periodic review and continuous ordering abstract many inventory control studies consider either continuous review and continuous ordering or periodic review and periodic ordering mixtures of the two are hardly ever studied however the model with periodic review and continuous ordering is highly relevant in practice as information on the actual inventory level is not always up to date while making ordering decisions this paper will therefore treat this model assuming zero fixed ordering costs and allowing for a non negative lead time and a general demand process we first consider a one period decision problem without salvage cost for inventory remaining at the end of the period in this setting we derive a base line optimal order path described by a simple newsvendor solution with safety stocks increasing towards the end of a review period we then show that for the general multi period problem the optimal policy in a period is to first arrive at this path by not ordering until the excess buffer stock from the previous review period is depleted then follow the path by continuous ordering and stop ordering towards the end to limit excess stocks for the next review period an important managerial insight is that typically no order should be placed at a review moment although this may seem intuitive and is also the standard assumption in periodic review models we illustrate that adhering to the optimal ordering path instead can lead to cost reductions of 30 60 percent compared to pure periodic ordering

the effect of capital gains taxation on home sales evidence from the taxpayer relief act of 1997 the taxpayer relief act of 1997 tra97 significantly changed the tax treatment of housing capital gains in the united states before 1997 homeowners were subject to capital gains taxation when they sold their houses unless they purchased replacement homes of equal or greater value since 1997 homeowners can exclude capital gains of 500 000 or 250 000 for single filers when they sell their houses such dramatic changes provide a good opportunity to study the lock in effect of capital gains taxation on home sales using 1982 2008 transaction data on single family houses in 16 affluent towns within the boston metropolitan area i find that tra97 reversed the lock in effect of capital gains taxes on houses with low and moderate capital gains specifically the semiannual sales rate of houses with positive gains up to 500 000 increased by 0 40 0 62 percentage points after tra97 representing a 19 24 percent increase from the pre tra97 baseline sales rate in contrast i do not find tra97 to have a significant effect on houses with gains above 500 000 moreover the short term effect of tra97 is much larger than the long term effect suggesting that many previously locked in homeowners took advantage of the exclusions immediately after tra97 in addition i exploit the 2001 and 2003 legislative changes in the capital gains tax rate to estimate the tax elasticity of home sales during the post tra97 period the estimation results suggest that a 10 000 increase in capital gains taxes reduces the semiannual home sales rate by about 0 1 0 2 percentage points or 6 13 percent from the post tra97 average sales rate

a dynamic inventory model with periodic auditing consider a single item periodic review stationary inventory model with stochastic demands proportional ordering costs and convex holding and shortage costs where shortages are backordered and veinott s well known terminal condition holds orders can be scheduled for any period but the actual inventory level is determined every t periods through an audit this leads to a dynamic programming model where stage n contains periods n 1t 1 through nt for both discounted and averaging criteria a simple rule optimally describes the orders for the t periods of a stage as a function of the state beginning inventory level and the cumulative t period order the latter is optimally determined by a base stock policy with two base stock levels one for the final stage another for the rest the horizon may be finite or infinite methods are presented for computing optimal policies together with bounds on the costs of suboptimal myopic policies models with proportional costs and continuous demands are studied in detail computational experiments indicate that myopic policies perform quite well for such models the selection of a best review period t is covered briefly applications of our model include just in time settings where audit decisions play a negligible role

how much demand should be fulfilled we study the inventory replenishment of a product whose demand can be manipulated by restricting the supply this research is motivated by a novel marketing tactic employed by manufacturers of fashion and luxury items such a tactic combines innovative marketing with deliberate understocking in an attempt to create shortages i e waitlists that add to the allure and sense of exclusivity of a product and stimulate its demand we model the problem as a finite horizon periodic review system where demand in each period is a decreasing function of the net ending inventory in the previous period although the optimal structure can be complex in general under certain conditions we are able to characterize the optimal policy as a state dependent monotone base stock policy we compare this policy with the optimal policy for the case in which demand is independent of the net inventory we also show that understocking is optimal in various scenarios we then propose a novel strategy called the inventory withholding strategy to further explore the wait list effect by making customers wait even when there is inventory on hand to satisfy them our numerical experiments study the impact of various model parameters in combination with the wait list effect on the optimal policy and the corresponding expected profits

taxation and housing old questions new answers this paper sketches how the tax reforms of the 1980s affected the incentives and distortions associated with tax policy toward housing markets there are three principal conclusions 1 reductions in marginal tax rates particularly for high income households reduced the tax induced distortion in the user cost of owner occupied housing this lowered the deadweight losses associated with the favorable tax treatment of homeownership 2 the increase in the standard deduction in the tax reform act of 1986 tra86 removed several million middle income homeowners who previously itemized from the ranks of itemizers for these households tra86 raised the marginal cost of owner occupied housing these changes also exacerbated the regressive nature of the mortgage interest subsidy in 1988 more than half of the tax losses associated with mortgage interest deductions accrued to the 8 of taxpayers with the highest economic incomes 3 tra86 reduced incentives for rental housing investment contributing to the decline in new multifamily housing starts from 500 000 per year in 1985 to less than 150 000 in 1991 in the long run these policies will lead to higher rents this abstract was borrowed from another version of this item

does public insurance crowd out private insurance the cost of expanding public sector health programs depends critically on the extent to which public eligibility will cover just the uninsured or will crowd out existing private insurance coverage we estimate the extent of crowd out arising from the expansions of medicaid to pregnant women and children over the 1987 1992 period we estimate that approximately 50 percent of the increase in medicaid coverage was associated with a reduction in private insurance coverage this occurred largely because employees took up employer based insurance less frequently there is also some evidence that employers contributed less for insurance and that workers dropped coverage of dependents

the optimal frozen period in a dynamic production model abstract we consider a periodic auditing model for manufacturers in a supply chain who observe stochastic demand proportional holding expedited ordering costs and setup cost customer demand for a component can arrive in any period but the procurement quantities are determined every t periods which is defined as a frozen period the demand forecasts are updated every period as more information becomes available from the marketplace this paper studies a forecast order policy and compares it with the optimal order policy our objective is to determine the optimal length of a frozen period and the safety stock in a frozen period such that the expected total cost per unit of time is minimized

neighborhood externality risk and the homeownership status of properties in contrast to corporate and institutional investors single owner occupiers cannot adequately diversify housing investment risk consequently homeownership should be relatively less likely in places with higher housing investment risk using the american housing survey it is documented that neighborhood externality risk a major component of housing investment risk substantially reduces the probability that a housing unit is owner occupied even when controlling for housing type and numerous location and household specific characteristics the effects are quantitatively meaningful and change in change estimates suggest that the effects are causal

taming the bullwhip effect whilst watching customer service in a single supply chain echelon we study a generalised order up to policy that has highly desirable properties in terms of order and inventory variance and customer service levels it generates we quantify exactly the variance amplification in replenishment orders i e the bullwhip effect and the variance of inventory levels over time for i i d and the weakly stationary auto regressive ar moving average ma and auto regressive moving average arma demand processes we demonstrate that high customer service as measured by fill rate and smooth replenishments need not increase inventory cost substantially we observe that in some instances of the arma demand pattern this comes at the expense of a relatively small increase in safety stock whilst in other instances inventory levels can actually be reduced

the impact of transaction costs and the expected length of stay on homeownership abstract economic theory suggests that an increase in the expected length of stay in a dwelling increases the probability of a household choosing to own a house rather than rent this hypothesis is derived from recognition that there are substantial transaction costs associated with homeownership and increased expected time in the home reduces the annualized transaction cost using a military data set we confirm that expected length of stay in a dwelling and the transaction costs of selling are very important to the ownership decision our best estimate of the transaction costs of selling a home are the sum of 3 of house value and 4 of household earnings

inventory management for stochastic lead times with order crossovers we study the impact of stochastic lead times with order crossover on inventory costs and safety stocks in the order up to out policy to motivate our research we present global logistics data which violates the traditional assumption that lead time demand is normally distributed we also observe that order crossover is a common and important phenomenon in real supply chains we present a new method for determining the distribution of the number of open orders using this method we identify the distribution of inventory levels when orders and the work in process are correlated this correlation is present when demand is auto correlated demand forecasts are generated with non optimal methods or when certain ordering policies are present our method allows us to obtain exact safety stock requirements for the so called proportional order up to pout policy a popular implementable linear generalization of the out policy we highlight that the out replenishment policy is not cost optimal in global supply chains as we are able to demonstrate the pout policy always outperforms it under order cross over we show that unlike the constant lead time case minimum safety stocks and minimal inventory variance do not always lead to minimum costs under stochastic lead times with order crossover we also highlight an interesting side effect of minimizing inventory costs under stochastic lead times with order crossover with the pout policy an often significant reduction in the order variance

why do households without children support local public schools linking house price capitalization to school spending while residents receive similar benefits from many local government programs only about one third of all households have children in public schools we argue that capitalization of school spending into house prices can encourage even childless residents to support spending on schools we identify a proxy for the extent of capitalization the supply of land available for new development and show that towns in massachusetts with little undeveloped land have larger changes in house prices in response to a plausibly exogenous spending shock towns with little available land also spend more on schools we extend these results using data from school districts in 46 states showing that per pupil spending is positively related to the percentage of developed land this positive correlation persists only in districts where the median resident is a homeowner and is stronger in districts with more elderly residents who do not use school services and have a shorter expected duration in their home our findings support models in which capitalization encourages the provision of durable local public goods and provides an additional reason why some elderly support local school spending

inventory control under temporal demand heteroscedasticity abstract this paper studies an inventory control problem when the variance of demand is time varying and exhibits temporal heteroscedasticity we use a first order autoregressive process to characterize the dynamic changes in the level of demand over time and a garch 1 1 structure to describe the changes in the variance of demand under these demand settings we quantify the effect of a temporal heterogeneous variance on inventory performance for a system controlled via an order up to level policy we show that the effect of temporal heteroscedasticity on the forecasting accuracy can be additively decomposed from the total forecasting error variance the decomposition is used to derive the absolute and relative cost deviations when the temporal heteroscedasticity is ignored the relationship of these cost deviations to demand autocorrelation and replenishment leadtime is investigated computational results show that ignoring temporal heteroscedasticity can increase firm s inventory costs by as much as 30 when demand autocorrelation is highly positive

avoiding the bullwhip effect using damped trend forecasting and the order up to replenishment policy we study the damped trend forecasting method and its bullwhip generating behaviour when used within the order up to out replenishment policy using z transform transfer functions we determine complete stability criteria for the damped trend forecasting method we show that this forecasting mechanism is stable for a much larger proportion of the parametrical space than is generally acknowledged in the literature we provide a new proof to the known fact that the naive exponential smoothing and holts method forecasting when used inside the out policy will always generate bullwhip for every possible demand process for any lead time further we demonstrate the damped trend out system behaves differently sometimes it will generate bullwhip and sometimes it will not bullwhip avoidance occurs when demand is dominated by low frequency harmonics in some instances in other instances bullwhip avoidance happens when demand is dominated by high frequency harmonics we derive sufficient conditions for when bullwhip will definitely be generated and necessary conditions for when bullwhip may be avoided we verify our analytical findings with a numerical investigation

taxes and borrower behavior evidence from the mortgage interest deductibility limit abstract this paper estimates the behavioral response to mortgage interest tax deductibility by studying the discrete change in the net of tax marginal interest rate that occurs at 1 million in mortgage debt using data on 2004 2016 mortgage originations i estimate excess bunching in the loan distribution based on a counterfactual that accounts for bunching at salient loan amounts findings suggest excess of about 54 000 loans at the deductibility limit or 4 5 of the sample the level of bunching implies an average reduction in borrowing around the 1 million limit of 9 4 percent and mortgage demand elasticities between 0 132 to 0 115 for home purchase loans estimated elasticities imply that from 2004 2016 the mid induced 49 52 billion in deadweight loss in the mortgage market

comparison of two periodic review models for stochastic and price sensitive demand environment abstract in this paper we study two periodic review inventory models which primarily differ in terms of how backordering cost is charged time independent backordering tib model where the backordering cost is charged per unit backordered and is independent of the length of time for which backorders persist and the time dependent backordering tdb model where the backordering cost is charged based on the number of backorders as well as the length of time for which they are on the books i e it is charged per unit per unit time our objective is to investigate the impact of these two different backordering cost structures on the optimal decisions of a firm in a stochastic and price sensitive demand environment in order to do so we first develop a general framework where both such costs exist in a profit maximizing context subsequently we analyze two special cases of this general framework with either one of the costs that is tib and tdb models and derive some analytical results regarding the values and behavior of the optimal decisions for both of them we then concentrate on comparing the two models through extensive numerical experiments our investigation demonstrates that the tib model generally results in longer review periods and lower retail prices as far as the base stock level is concerned we show that it can be higher in either setting however the safety stock is considerably lower for the tib model lastly indeed if a firm s backordering cost is indeed time dependent then use of the tib model for making decisions results in significant profit penalty under most market operating conditions specifically for innovative products except when demand uncertainty and or the backordering cost are quite low i e for mature commodity products

the impact of forecasting methods on the bullwhip effect abstract this paper considers the impact of forecasting methods on the bullwhip effect for a simple replenishment system in which a first order autoregressive process describes the customer demand and an order up to inventory policy characterizes the replenishment decision a bullwhip effect measure is derived for the optimal forecasting procedure that minimizes the mean squared forecasting error for the specified demand process similar measures are obtained for the moving average and exponential smoothing methods the findings indicate that different forecasting methods lead to bullwhip effect measures with distinct properties in relation to lead time and underlying parameters of the demand process moreover a simple rule is established to help managers select a forecasting method that yields the lowest inventory cost

a unified theory of the dynamics of closed loop supply chains we investigate the dynamics of a closed loop supply chain with first order auto regressive ar 1 demand and return processes we assume these two processes are cross correlated the remanufacturing process is subject to a random triage yield remanufactured products are considered as goodas new and used to partially satisfy market demand newly manufactured products make up the remainder we derive the optimal linear policy in our closed loop supply chain setting to minimise the manufacturer s inventory costs we show that the lead time paradox can emerge in many cases in particular the auto and cross correlation parameters and variances of the error terms in the demand and the returns as well as the remanufacturing lead time all influence the existence of the lead time paradox finally we propose managerial recommendations for manufacturers

tax subsidies to owner occupied housing an asset market approach inflation reduces the effective cost of homeownership and raises the tax subsidy to owner occupation this paper presents an asset market model of the housing market and estimates how changes in the expected inflation rate affect the real price of houses and the equilibrium size of the housing capital stock simulation results suggest that the accelerating inflation of the 1970s which substantially reduced homeowners user costs could have accounted for as much as a 30 percent increase in real house prices persistent high inflation rates could lead ultimately to a sizable increase in the stock of owner occupied housing

developments in the throughput income relationship theoretical and empirical observations abstract it has been suggested that the relationship between income and the associated environmental pressure in terms of derived materials inputs and pollution levels may take an inverted u shape indicating a delinking of environmental pressure from economic growth in relation to rising per capita incomes the likelihood of such a relationship being persistent is discussed in the context of a simple macro model of industrial metabolism and the possibility of relinking clearly emerges data on specific indicators of environmental pressure i e the throughput of materials energy and the volume of transport in 19 countries have been used to investigate patterns of delinking the results suggest that delinking may not be persistent already some advanced economies may be entering a new period of relinking the relationships between environmental pressure and welfare in the medium long term may be n shaped rather than inverted u shaped

tax deductions tax credits and the homeownership rate of young urban adults in the united states the us president s advisory panel on federal tax reform has recommended changes to income tax concessions for homeowners consistent with the opinions of many economists the tax reform panel concl

homeownership community interactions and segregation the authors consider a multi community city where community quality is linked to residents civic efforts such as being proactive in preventing crime and ensuring the quality of publicly provided goods homeownership increases incentives for such efforts but credit market imperfections force the poor to rent within community externalities can lead to segregated cities with the rich living with the rich in healthy homeowner communities and the poor living with the poor in dysfunctional renter communities the pattern of tenure segregation across communities in the united states accords well with the study s prediction the authors analyze alternative tax subsidy policies to alleviate inefficiencies in the housing market and identify the winners and losers under such policies

turnpike policies for periodic review inventory model with emergency orders abstract this paper presents a periodic review capacitated lot sizing model with limited backlogging and a possibility of emergency orders the main intention of placing emergency orders is to satisfy the demand as soon as a shortage occurs it is assumed that the demands are independently distributed in successive periods there are two resupply modes available a regular mode and an emergency mode hence no lead time of emergence orders is assumed the purchase price could be high the measure of effectiveness is the total or average per period expected cost which includes holding cost shortage cost and both types of order costs the minimum cost is obtained by considering this system as a discrete time markov decision process we use this model to describe a simple and efficient value function algorithm for finding optimal policies we find propositions on specially structured optimal policies generalizing classical results on s s policies some connections of the turnpike policies and optimal infinite policies are presented computational results are given through numerical examples

optimal ordering policies for periodic review systems with replenishment cycles in this paper we consider inventory models for periodic review systems with replenishment cycles which consist of a number of periods by replenishment cycles we mean that an order is always placed at the beginning of a cycle we use dynamic programming to formulate both the backorder and lost sales models and propose to charge the holding and shortage costs based on the ending inventory of periods rather than only on the ending inventory of cycles since periods can be made any time units to suit the needs of an application this approach in fact computes the holding cost based on the average inventory of a cycle and the shortage cost in proportion to the duration of shortage for the backorder model and remedies the shortcomings of the heuristic or approximate treatment of such systems hadley and whitin analysis of inventory systems prentice hall englewood cliffs nj 1963 we show that a base stock policy is optimal for the backorder model while the optimal order quantity is a function of the on hand inventory for the lost sales model moreover for the backorder model we develop a simple expression for computing the optimal base stock level for the lost sales model we derive convergence conditions for obtaining the optimal operational parameters

some insights regarding the optimal reorder period in periodic review inventory systems abstract the periodic review inventory system is not only pervasive but also has an extensive literature dealing with various aspects from its theoretical underpinnings through to its performance however the selection of the best review period and its behaviour with respect to basic inventory parameters such as demand and supply variability appears to be poorly understood in this paper we treat the normal and gamma distributions which are probably the two most commonly used distributions of demand over the key protection time interval in a periodic review system we show that the total cost function is not necessarily well behaved as a function of the review period in particular it can be non convex which complicates the determination of the best value of the review interval also we demonstrate and explain how the best review period changes as the values of various parameters are modified some of these changes are initially counterintuitive in nature managerially oriented interpretations should also be helpful to organisations seeking improvement in inventory system performance

a periodic review model with serially correlated inventory level dependent demand abstract it has been established that the demand rates of many consumer products are serially correlated and are dependent on the amount of inventory displayed to the customer a periodic review model is developed that considers both of these effects an adaptive base stock policy based on the critical fractile is presented and a solution methodology is developed the effect of this demand pattern on the safety stock requirement is investigated

management of a periodic review inventory system using bayesian model averaging when new marketing efforts are made abstract many companies invest in various marketing efforts such as price promotion and advertising in order to attract new customers and build customer loyalty this paper examines the problem of setting efficient inventory levels when new marketing efforts are made and product demand is autocorrelated we assume that the inventory manager operates with a base stock policy based on a critical fractile if marketing has a temporary effect the underlying demand tends to revert to a long term equilibrium trend and the inventory manager needs to use a stationary demand model e g autoregressive model to determine the required inventory level in contrast if the effect is permanent demand shocks contain an element that represents a permanent departure from previous levels and a non stationary demand model e g random walk needs to be used instead we show that the required inventory behaves much differently for the case of using a stationary demand model as opposed to a non stationary model but it is difficult in practice to identify a correct demand model in the absence of a long sampling span in this paper we propose an inventory model that explicitly acknowledges uncertainty over stationary and non stationary demand models in response to new marketing efforts the proposed model averages the inventory policies of the two demand models weighted by each model s posterior probability this is an extension of bayesian model averaging simulation results demonstrate that the bayesian model averaging inventory model improves the inventory system

increased ecoefficiency and gross rebound effect evidence from usa and six european countries 1960 2002 despite increased efficiency in the use of natural resources the use of these resources continues to increase in most societies this paper examines the discrepancy between the potential decrease of use of natural resources as an effect of increased efficiency and actual use during the period 1960 2002 this difference was found to grow faster in the usa than the mean for six west european countries possible reasons for this difference between the two regions are analysed to reduce the anthropogenic flows of energy and material and the consequent deleterious effects on the biosphere it will become necessary to adapt consumption to degree of efficiency in the use of natural resources based on the comparison between the two regions some economic aspects of this issue are discussed

lost sales problems with stochastic lead times convexity results for base stock policies we consider a single location inventory system with periodic review and stochastic demand it places replenishment orders to raise the inventory position that is inventory on hand plus inventory in transit to exactly s at the beginning of every period the lead time associated with each of these orders is random however the lead time process is such that these orders do not cross demand that cannot be met with inventory available on hand is lost permanently we state and prove some sample path properties of lost sales inventory on hand at the end of a period and inventory position at the end of a period as functions of s the main result is the convexity of the expected discounted sum of holding and lost sales costs as a function of s this result justifies the use of common search procedures or linear programming methods to determine optimal base stock levels for inventory systems with lost sales and stochastic lead times it should be noted that the class of base stock policies is suboptimal for such systems and we are primarily interested in them because of their widespread use

the optimal review period in a dynamic inventory model consider a single item periodic review infinite horizon undiscounted inventory model with stochastic demands proportional holding and shortage costs and full backlogging orders can arrive in every period and the cost of receiving them is negligible as in a jit setting every t periods one observes the current stock level and orders deliveries for the next t periods thus incurring a fixed setup cost the goal is to find a review period t and an ordering policy that minimize the long run expected average cost per period flynn and garstka flynn j s garstka 1990 a dynamic inventory model with periodic auditing opns res 38 1089 1103 characterize an optimal ordering policy when t is fixed and study a myopic policy whose cost is often close to the optimal cost this paper covers the problem of selecting t we prove an optimal review period t exists characterize its properties and present methods for its computation we also study an approximation to t based on the myopic policy of ou

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

an ecological footprint approach to external debt relief abstract this paper applies martinez alier s environ values 2 1993 97 ecological debt concept to the problem of debt relief exploring the possibility of compensatory transfers from rich to poor countries based on existing ecological balances i employ recent estimates on ecological footprints and ecosystem values to estimate the ecological debt to be distributed among eligible transfer recipients all less developed countries ldcs the results provide a policy criterion for transfers in the event that future circumstances make large scale international debt relief compulsory the study probably underestimates the appropriate transfer amounts because of conservative assumptions regarding the environmental values and the size of the north s ecological debt in physical terms

an effective heuristic for the review period in an inventory model with staggered deliveries and normal demands abstract consider a single item periodic review infinite horizon undiscounted inventory model with stochastic demands proportional holding and shortage costs and full backlogging orders can arrive in every period and the cost of receiving them is negligible as in jit every t periods one audits the stocks and chooses a delivery schedule for each of the next t periods thus incurring a fixed audit cost and when one schedules actual deliveries a fixed order cost the problem is to find a review period t and an ordering policy minimizing the average cost an earlier article developed an algorithm for computing an optimal t and undertook a numerical study to evaluate various approximations assuming normal demands we characterize the asymptotic behavior for large of the optimal t and establish the asymptotic optimality of a heuristic calculable on a spreadsheet a numerical study indicates that patterns established here for large hold for above 2

new housing supply and the dilution of social capital this paper examines the role of local housing supply conditions for social capital investment using an instrumental variables approach and data from the social capital community benchmark survey it is documented that the positive link between homeownership and individual social capital investment is largely confined to more built up neighborhoods with more inelastic supply of new housing the empirical findings provide support for the proposition that in these localities house price capitalization provides additional incentives for homeowners to invest in social capital the findings are also largely consistent with the proposition that built up neighborhoods provide protection from inflows of newcomers that could upset a mutually beneficial equilibrium involving reciprocal cooperation however the results do not appear to be driven by selection based on inherent differences in social aptitudes or by tiebout sorting

forecasting daily supermarket sales using exponentially weighted quantile regression inventory control systems typically require the frequent updating of forecasts for many different products in addition to point predictions interval forecasts are needed to set appropriate levels of safety stock the series considered in this paper are characterised by high volatility and skewness which are both time varying these features motivate the consideration of forecasting methods that are robust with regard to distributional assumptions the widespread use of exponential smoothing for point forecasting in inventory control motivates the development of the approach for interval forecasting in this paper we construct interval forecasts from quantile predictions generated using exponentially weighted quantile regression the approach amounts to exponential smoothing of the cumulative distribution function and can be viewed as an extension of generalised exponential smoothing to quantile forecasting empirical results are encouraging with improvements over traditional methods being particularly apparent when the approach is used as the basis for robust point forecasting

valuation of mortgage interest deductibility under uncertainty an option pricing approach abstract we propose a dynamic option pricing model to quantify the tax shield value of us mortgage interest deduction mid under uncertainty we identify non linear forms both convex and concave regions in the pay off of mid and discuss the implications for the valuation of mid the model provides insights regarding the relationship between the effective mid and a set of underlying variables including income level house price mortgage size and state and local tax rates we also show how the tax shield value of mortgage loans changes with the volatility of underlying processes we apply the model to the case of the optimal choice of adjustable versus fixed rate mortgages and prove that under a mean preserving interest rate an adjustable mortgage always offers a bigger tax saving we use the framework to study how the tax reforms of 2017 have affected the mid benefits of different households and find that no household is expected to receive a larger mortgage deduction under the new law finally we find that by putting a cap on deductible state and local taxes the 2017 reform has significantly reduced the quantitative impact of income and house price volatility on the expected mid value

a periodic review replenishment model with a refined delivery scenario abstract this paper considers a single item replenishment problem where every n periods the buyer plans for the quantity delivered for each upcoming period assuming that demand not filled immediately is backlogged we suggest that the quantity delivered in the immediately upcoming period be of any size and the quantity delivered in each of the subsequent n 1 periods be equal to or smaller than a fixed quantity q we derive the average cost per n periods and compute the optimal order up to level for the proposed replenishment policy next assuming a fixed cost for reviewing inventory and planning deliveries we obtain the optimal n by minimizing the expected cost per period finally the optimal q can also be determined the proposed periodic review policy is easy to implement

on bullwhip in a family of order up to policies with arma 2 2 demand and arbitrary lead times a number of papers have recently appeared that investigate the bullwhip effect the variance amplification of ordering decisions in the supply chain produced by the order up to replenishment policy an adapted policy with a proportional inventory position feedback controller has shown improved bullwhip behaviour the dynamic behaviour of this so called proportional order up to policy has been investigated for arbitrary lead times and several demand models such as i i d demand and autoregressive moving average ar 1 and arma 1 1 models it has been shown that for a correct choice of the feedback parameter the bullwhip effect can always be avoided however less attractive properties of this policy have also become clear herein we investigate the behaviour of the proportional order up to policy for arma 2 2 demand with arbitrary lead times in order to compensate for possible weaknesses of the proportional out policy we propose another replenishment rule that accounts for the characteristics of the demand in a superior manner the characteristics of both policies are compared for several parameter settings of the arma 2 2 model finally the consequences of our full state feedback order up to policy are discussed

the mortgage interest deduction and its impact on homeownership decisions abstract this paper examines the impact of the combined u s state and federal mortgage interest deduction mid on homeownership attainment using data from 1984 to 2007 and exploiting variation in the subsidy arising from changes in the mid within and across states over time we test whether capitalization of the mid into house prices offsets the positive effect on homeownership we find that the mid boosts homeownership attainment only of higher income households in less tightly regulated housing markets in more restrictive places an adverse effect exists the mid is an ineffective policy to promote homeownership and improve social welfare

house price responses to a national property tax reform abstract we show that house prices in general did not respond to a substantial cut in the national property tax in sweden the estimates are based on rich register data covering more than 100 000 sales over a time period of two and a half years because the swedish property tax is national and thus unrelated to local public goods our setting is ideal for causal identification of the property tax on house prices we observe price increases only in a small segment of the market containing properties with very high tax values we discuss but can admittedly not empirically discriminate between several potential explanations for why we find no evidence of capitalization except for the top segment of the market

fill rate in a periodic review order up to policy under auto correlated normally distributed possibly negative demand we investigate the inventory service metric known as the fill rate the proportion of demand that is immediately fulfilled from inventory the task of finding analytical solutions for general cases is complicated by a range of factors including correlation in demand double counting of backlogs and proper treatment of negative demand in the literature two approximate approaches are often proposed our contribution is to present a new fill rate measure for normally distributed auto correlated and possibly negative demand we treat negative demand as returns our approach also accounts for accumulated backlogs the problem reduces to identifying the minimum of correlated normally distributed bivariate random variables there exists an exact solution but it has no closed form however the solution is amenable to numerical techniques and we present a custom microsoft excel function for practical use numerical investigations reveal that the new fill rate is more robust than previous measures existing fill rate measures are likely to cause excessive inventory investment especially when fill rate targets are modest a strongly positive or negative autocorrelation in demand is present or negative demands exist our fill rate calculation ensures that the target fill rate is achieved without excessive inventory investments

does investment risk affect the housing decisions of families i introduction the purpose of this article is to investigate the effect of heightened price volatility in housing markets on homeownership and housing demand the literature on housing markets has recognized that buying a home involves consumption and investment motives as in ranney 1981 henderson and ioannides 1983 and fu 1995 purchasing a home requires a concentrated investment in housing stock that for most families is not easily diversified caplin et al 1997 indeed in 1995 the typical american household had most of its gross assets in real estate and held no corporate equity and only households in the top 10 of the wealth distribution held portfolios that were diversified tracy et al 1999 in 1998 despite strong stock market gains home equity was a dominant investment for most households although roughly two thirds owned their homes less than half of all households held stock of those households owning both stocks and homes 60 had more wealth in home equity than in stocks di 2001 nominal house prices in u s cities have generally risen over time with some cities experiencing periods of steep house price appreciation however homeowners in many cities have been exposed to considerable downside risk according to repeat sales price indexes published by the federal home loan mortgage corporation freddie mac significant one year declines in home prices are not uncommon for example nominal declines of 15 5 and 9 occurred in san antonio in 1985 denver in 1987 and boston in 1990 respectively sustained house price declines have occurred in texas california and the eastern states for example in the long beach los angeles metropolitan area the nominal price of single family homes declined 22 from 1990 to 1996 1 furthermore there is evidence that losses at the time of sale are surprisingly common 2 what is not clearly understood is the extent to which families are responsive to such house price risk the investment literature has demonstrated that risk averse households prefer to hold less risk at a given expected rate of return when house prices are uncertain homeownership and demand relationships depend on the distribution of the random price variable 3 fu 1991 characterizes the price distribution by its first and second moments and shows that the likelihood of homeownersbip and the demand for owner occupied housing are increasing in the expected rate of house price appreciation and decreasing in house price volatility these results do not hold however for liquidity constrained households when households cannot borrow against the expected future gains of housing investment for current consumption the theoretical effects on housing choices of the expected rate of return and house price uncertainty are ambiguous fu 1995 thus the effect of price volatility on housing choices remains to be determined empirically the empirical research on housing markets includes a number of micro level econometric studies on the determinants of homeownership and housing demand these studies provide a framework for the present study and have shown that a household s after tax relative cost of homeownership permanent and transitory income and family composition are important in explaining housing decisions e g see rosen 1979 dynarski and sheffrin 1985 henderson and ioannides 1987 1989 in addition homeownership is negatively impacted by income uncertainty haurin 1991 and by an inability to generate savings for a down payment as in henderson and ioannides 1987 linneman and wachter 1989 haurin et al 1994 and gyourko et al 1999 nevertheless despite the importance of owner occupied housing in the portfolios of homeowners surprisingly little empirical work exists on the housing choices of families in the presence of house price uncertainty rosen et al 1984 provide some empirical evidence on the question of housing choices and risk

a general equilibrium model of housing taxes and portfolio choice we describe a model in which rental and owner housing are risky assets tenure choice is endogenous and each household is constrained to consume the same amount of owner housing that it has in its investment portfolio at each iteration in the search for an equilibrium we determine the new taxable income for each of 3 578 households from the survey of consumer finances and we use statutory schedules to find the marginal rate and tax paid equilibrium net rates of return are major determinants of the amount of owner housing but a logit model indicates that demographic factors are the main determinants of ownership rates in our simulation taxes on owner housing would raise welfare not only by reallocating capital but also by the government s taking part of the risk from individual properties and diversifying it away measures to disallow property tax or mortgage interest deductions do not help share this risk simulations of the 1986 tax reform indicate a small shift from rental to owner housing and

tax expenditures for owner occupied housing deductions for property taxes and mortgage interest and the exclusion of imputed rental income federal income tax policy affects the cost of homeowner ship for many households popular discussions of the favorable tax treatment of owner occupied housing usually focus on the tax deductibility of mortgage interest and prop erty tax payments as well as the specialized tax rules that affect housing capital gains academic discussions in contrast emphasize the exclusion of the imputed rental income on owner occupied housing as the key tax benefit for homeowners this paper summarizes the current distribution of the tax benefits associated with the mortgage interest and property tax deductions it contrasts this with the distribution of tax benefits asso ciated with the current tax regime for imputed rental income relative to one that taxes home

ecological restructuring or environment friendly deindustrialization abstract this paper describes the east german energy sector and its fate after 1990 with particular emphasis on environmental regulation unification turned the enlarged federal republic of germany into a rather dirty country and the world s largest producer of brown coal while primary energy demand in the west rose by almost 10 in 1991 it fell by about 30 in the east and demand was not expected to return to its pre wende u turn value until 2005 in spite of advancing privatization and energy price rises to western values in late 1991 esso expected a permanent decline during 1991 upheavals and uncertainty dominated life in the former german democratic republic by mid 1992 bitterness described the public mood and first signs of a political separatism could be detected optimists had hoped that by the year 2000 at the latest a planned economy devoted to energy self sufficiency would have become fully integrated into the west with the achievement of similar living standards evidence so far supports the pessimists who observe rapid industrial decline and the relative impoverishment of large sectors of the population possibly leading to political destabilization the ability of market forces to transform communism is being tested as is the ability of society to shed its socialist inheritance without psychological disintegration the process itself is as bewildering as it is fascinating its outcomes surely hold lessons for developments elsewhere especially for the role of government in transitional economies and the capacity of environmental regulation to facilitate macroeconomic change

impact of market demand mis specification on a two level supply chain this paper investigates the impact of mis specifying the market demand process on a serially linked two level supply chain box jenkins models are used to represent both the true and a mis specified market demand processes it is shown that the impact of mis specification on cost is minor if the supply chain tries to minimise the market demand forecast errors furthermore our analysis suggests that mis specification does not always result in additional costs a managerial insight is revealed poor forecast accuracy is not always bad for the total supply chain costs in other words employing more accurate forecasting methods may actually result in higher total supply chain costs

the social and private micro level consequences of homeownership abstract this paper reviews the literature that describes the micro level economic and social consequences of homeownership we adopt an interdisciplinary approach and include studies from economics sociology geography political science psychology and other disciplines our focus is on the set of consequences of homeownership in developed countries our list of potential outcomes of homeownership includes the impact on household wealth and portfolio choice mobility labor force participation urban structure and segregation home maintenance political and social activities health demographics self esteem and child outcomes there is substantial evidence that homeownership has important effects on some household behaviors and outcomes however we find that much of the past 30 year s literature on consequences of homeowning is deficient from a theoretical or econometric perspective we suggest solutions and identify research gaps present in the literature

incumbent behavior vote seeking tax setting and yardstick competition this paper develops a model of the political economy of tax setting in a multijurisdictional world where voters choices and incumbent behavior are determined simultaneously voters are assumed to make comparisons between jurisdictions to overcome political agency problems this forces incumbents into a yardstick competition in which they care about what other incumbents are doing we provide a theoretical framework and empirical evidence using u s state data from 1960 to 1988 the results are encouraging to the view that vote seeking and tax setting are tied together through the nexus of yardstick competition

ecological restructuring for sustainable development evidence from the australian economy abstract the possibility of reconciliation between economic growth and environmental quality has been foreshadowed by several influential reports over the last decade the potential basis for reconciliation lies in delinking economic growth from material and energy throughput especially through ecological restructuring toward modes of production consumption and trade which are less environmentally intensive so far empirical studies of delinking and ecological restructuring have shown conditional improvements in a small number of industrialized countries mostly high income european economies however there are reasons to believe that the situation may vary in natural resource based economies such as australia due to differences in trade and economic structures and incentives achieving global sustainable development will hinge upon prospects for ecological restructuring in all nations some of the central concepts of ecological restructuring are reviewed and extended to an empirical search for signs of delinking in australia to do this time series trends in physical quantities of seven environmentally significant factors are examined i e energy freight cement paper steel aluminium and plastic the factors serve as proxies for economic activity of a particularly environmentally intensive nature three dimensions are analyzed material intensity absolute throughput and per capita throughput the results show that promising trends in the 1980s have not persisted in the face of relatively high population growth and economic growth some implications for ecological restructuring as a basis for sustainable development in natural resource based economies are discussed in light of evidence from australia

transfer taxes and household mobility distortion on the housing or labor market we estimate the effect of the uk stamp duty land tax sdlt a transfer tax on the purchase price of property or land on different types of household mobility using micro data exploiting a discontinuity in the tax schedule we isolate the impact of the tax from other determinants of mobility we compare homeowners with self assessed house values on either sides of a cut off value where the tax rate jumps from 1 to 3 percent we find that a higher sdlt has a strong negative impact on housing related and short distance moves but does not adversely affect job induced or long distance mobility overall our results suggest that transfer taxes may mainly distort housing rather than labor markets

optimal centralized ordering policies in multi echelon inventory systems with correlated demands this paper treats a depot warehouse system in which demand occurs at the warehouse or retail level this work differs from a number of other studies in that we allow item demands to be correlated both across warehouses and also correlated in time our motivation for this generalization arises from our experience with an actual system of this type used by a major national producer and distributor of consumer products we observed both high correlations between successive monthly demands around 0 7 and correlations between demands for an item at different locations also about 0 7 in a given time period we derive an explicit expression for the optimal safety stock as a function of the level of correlation through time the analysis requires two assumptions 1 the allocation assumption and 2 the equal coefficient of variation assumption similar assumptions have been used by other researchers finally numerical evaluations are included to illustrate the impact of the various magnitudes of correlation

inventory performance under staggered deliveries and autocorrelated demand production plans often span a whole week or month even when independent production lots are completed every day and service performance is tallied daily such policies are said to use staggered deliveries meaning that the production rate for multiple days are determined at a single point in time assuming autocorrelated demand and linear inventory holding and backlog costs we identify the optimal replenishment policy for order cycles of length p with the addition of a once per cycle audit cost we optimize the order cycle length p via an inverse function approach in addition we characterize periodic inventory costs availability and fill rate as a consequence of staggering deliveries the inventory level becomes cyclically heteroskedastic this manifests itself as ripples in the expected cost and service levels nevertheless the cost optimal replenishment policy achieves a constant availability by using time varying safety stocks this is not the case with suboptimal constant safety stock policies where the availability fluctuates over the cycle

housing purchases and transitory income a study with panel data in this paper we explore the role of transitory income in the housing purchase decision because of moral hazard considerations banks typically require downpayments to be financed internally hence transitory income is potentially important in overcoming the downpayment constraint using a novel approach to the measurement of permanent and transitory income we estimate a two stage model in which households decide whether to purchase housing in the first stage and the quantity to be purchased in the second the results indicate a significant role for transitory income in both decision stages

a semi parametric approach for estimating critical fractiles under autocorrelated demand abstract forecasting critical fractiles of the lead time demand distribution is an important problem for operations managers making newsvendor type inventory decisions in this paper we propose a semi parametric approach to forecasting the critical fractile when demand is serially correlated starting from a user defined but potentially misspecified forecasting model we use historical demand data to generate empirical forecast errors of this model these errors are then used to 1 parametrically correct for any bias in the point forecast conditional on the recent demand history and 2 non parametrically estimate the critical fractile of the demand distribution without imposing distributional assumptions we present conditions under which this semi parametric approach provides a consistent estimate of the critical fractile and evaluate its finite sample properties using simulation and real data for retail inventory planning