learning to believe in sunspots a number of authors have shown that competitive economies may possess sunspot equilibria that is rational expectations equilibria in which purely extrinsic uncertainty affects equilibrium prices and allocations 2 such results demonstrate that it does not require a lack of faith in the rationality of market participants to believe that competitive markets may be subject to purely speculative fluctuations driven solely by expectations 3 the mere existence of sunspot equilibria as solutions to a system of marketclearing conditions however might not be judged sufficient to indicate that competitive markets with rational participants could ever be subject to speculative instability the sunspot equilibria represent states of affairs in which agents act differently in the case of different realizations of the sunspot variable and it is rational for each agent to do so but it might be thought unlikely that the beliefs of all the participants in the market could ever come to be coordinated so as to bring about an equilibrium of that kind it is rational to believe that sunspots convey information about future states of affairs once the economy is in a sunspot equilibrium but why would rational agents ever begin to believe in such a thing so as to create the conditions under which the belief is rational in order to address such a question one must go beyond the mere statement of the conditions for equilibrium and discussion of what states of affairs satisfy them one must specify an explicit dynamic process according to which the beliefs of agents adjust when out of equilibrium any exercise of this kind is necessarily unsatisfactory as there is no univocal meaning for the postulate of rational behavior outside of an equilibrium it may well be the case that

utility covariances and context effects in conjoint mnp models experimental conjoint choice analysis is among the most frequently used methods for measuring and analyzing consumer preferences the data from such experiments have been typically analyzed with the multinomial logit mnl model however there are several problems associated with the standard mnl model because it is based on the assumption that the error terms of the underlying random utilities are independent across alternatives choice sets and subjects the multinomial probit model mnp is well known to alleviate this assumption of independence of the error terms accounting for covariances in utilities in modeling choice experiments with the mnp is important because variation of the coefficients in the choice model may occur due to context effects previous research has shown that subjects utilities for alternatives depend on the choice context that is the particular set of alternatives evaluated simonson and tversky s tradeoff contrast principle describes the effect of the choice context on attribute importance and patterns of choice they distinguish local contrast effects which are caused by the alternatives in the offered set only and background contrast effects which are due to the influence of alternatives previously considered in choice experiments these effects are hypothesized to cause correlations in the utilities of alternatives within and across choice sets respectively the purpose of this study is to develop an mnp model for conjoint choice experiments this model is important for a more detailed study of choice patterns in those experiments in developing the mnp model for conjoint choice experiments several hurdles need to be taken related to the identification of the model and to the prediction of holdout profiles to overcome those problems we propose a random coefficients rc model that assumes a multivariate normal distribution of the regression coefficients with a rank one factor structure on the covariance matrix of these regression coefficients the parameters in this covariance matrix can be used to identify which attributes and levels of attributes are potentional sources of dependencies between the alternatives and choice sets in a conjoint choice experiment we present several versions of this model moreover for each of these models we allow utilities to be either correlated or independent across choice sets the independent probit ip model is used as a benchmark given the dimensionality of the integrations involved in computing the choice probabilities the models are estimated with simulated likelihood where simulations are used to approximate the integrals involved in the choice probabilities we apply and compare the models in two conjoint choice experiments in both applications the random coefficients mnp model that allows choices in different choice sets to be correlated rc displays superior fit and predictive validity compared with all other models we hypothesize that the difference in fit occurs because the rc model accommodates correlations among choice sets that are caused by background contrast effects whereas the model that treats choice sets as independent irc accounts for local contrast effects only the irc model shows superior model fit compared with the ip model but its predictions are worse than those of the ip model we find differences in the importance of local and background contrast effects for choice sets containing different numbers of alternatives the background contrast effect may be stronger for smaller choice sets whereas the local contrast effect may be stronger for bigger choice sets we illustrate the differences in simulated market shares that are obtained from the rc irc and ip models in three hypothetical situations product modification product line extension and the introduction of a me too brand in all of those situations substantially different market shares are predicted by the three models which illustrates the extent to which erroneous predictions may be obtained from the misspecified irc and ip models

the renewables portfolio standard in texas an early assessment texas has rapidly emerged as one of the leading wind power markets in the united states this development can be largely traced to a well designed and carefully implemented renewables portfolio standard rps the rps is a new policy mechanism that has received increasing attention as an attractive approach to support renewable power generation though replacing existing renewable energy policies with an as of yet untested approach in the rps is risky early experience from texas suggests that an rps can effectively spur renewables development and encourage competition among renewable energy producers initial rps targets in texas were well exceeded by the end of 2001 with 915 mw of wind installed in that year alone rps compliance costs appear negligible with new wind projects reportedly contracted for well under 3 us cent k wh in part as a result of a 1 7 us cent kwh production tax credit an outstanding wind resource and an rps that is sizable enough to drive project economies of scale obliged retail suppliers have been willing to enter into long term contracts with renewable generators reducing important risks for both the developer and the retail supplier finally the country s first comprehensive renewable energy certificate program has been put into place to monitor and track rps compliance c 2002 published by elsevier science ltd less

governmental intervention approaches to promote renewable energies special emphasis on japanese feed in tariff abstract almost all countries have issued laws and regulations to promote renewable energy re however the applications and motivations of such laws as well as achievements have been different currently the japanese government has announced its targets to expand the electricity feed in tariff scheme for solar power along with other energy sources within two years to meet the goal set by the japanese prime minister who in the 15th united nations climate change conference cop15 held in september 2009 proclaimed to cut 25 of greenhouse gas ghg emissions from the 1990 levels by 2020 in this paper the current japanese energy policies and measures for promoting re in comparison to popular methods followed worldwide are explored furthermore a least cost feed in tariff lcfit simulation model for japanese case was developed to calculate the optimal mix of technologies to reach certain targets the lcfit also calculates the tariff that should be proposed for each technology and the total cost for the program with and without a carbon tax and estimates the premium added to the bill of the customer every month

the importance of comprehensiveness in renewable electricity and energy efficiency policy based on extensive research interviews and supplemented with a review of the academic literature this article assesses the best way to promote renewable energy and energy efficiency it begins by briefly laying out why government intervention is needed and then details the four most favored policy mechanisms identified by participants eliminating subsidies for conventional and mature electricity technologies pricing electricity accurately passing a national feed in tariff and implementing a nationwide systems benefit fund to raise public awareness protect lower income households and administer demand side management programs drawing mostly from case studies in the united states the article also discusses why these policy mechanisms must be implemented comprehensively not individually if the barriers to renewables and energy efficiency are to be overcome

on the relationship between growth and volatility abstract we study the relationship between output growth and output variability in a simple stochastic monetary growth model with nominal rigidities and learning by doing we show that this relationship may be positive or negative depending on the impulse source of fluctuations

multiple discreteness and product differentiation demand for carbonated soft drinks for several of the largest supermarket product categories such as carbonated soft drinks canned soups ready to eat cereals and cookies consumers regularly purchase assortments of products within the category consumers often purchase multiple products and multiple units of each alternative selected on a given trip this multiple discreteness violates the single unit purchase assumption of multinomial logit and probit models the misspecification of such demand models in categories exhibiting multiple discreteness would produce incorrect measures of consumer response to marketing mix variables in studying product strategy these models would lead to misleading managerial conclusions we use an alternative microeconomic model of demand for categories that exhibit the multiple discreteness problem recognizing the separation between the time of purchase and the time of consumption we model consumers purchasing bundles of goods in anticipation of a stream of consumption occasions before the next trip we apply the model to a panel of household purchases for carbonated soft drinks

inflation uncertainty and growth in a cash in advance economy abstract this paper analyzes the effects of inflation variability on economic growth in a model where money is introduced via a cash in advance constraint in this setting we find that inflation adversely affects long run growth even when the cash in advance constraint applies only to consumption at the same time we find that inflation and growth are positively related in the short run furthermore variability increases average growth through a precautionary savings motive since inflation and inflation variability tend to be highly correlated the presence of uncertainty attenuates the negative long run relationship between inflation and real growth it also provides a partial rationale for the apparent lack of robustness in cross country regressions of growth and inflation

green electricity policies in the united states case study while there has been interest in promoting the use of renewable energy in electricity production for a number of years in the united states the market share of non hydro renewable energy sources in electricity production has remained at about 2 percent over the past decade the paper reviews the principal energy resources used for electricity production considers the changing regulatory environment for the electricity industry and describes government policies that have been used to promote green electricity in the united states with an emphasis on measures adopted by state governments factors influencing the development of green power markets are also discussed including underlying economic issues public policy measures the regulatory environment external costs and subsidies without significant increases in fossil fuel prices much more stringent environmental regulations or significant changes in electricity customer preferences green electricity markets are likely to develop slowly in the united states

inflation output growth and nominal and real uncertainty empirical evidence for the g7 abstract we use univariate garch models of inflation and output growth and monthly data for the g7 covering the 1957 2000 period to test for the causal effect of real and nominal macroeconomic uncertainty on inflation and output growth and the effect of inflation on inflation uncertainty our evidence supports a number of important conclusions first inflation is a positive determinant of uncertainty about inflation second output growth uncertainty is a positive determinant of the output growth rate third there is mixed evidence regarding the effect of inflation uncertainty on inflation and output growth hence uncertainty about the inflation rate is not necessarily detrimental to economic growth finally there is not much evidence supporting the hypothesis that output uncertainty raises inflation

a factor analytic probit model for representing the market structure in panel data internal market structure analysis infers both brand attributes and consumer preferences for those attributes from preference or choice data the authors exploit a new method for estimating probit models from panel data to infer market structures that can be displayed in few dimensions even though the model can represent every possible vector of purchase probabilities

extent and types of small scale wind policies in the u s states adoption and effectiveness abstract renewable energy sources including wind are increasingly promoted by u s state governments using state level data and survey responses from energy officials in 44 states this study catalogs the extent and types of small wind policies adopted by states it examines the factors correlated with policy adoption and perceptions about which policy tools are most effective results indicate that 84 of the states participating in the survey have adopted at least one policy to promote small wind technologies and most have adopted several policies the most frequent policy is net metering and this policy tool was also perceived to be one of the most effective at encouraging businesses and consumers to install small wind technologies however several other policy tools perceived to be most effective at promoting small wind installations have been adopted by relatively few states this identified gap suggests opportunities for improving policy effectiveness in explaining factors associated with adoption of policy tools we find support for variables comprising both the policy diffusion and internal determinants models of policy adoption including state commitment to environmental protection and policy innovations citizen ideology per capita wealth energy policy network communications and desire to be viewed as an environmental leader

towards a sustainable electrification in ghana a review of renewable energy deployment policies abstract ghana has been facing perennial power rationing over the years due to fuel supply challenges the country s energy system is likely to suffer additional strain from rising energy demand fueled by population growth rapid urbanization and economic development fortunately there are enormous renewable energy resources which can provide sustainable electrification as backbone to socioeconomic development while curbing global warming ghana s energy strategy targets 100 access to electricity and 10 share of sustainable power in national generation mix by 2020 despite the existence of numerous policies and a renewable energy act current contribution of non conventional renewable energy to electricity generation is less than 1 the right mix of policies to address the unique domestic conditions and achieve its specific development goals remains insufficient this study reviews the regulatory framework financing incentives and other provisions of ghana s renewable energy act it critically examines the policy s strengths weaknesses opportunities and treats based on comparative analysis and lessons drawn from failed and successful implementation of similar policies around the world the study also assesses the impact of policy on project development it was found that the performance of ghana s renewable energy policy on grid connected electricity has been poor compared to its target the fundamental reasons for this unsatisfactory performance may be attributed to partial implementation of policies lack of market driven support schemes lack of pricing policy framework weak grid network limited access to funds and inconsistencies in renewable energy development strategies this study proposes the following countermeasures i ghana should comprehensively harmonize renewable energy regulatory and fiscal policies with domestic electricity pricing regime ii market driven support schemes should be prioritized for cost effectiveness and minimum governmental influence these reforms can help eliminate some of the major barriers to sustainable electrification in ghana while the lessons provide a learning curve for other african countries

a probabilistic choice model for market segmentation and elasticity structure marketing scholars commonly characterize market structure by studying the patterns of substitution implied by brand switching though the approach is useful it typically ignores the destabilizing

a model for the multiperiod multiobjective power generation expansion problem a long term multiobjective model for the power generation expansion planning of electric systems is described and evaluated in this paper the model optimizes simultaneously multiple objectives i e minimizes costs environmental impact imported fuel and fuel price risks and decides the location of the planned generation units in a multiperiod planning horizon among the attributes considered in the model are the investment and operation cost of the units the environmental impact the amount of imported fuel and the portfolio investment risk the approach to solve this problem is based on multiobjective linear programming and the analytical hierarchy process a case study from the mexican electric power system is used to illustrate the proposed framework

environmental constituent interest green electricity policies and legislative voting abstract research in political economy has traditionally sought to disentangle the effects of legislative ideology and constituent interest in explaining policy decisions frequently proxy variables are used to measure constituent interest however these measures do not adequately reflect true constituent interest which is based upon the costs and benefits of the policies under consideration incorporating the scope of the policies using haiku a detailed model of the us electricity sector and taf an integrated assessment model of pollution pathways and valuation i construct economic measures of constituent interest at the state level as well as for federal policy i then use these measures to analyze state adoption of more stringent green electricity policies and congressional roll call voting on federal environmental policy previous studies that use proxy measures of constituent interest typically find that the legislator ideology matters more while my study shows that both ideology and constituent interest are significant factors

a nested logit model of space and water heat system choice this paper estimates a nested logit model for space heat and water heat choice using data from the 1980 pacific northwest energy survey pnw the estimated structure involves six alternative space heat systems and three alternative water heat fuel types operating and capital costs are predicted for each residence using an energy thermal model to relax the independence of irrelevant alternatives assumption we employ a family of nested logit models we illustrate the two step estimation method and use a lagrange multiplier test for nested logit structure finally we use the estimated models to forecast the market shares of alternative space heat systems under an assumed scenario for the course of relative fuel prices

a theory of ambiguity credibility and inflation under discretion and asymmetric information this paper develops a positive theory of credibility ambiguity and inflation under discretion and asymmetric information the monetary policymaker maximizes his own politically motivated objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth the relative importance he assigns to each target shifts stochastically through time his current preference trade off is known to him but not to the public when choosing the state contingent path of money growth for the present and the future the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker s objectives although expectations are rational information is imperfect because monetary control procedures are imprecise as a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors the public becomes aware of changes gradually by observing past monetary growth credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker credibility is lower the noisier monetary control and the more stable the objectives of the policymaker looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth when the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero the reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation he leaves the inevitable negative surprises for periods in which he cares more about inflation prevention this result provides an explanation for the fed s preference for ambiguity recently documented by goodfriend 1986 the policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference the paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation

another perspective on the effects of inflation uncertainty this paper examines the effects of inflation uncertainty on real economic activity by utilizing a flexible dynamic multivariate framework that accommodates possible interaction between the conditional means and variances the empirical model is based on a familiar identified vector autoregressive framework modified to accommodate multivariate generalized autoregressive conditional heteroskedasticity our empirical model is preferred to the baseline var by likelihood based information criteria and it retains the important dynamics of the underlying var we find that an average shock to inflation uncertainty has tended to reduce output growth over three months by about 22 basis points

green electricity market development lessons from europe and the us this study compares the development and implementation of green electricity policies in germany the netherlands sweden and the united states a set of countries applying a range of policy instruments to encourage electricity from renewable energy sources a general tendency is identified that policies shift emphasis from r d stimulation towards dissemination and market application of renewable energy technologies we argue that in light of the long term nature of policy goals on energy security mitigation of climate change and environmental protection the applied range of policy instruments may be lacking in providing incentives for the long term development of new technologies clarifying policy objectives would allow careful selection of policy instruments including support for r d improved capacity building for policy implementation is also important

the impact of heterogeneity in purchase timing and price responsiveness on estimates of sticker shock effects the notion that individuals have an internal reference price against which they compare observed prices is well supported by several psychological theories empirically several papers in the marketing literature employing scanner panel data have modeled the impact of reference prices on brand choice via the sticker shock formulation in which consumers evaluate choice alternatives using differences between shelf prices and reference prices most of the studies reported thus far have not accounted for heterogeneity in price response among consumers and have typically imputed reference prices from the shelf prices of brands that a consumer is supposed to have observed on previous purchases in the category since category marketing activity can differentially affect the purchase timing of households we argue that this measure of reference price may follow certain systematic patterns across consumers and when combined with unaccounted for price response heterogeneity may result in a spurious sticker shock effect specifically we show that estimates of sticker shock are biased upward if households that are price sensitive in the brand choice decision are also more responsive to category promotion activity in their purchase timing decision we discuss some general conditions under which the bias occurs and conduct a simulation experiment to confirm our specific hypotheses our simulation results show that changes in purchase timing are a critical determinant of the bias in the sticker shock effect we also show that unaccounted for price response heterogeneity can in itself result in a biased sticker shock parameter however this requires very large differences in price sensitivities across consumers far greater than what is normally observed we develop a hierarchical bayes version of the nested logit model which models heterogeneity via individual level parameters in a continuous random effects framework we estimate the model on scanner panel data from the yogurt and ketchup categories we find in both categories that the 95 probability interval of the posterior distribution of the mean sticker shock coefficient contains the value zero therefore at least for the data used in this study there is no evidence for the sticker shock effect at the aggregate level in contrast the corresponding coefficient from a standard model which ignores this heterogeneity is highly significant and supports the existence of a possibly spurious sticker shock effect consistent with our explanation of the underlying cause of the bias households that are more price sensitive in the choice decision are also found to be more responsive to category promotion activity in their decision to purchase in the category the results highlight the measurement problems associated with imputing reference prices from past prices since the frequency duration and price level of a retailer s promotional program depend on its size and prevalence accurate estimates of the sticker shock effect are essential for formulating optimal promotion strategies an adequate accounting of consumer heterogeneity is critical to this effort

analysing inflation by the fractionally integrated arfima garch model this paper considers the application of long memory processes to describing inflation for ten countries we implement a new procedure to obtain approximate maximum likelihood estimates of an arfima garch process which is fractionally integrated i d with a superimposed stationary arma component in its conditional mean additionally this long memory process is allowed to have garch type conditional heteroscedasticity on analysing monthly post world war ii cpi inflation for ten different countries we find strong evidence of long memory with mean reverting behaviour for all countries except japan which appears stationary for three high inflation economies there is evidence that the mean and volatility of inflation interact in a way that is consistent with the friedman hypothesis

investigating heterogeneity in brand preferences in logit models for panel data in analyzing panel data the issue of heterogeneity across households is an important consideration if heterogeneity is present but is ignored in the analysis it will result in biased and inconsi

the fischer black hypothesis some time series evidence we estimate an arch m model to analyze the relationship between the conditional standard deviation of real gross national product gnp and its growth rate for the period 1871 1993 we find that variability significantly increases output growth rates in addition impulse response functions show that the effect of variability on growth rates is dynamic these results provide evidence in favor of black s 1987 business cycle hypothesis

macroeconomic uncertainty and performance in the european union abstract we use a very general bivariate garch m model and monthly data on eu countries covering the 1962 2003 period to test for the impact of real output growth and nominal inflation macroeconomic uncertainty on inflation and output growth our evidence supports a number of important conclusions first in the majority of countries uncertainty regarding the output growth rate is related to the average growth rate and the effect in several countries is negative second in half of the cases there is no significant relationship between inflation uncertainty and output growth performance third inflation and output uncertainty have a mixed effect on inflation nevertheless considerable evidence for the cukierman meltzer hypothesis is obtained our conclusions are based on adopting both a structural and a reduced form bivariate garch model finally we also find statistically significant evidence of regime switching for both inflation and output growth volatility throughout the sample

fiscal and economic impacts of state incentives for wind energy development in the western united states abstract wind energy production in the united states has seen significant growth over recent years due in large part to the state and federal policies designed to encourage wind energy development this research focuses on measures undertaken at the state level in the western region of the united states several of these states have implemented legislation in the form of financial incentives and renewable portfolio standards to support wind development it is shown that state tax incentives and physical drivers have a significant positive impact on wind energy growth there has been concern however about the fiscal impacts of financial incentives on state tax revenues as a result some states have removed tax incentives a recent example is the removal of sales and use tax rebates for wind producers in idaho however the removal of such incentives results in a net loss of tax revenues as well as negative economic impacts by hindering the development of wind energy projects it is shown that attendant economic benefits from wind development results in significant positive fiscal impacts by increasing tax revenues for state and local governments the increased tax revenues begin with the pre construction and construction phases of such projects and continue to accrue throughout the life of project operations until eventual decommissioning the removal of this incentive in idaho results in a net reduction in tax revenues as well as the loss of significant economic benefits in terms of employment incomes and total output for the state

on inflation and inflation uncertainty in the g7 countries abstract the relationship between inflation and inflation uncertainty is investigated in the g7 countries from 1948 to 1993 garch models are used to generate a measure of inflation uncertainty and then granger methods are employed to test the causality between average inflation and inflation uncertainty in all g7 countries inflation significantly raises inflation uncertainty as predicted by friedman and ball weaker evidence is found that inflation uncertainty granger causes inflation in three countries us uk and germany increased inflation uncertainty lowers inflation while in two countries japan and france increased inflation uncertainty raises inflation

american policy conflict in the greenhouse divergent trends in federal regional state and local green energy and climate change policy climate change threatens significant impacts on global ecosystems and human populations to address this challenge industrialized nations have ratified the kyoto protocol and undertaken commitments to reduce emissions of greenhouse gases the primary agents linked to anthropogenic alteration of earth s climate by contrast the us government led by the bush administration has rejected mandatory targets for curbing emissions under the protocol and has instead pursued voluntary mitigation measures amid a larger push for clean coal and next generation nuclear technologies these actions in total have fueled global perceptions that the us is not acting in substantial ways to address climate change nevertheless action within the us is indeed moving forward with states cities and regional partnerships filling the federal leadership vacuum this paper reviews the diverse policies strategies and cooperative frameworks that have emerged at regional state and local levels to guide climate protection and identifies the environmental and economic benefits linked to such programs the paper also attempts to explain the existing federal impasse on climate policy with attention given to how sub national efforts may ultimately obviate national governmental inaction r 2007 elsevier ltd all rights reserved

choice map inferring a product market map from panel data this paper describes choice map a model that infers a product market map from panel data choice map is a stochastic brand choice model a random utility quantal choice model and a multidimensional scaling procedure choice map combines the parsimony of stochastic choice models the rationale of random utility models and the ability of multidimensional scaling procedures to simultaneously infer both brand positions and consumer preferences from preference choice data choice map assumes that consumers have stationary purchase probabilities for the observational period which makes the model best suited to frequently bought mature product categories neither experimental nor survey data are required traditional mapping methods that scale such data may not yield the same structure for low involvement products as will a procedure like choice map that scales behavioral data choice map s descriptive and predictive validity exceeds that of an alternative stochastic brand choice model the dirichlet multinomial for a test data set

a participatory approach to sustainable energy strategy development in a carbon intensive jurisdiction the case of nova scotia the need for governments to reduce the exposure of energy consumers to future increases in fossil fuel prices places urgent pressure on policy makers to deliver fundamental transformations in energy strategies particularly in jurisdictions with high dependency on fossil fuel sources dorian et al 2006 this transformation is unlikely without a high level of stakeholder engagement in the policy development process this paper describes two policy development processes recently undertaken in nova scotia in which the inclusion of stakeholder views was central to the approach the first delivered a new institutional framework for electricity energy efficiency involving the inception of an independent performance based administrator the second required the delivery of a strategy to significantly increase renewable energy generation in the province it involved recommendations for changes in institutional arrangements financial incentives and technological options this process was followed by new commitments to renewable energy developments new infrastructure for the importation of hydro electricity and the announcement of fits for ocean energy in both cases recommendations were made by an independent academic institution and the government responded directly to a majority of recommendations the paper concludes with a discussion of lessons learned and the implications for future energy policy making in carbon intensive jurisdictions

a unified approach to identifying estimating and testing demand structures with aggregate scanner data a one to one map between a specific demand structure and a restricted cross elasticity matrix is developed and tested using a random utility model the resulting demand structure can be used to evaluate a firm s ability to differentiate its products and can help determine if demand is characterized by factors that are easy to change similar brands are assumed to share common attributes that are stochastically evaluated by the consumer resulting in a random utility model with correlated errors the map results in more precise cross elasticity estimates and can be used to both identify and test possible structures

is the choice of renewable portfolio standards random this study investigated factors influencing the adoption or intention to adopt renewable portfolio standards rps by individual states in the united states u s theory of adoption of innovation was applied as a conceptual framework a logistic model was used to achieve the task gross state product gsp growth rate of population grp political party dominancy education level natural resources expenditure and share of coal in electricity generation were used as explanatory variables results indicated that the model predicts the dependent variable state s choice of adopting or not adopting rps 82 times correctly out of 100 results also suggested that education followed by political party dominancy gsp and grp are shown to have large impacts on the probability of rps adoption

the renewable portfolio standard design considerations and an implementation survey renewables have social and environmental bene ts compared to conventional electricity sources but are rarely competitive on a strict nancial cost basis this is because conventional sources are sometimes subsidized their full pollution costs are ignored and renewables involve newer higher cost technologies whose relative costs will fall with commercialization governments use several mechanisms to support renewables including direct nancial support grants loans indirect support r d demonstrations reform of nancial costs of conventional sources subsidy removal pollution taxes and the renewable portfolio standard rps the rps requires a minimum share of electricity from renewable energy sources its use is spreading because it maintains an incentive for renewable producers to reduce costs links the regulated market outcome to an environmental target and reduces government involvement although it is too early to evaluate fully its e ectiveness the survey for this study explored implementation issues in three european countries nine us states and australia and found the following the rps target is usually set to have environmental bene ts without causing signi cant price increases cost caps are sometimes used most jurisdictions limit eligibility to gridconnected domestic renewables the rps is usually applied to producers rather than consumers and to energy output not capacity flexibility mechanisms are desired but a challenge to implement administration in the us and australia is by government with delegation to independent utility regulators while in europe it is more the responsibility of government everywhere the rps is applied alongside other mechanisms of renewables support 2001 elsevier science ltd all rights reserved

estimating a multinomial probit model of brand choice using the method of simulated moments the multinomial probit model of brand choice is theoretically appealing for marketing applications as it is free from the independence of irrelevant alternatives property of the multinomial logit model however difficulties in estimation have restricted its widespread use in marketing this paper presents an application of the method of simulated moments a new methodology that enables easy estimation of probit models with a large number of alternatives in the choice set we describe the theoretical development of the technique and using pseudo simulated data conduct numerical experiments to compare the method with existing techniques for estimating probit models using the scanner panel data on the purchases of catsup we provide an empirical application of the method of simulated moments to the estimation of the parameters of a multinomial probit model estimating the covariance structure associated with the underlying latent variable probit model enables us to identify broad patterns of similarities across alternatives it also enables us to derive a pairwise similarity matrix across choice alternatives which when input into a multi dimensional scaling routine provides us with a graphical representation of competitive structure in the catsup market for completeness we compare the substantive implications for the effects of marketing variables obtained from the multinomial probit model with those obtained from models in the extant marketing literature

inflation output and uncertainty in the era of inflation targeting a multi economy view on causal linkages abstract this study provides cross country robust evidence on interdependencies among inflation output growth and respective uncertainties for the current era of low inflation policies we attribute the extant empirical disagreement on these relations to the fact that long sampling periods and single economies are typically considered for analysis in this study varx mgarch m models are estimated for 34 developed and emerging economies and the time period of 1990 2010 we study average granger causal effects by aggregating parameter estimates over economies the cross sectional variation of estimates serves as a means to assess the robustness of empirical findings over the entire cross section we find that both inflation and inflation uncertainty significantly reduce output growth economies with low inflation rates are particularly at risk to incur output losses from increasing inflation we also find spillover effects among uncertainty variables where the causal impact if present seems to point from the uncertainty in output to inflation uncertainty

innovation processes in large technical systems market liberalization as a driver for radical change abstract electricity supply is a large technical system which exhibits strong path dependencies and high barriers for radical innovations recent market liberalization however has initiated a fundamental restructuring the paper analyzes how liberalization has altered innovation processes in the field of electricity supply we examine three radical innovations under monopoly conditions and contrast the findings with the results from a survey on the innovation behavior of electric utilities in liberalized markets we argue that the selection environment for innovations has changed in various respects in our sample new options open to innovation activities have emerged at the level of the firm and utility strategies turn out to be more heterogeneous this may be interpreted as an increase in the variety of search processes which may lead to a mid term decrease of path dependencies

who invests in renewable electricity production empirical evidence and suggestions for further research transforming energy systems to fulfill the needs of a low carbon economy requires large investments in renewable electricity production res e recent literature underlines the need to take a closer look at the composition of the res e investor group in order to understand the motives and investment processes of different types of investors however existing energy policies generally consider res e investments made on a regional or national level and target investors who evaluate their res e investments according to least cost high profit criteria we present empirical evidence to show that res e investments are made by a heterogeneous group of investors that a variety of investors exist and that their formation varies among the different types of renewable sources this has direct implications for our understanding of the investment process in res e and for the study of motives and driving forces of res e investors we introduce a multi dimensional framework for analyzing differences between categories of investors which not only considers to the standard economic dimension which is predominant in the contemporary energy literature but also considers the entrepreneurship innovation adoption and institutional dimensions the framework emphasizes the influence of four main investor related factors on the investment process which should be studied in future research motives background resources and personal characteristics

the asymmetric effects of uncertainty on inflation and output growth we study the effects of growth volatility and inflation volatility on average rates of output growth and inflation for post war us data our results suggest that increased growth uncertainty is associated with significantly lower average growth while higher inflation uncertainty is significantly negatively correlated with lower output growth and lower average inflation both inflation and growth display evidence of significant asymmetric response to positive and negative shocks of equal magnitude copyright 2004 john wiley sons ltd

an empirical comparison of the validity of a neural net based multinomial logit choice model to alternative model specifications applications of choice models to brand purchase data as a rule specify a linear deterministic utility function we estimate deterministic utility by means of a neural net able to approximate any continuous multivariate function and its derivatives to a desired level of precision we compare this model to related alternatives both with linear and nonlinear utility functions alternatives with nonlinear utility functions are based on generalized additive modeling and taylor series expansion respectively we analyze purchase data of the six largest brands in terms of market share for two product groups neural choice models outperform the alternative models studied w r t posterior probabilities they also attain the best crossvalidated log likelihood values these results demonstrate that the increase in complexity caused by the neural choice model is justified by higher validity in the empirical study the neural choice models imply elasticities different from those obtained by linear utility multinomial logit models for several predictors neural choice models discover inversely s shaped saturation and interaction effects on utility

us consumers willingness to pay for green electricity abstract we analyze us consumers demand for environmental attributes of deregulated residential electricity services using results from a survey designed to elicit consumers willingness to pay for such attributes and using results from a hedonic analysis of actual price premiums charged for green electricity in several deregulated markets survey results suggest that many population segments are willing to pay for decreased air emissions even if there is no alteration in fuel source furthermore several groups are willing to pay significantly more when emissions reductions stem from increased reliance upon renewable fuels the hedonic analysis suggests that several product features not considered in the survey help explain real price premiums including fuel mix from newly created renewable generation capacity green e certification brand name and state of offer while survey and hedonic results are not easily compared due to limitations of the survey both point to similar values for key environmental attributes though the survey results are likely to overstate actual willingness to pay in sum the results suggest that consumer driven purchases can in part support the future of renewable generation capacity in the united states though reliance upon other policy alternatives may be needed if energy prices spike

wind farm investment risks under uncertain cdm benefit in china abstract china has set an ambitious target to increase its wind power capacity by 35 gw from 2007 to 2020 the country s hunger for clean power provides great opportunities for wind energy investors however risks from china s uncertain electricity market regulation and an uncertain energy policy framework mainly due to uncertain clean development mechanism cdm benefits prevent foreign investors from investing in china s wind energy the objectives of this paper are to 1 quantify wind energy investment risk premiums in an uncertain international energy policy context and 2 evaluate the impact of uncertain cdm benefits on the net present values of wind power projects with four scenarios this study simulates possible prices of certified emissions reductions cers from wind power projects project net present values npvs have been calculated the project risk premiums are drawn from different and uncertain cer prices our key findings show that uncertain cdm benefits will significantly affect the project npvs this paper concludes that the chinese government needs revising its tariff incentives most likely by introducing fixed feed in tariffs fits and re examining its cdm granting policy and its wind project tax rates to facilitate wind power development and enable china to achieve its wind energy target

a positive theory of inflation and inflation variance a positive theory of inflation and inflation variance empirically inflation and the variance of inflation are positively associated this paper develops a model that provides a potential explanation for this relationship in terms of the incentives facing the policymaker in a discretionary equilibrium the model can also account for an empirical association between inflation and measures of real output instability there is however no direct causal link whatever from the average rate of inflation to either the variance of inflation or that of real output i introduction the debate over the use rules or discretion in monetary policy has been central to macroeconomics for many years e g simons 1963 lucas 1980 buiter 1980 recently kydland and prescott 1977 and barro and gordon 1983a b have identified discretion as the absence of policy commitment in a game between policymakers and the public they argued that discretionary policymaking will lead governments to create excessive inflation a policy of low inflation is not consistent with incentives facing governments and thus will not be believed by the private sector barro and gordon 1983a argue that this positive theory of monetary policy can help to explain many features of the trend rate of inflation in modern economies high and persistent rates of inflation a positive relationship between inflation and unemployment and the observed countercyclical behaviour of monetary authorities among others these models are based on the premise that there are significant costs to a high but fully anticipated rate of inflation another feature of inflation in modern economics however is the well documented fact that inflation and the variability of inflation are positively associated this phenomenon has been widely observed over different countries at different times 1 this has led researchers to question the feasibility of a steady and predictable positive rate of inflation the finding suggests that high rates of inflation may reduce the ability to forecast future inflation rates a high average inflation rate may add an unnecessary degree of uncertainty to individual decision making and lead to a misallocation of resources friedman 1977 suggests that this may cause output instability and possibly raise the average unemployed rate a related paper by logue and sweeney 1981 establishes that there is a positive relationship between inflation and the variability of economic growth for industrial countries given this perspective the welfare costs associated with inflation might be considerably higher than the traditional costs of anticipated inflation this paper extends the barro and gordon 1983a model of discretionary monetary policy to take account of the relationship between inflation and measures of inflation and output variability the extension focussed on is to model an endogenous wage indexing scheme in the labor market in the discretionary equilibrium wage setters not only form rational expectations of the future price level but also choose an optimal degree of wage indexation this extension to the basic model has the following properties of a discretionary equilibrium 1 there is a positive association between the mean rate of inflation and the magnitude of real disturbances in the economy as well as between the mean inflation rate and the degree of output instability in the economy 2 in an economy where real disturbances are relatively important there is a positive association between the mean rate of inflation and the variance of inflation the explanation behind these results is as follows the lower is the degree of wage indexation the greater is the incentive for monetary authorities to cause surprise inflation and hence the higher is the mean rate of inflation in a discretionary equilibrium but the degree of wage indexation is negatively related to the variance of real disturbances in an economy which is subject to both real and nominal disturbances

a model of brand choice and purchase quantity price sensitivities many consumer decisions involve a discrete choice and a continuous outcome examples of such decisions are whether to own a home or rent one and how much to spend which brand of orange juice to buy and how many ounces to buy in cases like these the choice decision is typically modeled separately say using a logit model and the continuous outcomes modeled separately using regression analysis however the continuous outcomes may not be independent of the discrete choice and vice versa and modeling the two decisions independently can lead to inefficient choice parameter estimates and biased and inconsistent regression parameter estimates in this paper we present a methodology from the limited dependent variable literature to model the dependence between the choice and quantity decisions our substantive interest is in the role of price in the choice and quantity decisions when choosing among alternatives we argue that consumers consider prices of all the competitive brands in the quantity decision on the other hand only the price of the chosen alternative is expected to impact how much of the alternative is purchased the analysis of three brands using disaggregate level panel data strongly supports our hypothesis about the role of competitive prices in the choice and quantity decisions

lessons learned in france and quebec regarding financial and legal mechanisms to develop renewable energy a hybrid model as an acceptable solution for onshore wind abstract this article shows that the unfavorable context of emergence as well as neo corporatism limited the weight of wind energy in france and quebec and delayed the project development and the wind industry as a whole indeed the level of political will to wind energy development in both jurisdictions is fluctuating and characterized by a lack of continuity in policy or regulatory instruments the efficiency of the pricing mechanisms depends on its political design while the french feed in tariff is inefficient in terms of installed capacity and is deemed too expensive by opponents the first two calls for tenders in quebec fare quite well on that front however they are perceived as unacceptable due to the multinational companies involved and the implantation of large scale wind farms in inhabited areas the third community call for tender while generally better accepted locally is poorly regarded among the cooperative movement and at the national level because of the competition with the municipal sector and higher costs to society in both cases a hybrid pricing model would achieve a better balance between costs to society and local development thus promoting social acceptance through a greater diversity in ownership types and wind farms size

policies and market factors driving wind power development in the united states abstract in the united states there has been substantial recent growth in wind energy generating capacity with growth averaging 24 percent annually during the past five years about 1700 mw of wind energy capacity was installed in 2001 while another 410 mw became operational in 2002 during 2003 development activity has remained strong with an estimated 1600 mw of capacity installed with this growth an increasing number of states are experiencing investment in wind energy projects currently about half of all states host at least one wind power project this paper explores the key factors at play in the 12 states in which a substantial amount of wind energy capacity has been developed or planned some of the factors that are examined include policy drivers such as renewable portfolio standards rps federal and state financial incentives as well as market drivers such as consumer demand for green power natural gas price volatility and wholesale market rules

community power and population increase an empirical test of the growth machine model attempts to relate community power to policy outputs have been criticized for lacking theoretical relevance and statistical significance to overcome these criticisms this research employs a power policy model based on a political economy framework which utilizes molotch s conpetion of the community as a growth machine analysis of the permanent community sample provides strong power policy relationships that support the major tenets of the growth machine explanation as members of the business elite gain power they can successfully promote population growth that provides them with greater profits through higher property values the most widely cited common good for growth lower unemployment does not accrue this supports the relevance of a political economy approach to community phenomena and suggests different directions for community power research

policy instruments fostering wind energy projects a multi perspective evaluation approach abstract during the last decade a large number of policy instruments have been developed and implemented all over europe aiming at supporting renewable energy project development however the success of the different policy approaches varies significantly given the very different mechanisms of the diverse instruments the design or the selection of appropriate instruments may cause methodological difficulties in order to support instrument selection economists have developed several evaluation criteria however this paper states that most of the typically proposed and applied criteria catalogues still neglect the interests and requirements of important stakeholder groups this paper therefore proposes a more integrated evaluation approach taking into account the different interests of all relevant stakeholder groups in the three fields renewable energy business especially wind industry policy making and conventional power business

a nonparametric density estimation method for brand choice using scanner data nonparametric density estimation using a kernel method is proposed to model consumer brand choice recent availability of large scanner panel data allows the use of nonparametric approach which has few or at least fewer underlying assumptions and affords greater structural flexibility by removing as many assumptions as possible the author constructs the ultimate nonparametric model radically departing from the traditional approaches to highlight the differences in implementation and performance the proposed model does not involve either parameters that approximate certain distributions as in stochastic models or latent concepts such as utility as in utility maximization models the performance criteria include prediction of market response and brand choice share tracking and robustness under violation of various assumptions involved in parametric choice models such as correlated disturbance and misspecification the method is compared with a popular parametric counterpart the multinomial logit model on simulated and actual scanner panel data the paper emphasizes the conceptual importance of the nonparametric approach by discussing its advantages limitations and its complementary role in developing refining and diagnosing parametric models this perspective affords insight to modeling philosophy and suggests the possibility of a hybrid approach

aggregate economic activity and the variance of inflation another look abstract the time series of forecast errors and forecast variances estimated from engle s arch model are used to estimate the relationship between the volatility of inflation and key macroeconomic variables this is done using both a lucas supply framework and a granger causality framework the results of the latter in particular are strikingly different from previous work

an integrated choice model incorporating alternative mechanisms for consumers reactions to in store display and feature advertising the marketing literature has suggested two prominent decision mechanisms through which in store display and feature advertising can affect brand choice which i call the price cut proxy effect and the consideration set formation effect the primary objective of this study is to propose an integrated brand choice model that incorporates these two possible behavioral mechanisms which have been shown to work by previous research the model allows consumers to use various combinations of the decision mechanisms with different probabilities and thus enables one to jointly assess the extent to which each effect might occur in actual purchase data and to investigate how consumers might differ in their tendencies to engage in these decision processes by incorporating these likely behavioral mechanisms the proposed model alleviates the problems caused by multicollinearity and produces sensible parameter estimates for the joint effects of promotion vehicles in store display feature ad and price discount which contributes to better managerial decision making

complementarity and substitutability a review of state level renewable energy policy instrument interactions abstract this paper provides an extensive review of two streams of literature the first part of the review focuses on policy tools and their interrelationships and the second part focuses on the literature on the state renewable energy policy tools based on the reviews this paper investigates how policymakers choose a set of interrelated renewable energy policy instruments and identify under what conditions policy instruments complement or substitute we extend the political market framework by examining the influences of 1 administrative agencies on the supply side 2 interest groups on the demand side and 3 the policy induced problem situation changes on the adoption of state renewable energy policy tools building upon reviews of both policy tools and policy diffusion theories a set of hypotheses are advanced for state renewable energy policy interactions among public benefit fund pbf renewable portfolio standards rps and corporate tax incentive cti the hypotheses are tested by three event history models in which rps pbf and cti serve as dependent variables separately the complementary effects between previous use of rps and adoption of pbf between previous use of pbf and adoption of rps and between previous use of cti and adoption of rps are confirmed we also find support for the policy substitutability between previous use of cti and adoption of pbf

cost effectiveness of renewable electricity policies we analyze policies to promote renewable sources of electricity a portfolio standard rps raises electricity prices and primarily reduces gas fired generation a knee of the cost curve exists between 15 and 20 goals for 2020 in our central case and higher natural gas prices lower the cost of greater reliance on renewables a renewable energy production tax credit lowers electricity price at the expense of taxpayers which limits its effectiveness in reducing carbon emissions and it is less cost effective at increasing renewables than a portfolio standard neither policy is as cost effective as a cap and trade policy for achieving carbon emission reductions

quality perceptions and asymmetric switching between brands rotating indifference curves are used to induce an income effect that favors superior brands at the expense of inferior brands in a discrete choice model when calibrated on scanner panel data the model yields an objective measure of brand quality which is related to the rate of rotation the model also leads to asymmetric responses to price promotions where switching up to high quality brands is more likely than switching down the model is capable of nesting the standard logit model and is similar to a nested logit model when there exists clusters of brands of like quality the model is used to explore a product line pricing decision where profits are maximized subject to the constraint that consumer utility is maintained

the impact of choice architecture on sustainable consumer behavior the role of guilt companies often encourage consumers to engage in sustainable behaviors using their services in a more environmentally friendly or green way such as reusing the towels in a hotel or replacing paper bank statements by electronic statements sometimes the option of green service is implied as the default and consumers can opt out while in other cases consumers need to explicitly ask opt in for switching to a green service this research examines the effectiveness of choice architecture and particularly the different default policies i e the alternative the consumer receives if he she does not explicitly request otherwise in engaging consumer green behavior in four experiments we show that the opt out default policy is more effective than the opt in because it increases anticipated guilt this effect is stronger for consumers who are less conscious for the environment study 1 we also show that a forced choice policy in which the consumer is not automatically assigned to any condition and is forced to choose between the green and the non green service option is more effective than the opt in policy and not significantly more effective than the opt out policy study 2 finally we show that the role of defaults is weakened enhanced if a negotiated reciprocal cooperation strategy is used study 3 the article contributes to the literature of defaults and provides managerial and public policy implications for the design of green services

modeling employment dynamics with state dependence and unobserved heterogeneity this study extends existing work on the dynamics of labor force participation by distinguishing between full time and part time employment and by allowing unobserved heterogeneity in the effects of previous employment outcomes children and education on labor supply behavior in addition unobserved heterogeneity may feature autocorrelation and correlated random effects the results reveal significant variation in the effects of children and education on labor supply behavior moreover the omission of random coefficients and autocorrelation biases estimates of state dependencies on average temporary shocks that increase the rate of part time employment lead subsequently to lower rates of nonemployment than do shocks that temporarily increase the rate of full time work the article has additional online supplementary material

trendy solutions why do states adopt sustainable energy portfolio standards abstract thirty four states had adopted sustainable energy portfolio standards seps or similar goals by the end of 2008 with 14 adoptions since 2006 there appears to be something trendy about seps and states may adopt seps when internal variables would indicate otherwise this analysis extends the current discussion of seps adoption beyond internal variables relying on innovation and diffusion theory logistic regression with seps adoption as the dependent variable is used to test internal determinants and diffusion measures for the years 1997 2008 of the internal determinants variables affluence and government ideology were found to be positive and significant the results show that regional and neighbor diffusion variables are significant in seps adoption decisions even when accounting for ideological distance from previous adopters

predictive testing of consumer choice models not subject to independence of irrelevant alternatives the probabilistic modeling of the relationship between objective or perceived characteristics of multiattribute alternatives and consumer choice is receiving increased attention in marketing and ot

geographic proximity to coal plants and u s public support for extending the production tax credit abstract the production tax credit ptc is an important policy instrument through which the federal government promotes renewable energy development in the united states however the efficacy of the ptc is hampered by repeated expirations and short term extensions and by the general uncertainty surrounding its future status we examine the factors driving variation in public support for the extension of the ptc using a nationally representative internet based survey americans living near a coal fired power plant are significantly more likely to support extending the ptc than are their peers who are more insulated from the externalities of burning coal the evidence for this dynamic was strongest and most statistically significant among subjects experimentally primed to think about the adverse health effects of burning coal raising awareness of the public health ramifications of generating electricity from fossil fuels holds the potential to increase support for renewable energy policies among those living in proximity to coal plants even in a highly politicized policy debate

the effects of real and nominal uncertainty on inflation and output growth some garch m evidence in this paper we use garch m methods to test four hypotheses about the effects of real and nominal uncertainty on average inflation and output growth in the united states from 1948 to 1996 we find no evidence that higher inflation uncertainty or higher output growth uncertainty raises the average inflation rate we also find no support for the idea that more risky output growth is associated with a higher average real growth rate our key result is that in a variety of models and sample periods inflation uncertainty significantly lowers real output growth copyright 2000 john wiley sons ltd

mobilizing private finance for low carbon innovation a systematic review of barriers and solutions this paper analyses the field of innovation studies regarding barriers to low carbon innovation and consequences for finance investment and divestment and contributes to a more holistic understanding of the underlying mechanisms a combination of technological barriers combined with economic barriers institutional and political barriers contribute to sub optimal low carbon investment all along the innovation cycle policy makers need to take a systemic approach to enable the redirection of diverse private financial sources instruments range from cutting dirty r d subsidies and support for clean technology innovation and diffusion levelling the institutional playing field and making risks of high carbon and low carbon technologies transparent to providing a consistent but adaptive long term transition strategy this would allow financiers to gradually shift their investments away from high carbon mainstream markets and scale low carbon technology niche markets however financiers also need to sharpen their competencies with regard to new clean technologies and markets

a multiplicative fixed effects model of consumer choice the issue of consumer heterogeneity in discrete choice analysis has been attracting much attention recently research has suggested that heterogeneity can result in biased parameter estimates which in turn can lead to incorrect conclusions among the many methods proposed in the literature to handle heterogeneity fixed effects models seem to be the most attractive from a substantive point of view however in order to provide consistent estimates these models typically require long purchase histories this difficult constraint has prevented their widespread use in this paper we propose a new model which offers the benefits of fixed effects models without requiring long purchase histories our approach differs from the classic formulation in two ways first we calibrate the common and fixed effects sequentially rather than simultaneously this two stage estimation permits us to obtain unbiased estimates of the common parameters even when the sample has households with very few observations second we incorporate the fixed effects in a multiplicative rather than in an additive form our assumptions regarding the error term result in a probit model with heteroskedastic and temporally correlated random utilities we develop a method of moments based estimator to calibrate parameters of models with this type of error structure this procedure exploits the property that the method of moments yields estimates which are asymptotically as efficient as the maximum likelihood estimates given an appropriate starting point and a matrix of instruments this is a very general procedure in that its mechanics are not tied to the proposed model it can be readily applied to other problems where probit models are used to analyze data with serial correlation this is a methodological contribution of the paper the model and estimation procedure are illustrated on the a c nielsen scanner data base for the liquid detergent category our results indicate that the proposed model can provide a better fit than random effects and loyalty based models and better predictive performance than random effects models from a substantive perspective our analysis provides the following findings a the distribution of price sensitivities has a low variance thus most households have very similar price sensitivity in this category b the promotion response distribution has a high variance suggesting that there are some households that are highly responsive to promotions while there are quite a few households that are less influenced by promotions c preferences and price sensitivity have a negative covariance which is an indication that a reduction in preference for a brand is associated with an increase in price sensitivity and vice versa d preferences and promotion response have a positive covariance thus as the preference for a brand increases response to promotions by the brand also increases and e price sensitivity and promotion response have a negative covariance implying that as households become more price sensitive purchases may be driven more by price than by promotions in other words rather than responding to promotions such as displays and features as signals of a reduced price price sensitive households actively evaluate prices in arriving at a choice the proposed approach can be used by theoretical as well as applied researchers of brand choice behavior specifically estimates of fixed effects provided by the model can be used to cluster households into groups with similar parameters profiling the resulting groups in terms of demographics would provide interesting insights from a theoretical perspective regarding the household characteristics that are associated with different types of response behavior it would also help managers to better target their brands using the proposed approach for cross category analyses of fixed effects would be an interesting area of future research for instance given a sample of households and their purchase histories in multiple categories the proposed model can be used to explore the relationship between household behavior and category characteristics in particular issues such as the following can be investigated by comparing household level estimates across categories a are households that are highly price sensitive in one category also price sensitive in other categories b what household characteristics are associated with high low price sensitivity or high low promotion response across categories and c in what types of categories are households likely to exhibit high low price sensitivity or high low promotion response

the effect of recessions on the relationship between output variability and growth this paper investigates the relationship between output volatility and growth using post war real gdp data for the united states we expand on recent research by beaudry and koop 1993 documenting the asymmetric effect of recessions on output growth the results presented in this paper suggest that output volatility is highest when the economy is contracting while we find that the economy expands most rapidly following a recession this expansion is offset by the negative impact of output uncertainty

a probit model of choice dynamics there are many products which are repeatedly purchased by consumers in such cases it is likely that choice history that is the sequence of choices made in the past as well as marketing variables affect subsequent choice decisions attempts to model the effects of choice history have been generally based on the inclusion of variables that represent brand loyalty and or variety seeking behavior in this paper we present a model of dynamic choice behavior which is more general and incorporates four characteristics the first characteristic labeled preference reinforcement and preference reduction represents loyalty and variety seeking the second is the short term reluctance of a consumer to move from the current brand inertia or the willingness to move to another brand mobility the third characteristic captures the effect of repetitive consumption the long term effect on inertia and mobility the fourth characteristic incorporates the similarity or dissimilarity of choice alternatives this is important in a dynamic model because choice on the current purchase occasion can be affected by whether a similar or dissimilar alternative was chosen on the previous occasion similarities of alternatives are represented in terms of distances the effect of price on choice behavior is also modeled individual level purchase data from a consumer panel are used to estimate a covariance probit and an independent probit specification of the model from a substantive perspective the model gives interesting insights into the dynamics of choice behavior the model predicts switches better than a benchmark model which incorporates only loyalty in addition it is superior to three benchmark models in overall predictive ability

price uncertainty and consumer search a structural model of consideration set formation we offer an econometric framework that models consumer s consideration set formation as an outcome of her costly information search behavior because frequently purchased products are characterized by frequent price promotions of varying depths of discounts a consumer faces significant uncertainty about the prices of the brands the consumers engage in a fixed sample search strategy that results in their discovering the posted prices of a subset of the available brands this subset is referred to as the consumer s consideration set the proposed model is estimated using the scanner data set for liquid detergents our key empirical results are i consumers zincur significant search costs to discover the posted prices of the brands ii whereas in store displays and feature ads do not influence consumers quality perceptions of the brands they significantly reduce search costs for observing the prices of the brands iii per capita income of consumer s household significantly increases her search costs and iv the consumers price sensitivity is seriously underestimated if we were to assume that consumers get to know all the posted prices at zero cost the proposed model is also estimated for the ketchup category to enable us to do cross category comparisons of consumers price search behavior

a choice model for packaged goods dealing with discrete quantities and quantity discounts utility maximizing solutions to economic models of choice for goods with either discrete quantities or non linear prices cannot always be obtained using standard first order conditions such as kuhn tucker and roy s identity when quantities are discrete there is no guarantee that derivatives of the utility function are equal to derivatives of the budget constraint moreover when prices are nonlinear as in the case of quantity discounts first order conditions can be associated with the minimum rather than the maximum value of utility in these cases the utility function must be directly evaluated to determine its maximum this evaluation can be computationally challenging when there exist many offerings and when stochastic elements are introduced into the utility function in this paper we provide an economic model of demand for substitute brands that is flexible parsimonious and easy to implement the methodology is demonstrated with a scanner panel data set of light beer purchases the model is used to explore the effects of price promotions on primary and secondary demand and the utility of product assortment

nominal uncertainty and inflation the role of european union membership abstract we provide evidence that higher inflation uncertainty leads to higher inflation in the new european union eu member states and candidate countries only prior to eu accession during eu accession and entry inflation uncertainty has no effect on mean inflation

clean energy policies and green jobs an evaluation of green jobs in u s metropolitan areas state and local governments in the u s are actively promoting renewable energy and energy efficiency to seek economic development opportunities and create green jobs this study evaluates the employment effects of state and local clean energy and climate policies in u s metropolitan areas msas in 2006 the regression analysis shows that both state and local clean energy policies have positive and statistically significant impacts on green jobs at the metropolitan level the results from two stage probit least squares 2spls indicate that every additional state clean energy policy tool adopted is associated with 1 more green jobs in the msa on average msas with iclei membership maintain 9 3 more green jobs than msas without iclei membership ceteris paribus

inflation and uncertainty tests for temporal ordering for the postwar united states increases in the rate of inflation tend to precede increases in the level of inflation uncertainty the finding suggests that higher inflation uncertainty is part of the welfare cost of inflation possible explanations are 1 a high rate of inflation increases uncertainty about future monetary policy and 2 there is uncertainty about the persistence of inflation copyright 1995 by ohio state university press

impact of global uncertainty on the global economy and large developed and developing economies global uncertainty shocks are associated with a sharp decline in global inflation growth and interest rate global uncertainty shocks have more protracted statistically significant and substantia

inflation and output growth uncertainty and their relationship with inflation and output growth abstract using a bivariate garch model of inflation and output growth we find evidence that higher inflation and more inflation uncertainty lead to lower output growth in the japanese economy these results support the argument of a price stability objective for the monetary authority