework for welfare analysis that could account for changes in this joint distribution how can the joint influences of price and income distributions on poverty and inequality indicators be analysed we offer a method to deal with this problem by using parametric formulae of poverty and inequality measures we propose statistical indicators for the levels variabilities and a statistical link of price indices and nominal living standards these indicators are consistent with an approximation of the problem based on a bivariate lognormal distribution of price indices and nominal living standards our analysis provides hints about the social welfare impact of economic shocks or policies affecting levels variabilities and correlation of prices and incomes intuitive insights are obtained while using arithmetic means and variances instead does not lead to illuminating results the role of price and income variabilities for poverty and inequality is more complex than generally expected with the possibility of several variation regimes empirical investigation of these statistics would guide social policies

revisiting the sen poverty index a modification of the official sen poverty index yields an index which is not only continous in individual incomes and consistent with the transfer axiom but also admits a geometric interpretation in terms of the area beneath a graph called the inverse generalized lorenz curve for normalized poverty gaps by jenkins and lambert 1993 or the poverty gap profile by shorrocks 1994

on the economic foundation of the urban network paradigm spatial integration functional integration and economic complementarities within the dutch randstad conceptually the degrees of spatial and functional integration and urban complementarities in economic network relations are hypothesised to be important in this paper data on interfirm relations in the dutch randstad are used to test conditions for integration and the existence of economic complementarities a clear hierarchy is observed in the different types of spatial interdependencies in the randstad in which the central place model prevails furthermore no evidence is found for the functional integration of municipalities in the randstad it is concluded that at this moment the randstad does not function as a spatially and functionally integrated region and that spatial economic policy can better focus on smaller regions within the randstad this also calls into question the applicability of the urban network concept in general as the dutch randstad is usually seen as a prime example of an economically successful polycentric urban system

separating urban agglomeration economies in consumption and production abstract in this paper we estimate the net agglomeration economies on the consumption side as well as the production side using japanese city based data from 1992 when interregional net migration nearly ceased we show that doubling city size increases the nominal wage by approximately 10 but decreases the real wage by approximately 7 12 the 10 increase of the nominal wage is attributed to the productivity increase in production activities while the 7 12 decrease of the real wage is a compensation for the net agglomeration economies which are the benefits from product variety minus the costs of congestion in other words city bigness not only enhances the productivity of firms but also brings net agglomeration economies to households in this way we separate the net agglomeration economies on the production side from those on the consumption side

multiproduct technology and market structure a recent line of research has exposed some technological determinants of the structure of industries that produce more than one good the analyses of both multiproduct perfect competition and natural monopoly require a generalized notion of average cost and in addition several newly identified technological characteristics pertinent only to joint production this paper provides an overview of these new results and suggests a unifying framework in which the theory can be further developed

financial services and the urban system an exploration financial services have come to represent an increasingly important sector in the economies of developed nations although a substantial literature has accumulated on this topic relatively little attention has been given to the locational aspects of nancial services an attempt is made here to examine the spatial structure of this sector in terms of the urban system drawing on the principles of central place theory the limitations and applicability of which are considered this is followed by a discussion of the salient features of financial services within the overall urban system after describing the differentiation of financial services in frequency terms the hierarchical structure of the uk urban system is outlined these two aspects are then related in order to demonstrate the ordered nature of the spatial structure of financial services there follows a brief discussion of the findings and their implications for future work

spatial integration transport costs and the response of local prices to policy changes in ghana abstract this paper investigates the respective roles of spatial integration and transport costs in explaining price changes in ghana we introduce a model of price formation and market integration that incorporates the price transmission process between local and central markets and also captures the implications for volatility of local prices we explore the implications of the model for the time path of price adjustments as determined directly and indirectly through the marketing sector we show that the price adjustment process in a local market is determined by the degree of interdependence between that market and the central market in which a price shock originates and estimate the intertemporal and interspatial dynamics of the price adjustment process using data from wholesale maize markets in ghana we find that reductions in local prices and local price variance following the introduction of economic reforms in 1983 can be traced to both local and central market forces but that differences in the degree of market integration have important implications for long run changes in transport costs and the evolution of prices in outlying markets

an investigation of the rationality of consumer valuations of multiple health risks after developing a conceptual analysis of consumer valuation of multiple risks we explore both economic and cognitive hypotheses regarding individual risk taking using a sample of over 1 500 consumers our study ascertains risk dollar tradeoffs for the risks associated with using an insecticide and a toilet bowl cleaner we observe the expected positive valuation of risk reductions and find empirical support for a diminishing in the valuation of risk reduction as the extent of the risk reduction increases we also find evidence of certainty premiums for the total elimination of one risk but no strong evidence of additional certainty premiums for the elimination of multiple risks strong reference risk effects are evident as increases in risk were valued much more greatly than were decreases

an economic theory of central places is not really a theory of spatial economic behaviour instead it is a series of brilliant conjectures about the locational configurations that will result from such behaviour the brilliance of these conjectures is illustrated by the successful applications of the theory to such diverse phenomena as the locational patterns of retailing activity in cities and of service centres in rural areas the size distribution of cities and the diffusion of information and diseases in this paper we outline an economic model of central places 2 our theorising has two distinct purposes first we wish to begin the development of a theory of central places that is based on maximising behaviour of economic agents any theory of economic behaviour from which central places can be derived is necessarily both difficult and cumbersome non convexities in the activities of buying and selling drive the model and thus non differentiabilities and discontinuities abound as one seeks more generality in such circumstances difficulties multiply rapidly in order to begin the job we have used assumptions that are specific and sometimes even crude the second purpose of our theorising is to illustrate the limitations of current central place theory by providing counter examples to some propositions commonly accepted to follow from it for this purpose we need not worry about lack of generality in any of our counter examples of course we are not solely concerned to refute accepted generalisations by doing so we hope to make alternative possibilities apparent what we hope to attain therefore is a theoretical development inspired by the extremely fruitful conjectures of existing central place theory

the dark side of ny lon financial centres and the global financial crisis this paper brings financial centres into the debate on the causes and consequences of the global financial crisis by focusing on new york and london it argues that the degree of commonality comp

spatial price and variety competition in an urban retail market abstract we develop a nested logit model of spatial competition in retail markets consumers choose stores on the basis of price variety and transport cost three games are considered a price game a variety game and a combined price and variety game the videocassette rental market in edmonton alberta is used for illustration centrally located stores set lower prices and higher varieties than stores on the market periphery prices in the price and price variety games are nearly identical despite large differences in varieties similarly equilibrium varieties in the price variety game are similar to varieties in the variety game

decision making when choices are complex a test of heiner s hypothesis this paper explores heiner s hypothesis concerning a gap between the cognitive ability of decision makers and the difficulty of decisions the c d gap we discuss the implications of decision heuristics for coefficient estimates when uncertainty is faced by decision makers where the level of uncertainty varies with complexity statistical analysis strongly supports the presence of a c d gap and provides evidence supporting the use of decision heuristics the results of both direct and indirect methods suggest that mixed decision strategies may be used we also find that complexity effects can have important implications for welfare analysis

stated preferences of tourists for eco efficient destination planning options abstract eco efficiency is a concept that prescribes reducing the amount of energy and natural resources used as well as wastes and pollutants discharged in the production of goods and services numerous approaches to achieving greater levels of eco efficiency have been suggested for tourism operations and destinations however none of these options have been examined with respect to tourist responses to them this paper uses a discrete choice experiment to examine visitor preferences for a set of hypothetical tourism destination eco efficiency strategies visitors preferred eco efficient planning options to business as usual scenarios the degree of support for the various planning options differed by market segments overall tourist support existed for many options that could increase the overall eco efficiency of destinations visitors were also willing to tolerate additional fees for services that might help to offset the environmental impacts of their behaviours by having respondents evaluate and trade off several resort eco efficiency strategies simultaneously the discrete choice experiment provided a more comprehensive and realistic assessment of eco efficiency options than would be possible using traditional survey methods

strength of preference indicators and an ordered response model for ordinarily dichotomous discrete choice data abstract recent environmental regulations raise the importance of accurate survey based methods to estimate environmental values while interviewing costs stimulate research to improve dichotomous choice survey methods this paper proposes using strength of preference indicators along with dichotomous contingent response data we model strength of preference indicators as quasi cardinal measures using an ordered response model we find that strength of preference indicators provide substantial efficiency gains while increasing respondents effort minimally with evidence that interpersonal comparison of preference ratings induces no bias the ordered response model of utility and willingness to pay is superior even in predicting the binary choice results

innovative entry profit hidden beneath the zero the traditional models of free entry zero profit monopolistic competition equilibrium do not of course exclude the possibility that positive profits might still be made by intra marginal firms if the market is non uniform or that collusive actions plus barriers to further entry can almost always be used to convert a zero profit non cooperative equilibrium into a structure which is profitable for all existing firms this paper is concerned with situations giving rise to a local nash equilibrium no firm can improve by a marginal move which are zero profit across all firms but yet in which it is possible for a new firm to enter and make profits at least in the short run without collusive action entry in such situations will be referred to as innovative entry since it involves potential entrants looking behind the zero profit situation actually existing to a possible different structure in which profits are possible or in which a larger number of firms can be accommodated without losses this can be contrasted with passive entry in which firms simply enter industries where actual profits are positive and do not enter those in which actual profits are nonpositive we shall restrict ourselves to discussion of uniform cases in which all firms make identical profits at equilibrium so as to avoid any difficulty associated with the term zero profit the general context will be that of monopolistic competition in which product differentiation takes place by variation in the specifications combinations of characteristics of the goods produced the potential variations are considered as points in a space of characteristics with dimensionality determined by the number of characteristics actually relevant to consumer choice among the products the market structure arising within this context when there is free entry no collusive behavior frictionless change and complete information has been termed perfect monopolistic competition by the author and discussed fully at least for the case of two characteristics in lancaster 5 within this structure it will be shown that innovative entry is possible even when there is passive entry equilibrium because actual profits of all firms are zero in at least two cases

spatial structure and labour productivity evidence from prefectures in china this paper examines the effect of spatial structure as measured on the monocentricity polycentricity dimension on labour productivity at the prefectural level in china using pooled cross section

exchange rate fiscal and agricultural policies in africa does adjustment hurt the poor abstract trade exchange rate fiscal and agricultural sector policy reforms are the pillars of structural adjustment programs in africa results indicate that trade and exchange rate reforms are associated with a large decline in economic rents and a shift in relative prices that favor the rural and urban poor fiscal reforms have not brought about draconian belt tightening measures although the incidence of public spending particularly in the social sectors and in terms of public sector employment remains far from progressive reduction of export crop taxation contributes to higher incomes for the poor and domestic food crop liberalization has not led to increases in purchase prices of staple commodities for most low income households

agricultural marketing and pricing reform a review of experience abstract south africa like many other countries has in the past pursued a highly interventionist policy in agricultural marketing and pricing but has recently embarked on a process of at least partial liberalization the paper reviews the reasons for nature of and impact of marketing reform in sub saharan africa and elsewhere it concludes that the results of reform have in general been positive although implementation has been more difficult and time consuming than originally expected in part because of interest group politics and in part because of its inherent complexity the paper highlights some issues of particular relevance to south africa s current political and economic transition

mergers brand competition and the price of a pint abstract mergers in the uk brewing industry have reduced the number of national brewers from six to four the number of brands in contrast has remained relatively constant we analyze the effects of mergers on brand competition and pricing brand level demand equations are estimated from a panel of draft beers to model brand substitution possibilities we estimate the matrix of cross price elasticities semiparametrically our structural model is used to assess the strength of brand competition along various dimensions and to evaluate the mergers in particular we compute equilibria of pricing games with different numbers of players

economic reform and food prices evidence from markets in ghana abstract this paper investigates trends in food prices in ghana during 1970 1993 regression results confirm that real wholesale prices of food have been declining since the 1970s price trends in the 1980s are characterized by a downward shift at the beginning of the postreform period and a subsequent continuing downward trend despite falling grain prices we find that agricultural wage rates failed to provide an adequate basis for subsistence particularly during periods of large seasonal price rises many farmers hold grain for both speculation and to smooth income this view is supported by evidence regarding seasonal price spreads that have been increasing since 1984 we find no support however for conclusions of trader manipulation of marketing margins during the adjustment period

strategic entry deterrence in analyzing deterrence of large scale entry two classes of entry barriers may be distinguished an innocent entry barrier is unintentionally erected as a side effect of innocent profit maximization in contrast a strategic entry barrier is purposely erected to reduce the possibility of entry two types of innocent barriers may also be distinguished a postentry absolute advantage has the property that if entry did occur the established firm would be at a profit advantage over the entrant examples are superior technology or product design patents and lower input prices a preentry asymmetry advantage arises from the fundamental preentry asymmetry between established firm and potential entrant before the entrant makes his entry decision the established firm has already committed resources this prior existence gives first move advantages the preentry asymmetry is independent of symmetry or asymmetry in the rules the equilibrium concept of the postentry game that might ensue even if the postentry game will be played according to nash cournot or entrant as leader rules the preentry leadership

product portfolios and the introduction of new products an example from the insecticide industry this article explores how the introduction of new products by multiproduct firms might be affected by existing goods in each firm s portfolio a logit analysis is conducted to estimate the effects of local monopoly power cost advantages and learning characteristics theory is used to determine whether the addition of a new product by a firm s existing portfolio creates the potential for local monopoly power while the chemical similarity of products has the largest effect results nonetheless indicate the empirical significance of potential monopoly power in influencing product introductions by multiproduct firms

spatial retail markets with commuting consumers in this paper we analyse a model of spatial competition with commuting consumers due to claycombe 1991 international journal of industrial organization 9 303313 we show that results different from claycombe s are obtained if a rigorous game theoretic analysis is applied to the model our results provide a theoretical basis for a later study carried out by claycombe and mahan 1993 international journal of industrial organization 11 283 291 and lead to predictions which are in line with the empirical results of that later study for small commuting distances relative to the distance between firms there exists a symmetric equilibrium in which the price is continuous and decreasing in both the commuting distance and the proportion of commuting consumers for intermediate distances however a symmetric price equilibrium in pure strategies in general does not exist only if all consumers commute and the commuting distance is large perfect competition prevails

profit maximizing vs optimal behavior in a spatial setting summary and extensions there exists a rapidly growing body of literature concerning the behavior of firms in a spatial setting to a large extent this work has involved discovering the relationships among monopoly competitive and optimal welfare maximizing behavior in the present paper several aspects of these relationships are discussed the first section presents the underlying assumptions the second summarizes the comparisons that have been made between optimal behavior and various types of profitmaximizing behavior in addition the welfare effect of allowing spatial competitors to earn positive profits is discussed the third section of the paper turns from optimality to efficiency here the efficiency of profit maximizing behavior in a spatial setting is evaluated the last section turns to the question of defining social welfare the effect of the type of welfare function on the distribution of welfare among individuals is examined

the economics of product variety a survey demand for variety may arise from a taste for diversity in individual consumption and or from diversity in tastes even when each consumer chooses a single variant the full degree of variety potentially demanded will not in general be supplied because scale economies even to a small degree mean that the potential welfare or revenue gain from greater variety must be balanced against the lower unit production costs with fewer variants the economics of product variety consists essentially in analysing the effect of this balance in different situations and comparing the degree of product variety for different market structures with each other and with the optimum the survey commences with the work on market structures with single product firms generalized monopolistic competition tracing modern developments in both the chamberlinian and hotelling traditions the latter has been particularly fruitful due to the expansion of the original locational ideas into virtual spaces in product characteristics the emphasis in recent work on product variety has been on multiproduct firms in both monopolistic and oligopolistic structures including strategic market preemption although most work has been in a full information context there have been advances in product variety under imperfect information either by consumers to properties of the firms products or firms as to consumers demands

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

the donald robertson memorial prizewinner 2003 the nature of the neighbourhood this paper considers the order that emerges in cities as individuals exchange and pool rights over resources in pursuit of individual and mutual gain in his 1937 article the nature of the firm ronald coase explained the existence and size of firms in terms of transaction costs neighbourhoods are important units of consumption and production and can like firms be explained by transaction costs a theory of the neighbourhood is developed based on transaction costs property rights and related ideas from the new institutional economics a neighbourhood is defined as a nexus of contracts and four rules that govern neighbourhood evolution are specified normative aspects of the theory are illustrated by examining the organisational order in neighbourhoods in particular the pattern of residual claimants in the contracts that underpin neighbourhood dynamics

why do all the flights leave at 8 am competition and departure time differentiation in airline markets abstract theoretical models of spatial product differentiation indicate that firms face two opposing incentives 1 minimize differentiation in order to steal customers from competitors and 2 maximize differentiation in order to reduce price competition using data on u s airline departure times from 1975 when fares were regulated and 1986 when fares were not regulated we empirically estimate the effect of competition on differentiation we find a negative relationship in both periods in 1986 however reductions in exogenous scheduling constraints increase differentiation implying that firms may be differentiating their products where possible to reduce price competition this effect is not apparent in the 1975 data

clustering of economic activities in polycentric urban regions the case of the randstad local contexts are becoming more important as the impact of the process of globalisation on the spatial distribution of economic activities seems to generate not so much processes of homogenisation as of heterogenisation between regions in advanced economies the combination of specialisation and spatial concentration of economic activity in advanced economies has attracted much attention from economists and geographers here we explore at what level of spatial aggregation contemporary tendencies of clustering of economic activities articulate themselves within the archetypal polycentric urban region of the dutch randstad to examine this question we look at profiles of business start ups in the individual cities of the randstad our focus is on business start ups as they respond most directly to the changes taking place in the economic environment and especially those regarding the supply of labour our findings point to the direction of cluster formation at a supraurban level the profiles of business

conjectural variations and location theory abstract imperfectly competitive markets such as those involving spatial separation of producers and consumers are characterized by interactions between competing firms actions call forth reactions and the possible reactions form an important part of the information set that should be used to determine the initial actions one method for dealing with this is the conjectoral variation approach despite some shortcomings this methodology sheds considerable light on decision making in the space economy equally importantly it sheds light on more general microeconomies modelled as spatial analogs this paper shows that conjectural variations and the nature of competition between rival firms do indeed matter in location choice and more generally in product design in particular we shall be concerned with showing how the conjectured responses of rival firms affect their desire to agglomerate

the city network paradigm measuring urban network externalities in recent years network behaviour has been analysed extensively as the emerging model for economic growth by network behaviour a metaphor for co operative behaviour among individuals corporate

urban rural cost of living differentials in a developing economy abstract casual observations suggest that the cost of living is substantially greater in urban than rural areas of developing economies with implications for sectoral welfare comparisons an aids demand model for housing and foodgrains is estimated on a household level data set for java after adjusting housing rents for heterogeneity in quality the retrieved cost function indicates that the cost of utility at the urban price vector exceeds its rural value although the differential has been substantially overestimated in the past the relative cost of urban living is found to increase as reference rural income increases

food subsidies and poverty alleviation this paper formulates the problem of the optimal pattern of food subsidies in a general setting where the objective is to minimize a class of poverty indices within the framework of the mo dern public finance theory taking explicit account of the budget con straint and preferences and technologies the authors derive rules fo r retargetting food subsidies to reduce poverty many operational rul es of thumb appear as special cases of the general results the analy sis thus provides not only the microfoundations of these operational rules but also their appropriate generalizations when the conditions under which they arise are not fulfilled copyright 1988 by royal economic society

an axiomatic characterization of the watts poverty index abstract although the first distribution sensitive decomposable poverty index the watts index has long been neglected by the profession even when it was searching for a decomposable index this neglect is due partly to the lack of an axiomatic characterization for the watts index this paper adopts an axiomatic approach and complements the watts index with such a characterization under a set of reasonable axioms the watts index is the unique index if a poverty index is perceived as the absolute amount of social welfare loss due to poverty the watts index is relatively easy to apply it also satisfies all basic axioms for a good poverty index

fragmented duopoly theory and applications to backward agriculture abstract the central aim of this paper is to provide a formal description of the idea of market fragmentation which is so widely used to describe markets in backward agriculture we begin by describing a fragmented duopoly in which each seller has a captive set of customers and there is a non captive set who may buy from either seller the nash cournot equilibria of the system are analyzed and then the model is generalized to allow for the endogenous determination of the captive sets the subgame perfect equilibrium of the model provides a useful background for studying familiar topics like fragmentation interlinkage and disguised unemployment from a new point of view

spatial price competition a semiparametric approach we investigate the nature of price competition among firms that produce differentiated products and compete in markets that are limited in extent we propose an instrumental variables series estimator for the matrix of cross price response coefficients demonstrate that our estimator is consistent and derive its asymptotic distribution our semiparametric approach allows us to discriminate among models of global competition in which all products compete with all others and local competition in which products compete only with their neighbors we apply our semiparametric estimator to data from u s wholesale gasoline markets and find that in this market competition is highly localized

the substitution bias of the laspeyres price index an analysis using estimated cost of living indexes the most commonly used measure of the cost of living the consumer price index cpi published by the bureau of labor statistics is essentially a laspeyres price index it is well known however that a laspeyres price index provides an upward biased estimate of the cost of living because in keeping the same base period basket of goods as weights it does not take into account substitution among commodities induced by relative price changes the magnitude of the bias is an empirical question which is the focus of this study an estimate of the substitution bias may be obtained by taking the difference between the laspeyres price index and an estimated true cost of living index the true cost of living index cli is based on the theory of consumer demand it is the ratio of the minimum expenditures under two different price regimes necessary to maintain a constant level of utility as opposed to the constant basket of goods in the laspeyres index the size of the bias depends on two factors 1 the size of consumption substitution elasticities if there is no commodity substitution then the cli and laspeyres index coincide regardless of changes in relative prices and 2 the magnitude of relative price changes if all prices move together then the cli and laspeyres index again coincide regardless of the size of substitution elasticities in order to compute a true cli it is necessary to specify a particular utility function and estimate the parameters of the resulting system of demand equations see for example louis phlips p 135 several estimates of the magnitude of the substitution bias have appeared in the literature but all previous studies suffer from a common weakness they are all based on a very small number of commodities essentially because of econometric problems involved in estimating large systems of demand equations in one group of studies demand models have been estimated using highly aggregated data in which total consumption is grouped into four to nine aggregate commodites such as housing durables or clothing arthur goldberger and theodore gamaletsos for example estimate the linear expenditure system les demand model using data on five aggregate goods for several european countries and compare the resulting cli for one of the countries greece to the corresponding laspeyres price index tran van hoa estimates costof living indexes for six australian provinces using data on nine aggregate goods phlips cites work by r sanz ferrer who computed a cli for belgium from data on eight aggregate commodities in such studies using highly aggregated data the estimate of the substitution bias may be understated because the aggregation obscures substitution in consumption within categories which is perhaps more prevalent than substitution between gross aggregates another shortcoming of these three aggregate studies is the fact that they use only a single demand system and hence do not explore the sensitivity of the cli to a priori u s bureau of labor statistics the groundwork for this study was my dissertation i would like to thank the chairman and members of my committee r robert russell llad phillips and robert deacon for their support and helpful suggestions and jack triplett robert pollak richard j mcdonald and a referee for valuable comments on an earlier version the views expressed are my own and do not necessarily reflect the policies of the bureau of labor statistics for a theoretical discussion of cost of living indexes see robert pollak 1971b and paul samuelson and subramanian swamy

structural adjustment and the welfare of rural smallholders a comparative analysis from sub saharan africa the direction and level of changes in real incomes brought about by structural adjustment are determined by a variety of factors including sources of income patterns of expenditures and movements in relative prices in the wake of adjustment an econometric model is used to derive an index of real income which is employed for data from cote d ivoire ghana malawi madagascar and tanzania no systematic changes in relative prices and especially in the ratio of tradable to nontradable prices were noted after the beginning of adjustment although the diversity of income sources implies that the implications of movements in relative prices on smallholder welfare are indeed complex the results indicate that there is no unequivocal pattern of increase or decline in the real welfare of the rural poor but that there are marked differences among countries and regions

regional spatial structure and retail amenities in the netherlands burger m j meijers e j and van oort f g regional spatial structure and retail amenities in the netherlands regional studies this paper examines how the presence of retail amenities in dutch regions is dependent on their spatial structure retail amenities in particular those specialized retail functions that require a large urban support base are less found in more polycentric and more dispersed regions this can be explained by the observation that in polycentric and dispersed regions the degree of market fragmentation is higher as a result of more intense regional competition and spacing between retail centres evidence is found for ways to overcome the lack of agglomeration benefits in more polycentric and more dispersed regions both concentration of retail and more complementarities between cities retail amenities may make up for the disadvantages of regions being polycentric or dispersed these findings provide a rationale to coordinate regionally specialized retailing in polycentric and

some notes on trichotomous choice discrete valuation for some respondents the bid offered by the dichotomous choice format used in the discrete choice technique can in fact be the true optimum in this case the correct answer is neither yes or no but indifferent we shall show results from a trichotomous choice format and analyse whether it produces welfare measures with narrower confidence intervals than the dichotomous technique another well known problem in contingent valuation cv studies is that the volume of the good to be purchased from hypothetical markets is not in many cases defined in precise terms we show how the trichotomous choice technique can be used to test for possible vagueness in the volume of the project to be valued

gaining ground poverty in the postwar united states official measures of poverty in the united states are compiled by the bureau of the census by comparing a household s income level to a prespecified threshold from a theoretical perspective it is more appropriate to evaluate the level of poverty using a consumption based measure of household welfare in this paper i evaluate the level of poverty using expenditure data from the consumer expenditure survey i find that consumption based poverty rates are much lower than those based on income the trend in the poverty rate in the united states is sensitive to the price index and equivalence scales used to adjust the poverty thresholds

prices and living standards evidence for rwanda abstract we review the explanations of the statistical relationship between spatial price indices and real living standards then using data from several seasons in rural rwanda we show that these variables are negatively associated hinting at price discrimination against the poor in that case policies permanently improving of market functioning may simultaneously improve efficiency and equity moreover under a hypothesis of weak association of nominal living standards and price indices we derive simplified formulae for social welfare indicators these formulae depend only on a small number of sample statistics obtainable from separate publications for prices and living standards

food pricing policy in developing countries further evidence on cereal producer prices recently two independent studies have produced contradicting evidence regarding the extent of price discrimination in developing countries the objective of this study is to reexamine the evidence of direct and indirect distortion in cereal producer prices nominal protection coefficients for wheat maize and rice are calculated for fifty one developing countries spanning the period 1980 86 black market exchange rates are used to adjust the nominal protection coefficients to reflect the indirect effect of price interventions through exchange rate policies the results confirm the conventional wisdom that although developing countries tend to protect domestic cereal producers taxation caused by overvaluation of official exchange rates exceeds any direct price protection offered domestic producers

towards an economic theory of the multiproduct firm this paper outlines a theory of the multiproduct firm important building blocks include excess capacity and its creation market imperfections and the peculiarities of organizational knowledge including its fungible and taut character a framework is adopted in which profit seeking firms are seen to diversify in order to avoid the high transactions costs associated with using various markets to trade the services of various specialized assets neoclassical explanations of the multiproduct firm are shown to be seriously deficient

estimating stated preferences with rated pair data environmental health and employment effects of energy programs abstract respondents stated preferences for attributes related to various electricity generation scenarios are analyzed using a series of pairwise ratings multiple observations for each respondent facilitate estimating individual scale parameters scale estimates can identify uninformative rating patterns and make it possible to delete such observations or adjust wtp calculations cross section time series analysis of the data indicates that nonprice attributes increase in salience during the course of the experiment thus later responses may be better indicators of preferences than earlier responses comparisons of polychotomous with dichotomous models indicate that most respondents relative preference ratings are not simply dichotomous but discriminate systematically along the rating scale