willingness to pay for quality improvements comparative statics and interpretation of contingent valuation results this paper extends variation function theory by examining the effects of changes in prices quality and income on willingness to pay for quality change comparative static effects are found for both on site users and nonusers of the resource these results are used to interpret contingent valuation empirical models for example the substitution and complementary relationships between trips to natural resource sites can be identified this paper also suggests tests for comparison of contingent valuation with recreation demand models and other tests of validity

towards a characterization of assets and knowledge created in technological agreements some evidence from the automobile robotics sector this paper is an initial attempt to shed new light on the nature and dynamics of technological agreements based on some cognitive dimensions the main purpose of such agreements is to create new competencies and therefore we argue that the nature and characteristics of the knowledge bases that are at the origin of this type of learning process play an essential role in defining the directions and the outcome of learning in particular we examine some case studies of agreements between automobile and robotics firms which show a clear link between the degree of generality of the knowledge produced in the agreement and the capacity to explore new learning paths this explorative capacity also appears to he linked to the ability to generate meta rules of behaviour copyright 2000 by oxford university press

theoretical and empirical specifications issues in travel cost demand studies the ultimate objective of empirical travel cost demand studies is to obtain an estimate of the welfare derived from utilizing outdoor recreational resources thus it is apparent that travel cost demand equations must be linked to utility maximization deyak and smith freeman bockstael and mcconnell hanemann bockstael hanemann and strand we specify a model of utilitymaximizing recreation demand behavior which postulates that individuals choose the total number of days that they wish to spend at the recreation site this total number of recreation days is the product of the number of trips

joint recreation choices and implied values of time a model of joint recreation quantity choices is developed individuals choose both total time spent at distant sites and the number of trips taken implicitly choosing average on site time the model permits nonzero marginal utility of travel makes on site time endogenous and is linear in the constraints the scarcity value of time is analyzed without assuming the marginal utility of work time is zero a partially testable assumption about relative marginal values of travel and on site time yields nonparametric calculations of the scarcity value of time and marginal values of trips and days on site from people s observed optimal quantity choices

public goods as characteristics of non market commodities in benefit cost analysis it is useful to model public goods as the quality of privately consumed nonmarketed goods this strategy is often pursued in valuing environmental amenities the theoretical foundations of this model have not been fully developed in this paper comparative statics results are derived for quality changes of nonmarket goods the results reveal some common misconceptions about welfare measurement of quality changes conditions are presented for a quality induced change in the marshallian consumer surplus of the nonmarket good to approximate the true compensated welfare measure the conditions are equally necessary for obtaining exact welfare measures copyright 1993 by royal economic society

endogenous on site time in the recreation demand model careful modeling of on site time may substantially improve estimates of the bene fits of recreational visits using the travel cost method especially when on site time is endoge nous this paper reviews the theory of endoge nous on site time and shows how the theory may apply to the random utility model rum an empirical example of a two level nested choice model of sport fishing in southcentral alaska il lustrates a discussion of the relative advantages of the different ways to specify endogenous on site time jel q26

the imf a bird s eye view of its role and operations the international monetary fund imf is the world s premier international financial institution with 184 member countries and active programmes in a significant number of them at any one time the fund attracts a great deal of attention much of it critical but the discussion is often polemic in style strongly held but frequently opposing views are expressed this survey attempts to examine in an objective way the theory and evidence relating to the fund s operations many aspects of the empirical research are relatively recent and a universal consensus is yet to emerge as a consequence there is scope for disagreement to persist however the research is also gradually clarifying many important issues the format for the survey is to examine the life cycle of imf arrangements what makes a country turn to the fund for assistance should the imf be lending what influences the outcome of negotiations and the design of programmes are imf programmes effective and why do some countries make prolonged use of imf resources for completeness there is also some discussion of the history of the imf the extent to which fund policies have been influenced by advances in economic theory and the fund s systemic role important organisational and governance issues are also covered briefly although primarily adopting an economist s perspective the survey reflects the growing recognition that in order to understand the imf s operations economics has to be combined with politics examining the imf is an exercise in applied political economy copyright 2007 the author journal compilation 2007 blackwell publishing ltd

closely related good prices in the travel cost model this travel cost demand study included prices for closely related goods such as money and time costs of on site time on site purchases and other trip activities a disequilibrium labor market model was estimated the sample was mainly composed of persons who did not substitute earned income for leisure time the few persons who had the capability to substitute time for money were excluded from the sample consumer surplus was estimated to be 69 per trip using the expanded model a model using only the conventional travel cost variables resulted in estimated surplus per trip of 45

the fruits of intellectual production economic and scientific specialisation among oecd countries this paper brings together data from 14 oecd countries on scientific publications patents and production specialisation to explore the relationship between economic and production specialisation for 17 manufacturing sectors since marx there has been a fundamental debate in economics about the link between science and the economic system marx argued that the developments in the science system are strongly influenced by changes in the economic sphere whereas polanyi argued that developments in science are largely independent of economic sphere using a panel data model and econometric estimations at the sectoral level the paper assesses the two positions and finds considerable support for marx s position that is that scientific and production specialisation are often tightly linked

the estimation of demand parameters in hedonic price models this paper shows that the econometric problem of estimating hedonic demand parameters is not a standard identification problem caused by demand supply interaction as has been often assumed estimation procedures based on this assumption lead to biased results the hedonic estimation problem is instead caused by the endogeneity of both prices and quantities when households face a nonlinear budget constraint an instrumental variables solution to this problem is suggested using instruments that exogenously shift the budget constraint

the opportunity cost of travel time in recreation demand models deciding how to allocate forage among animals is a fundamentally important process in range management the wisdom of these decisions can be enhanced by estimating the marginal value of forage needed by competing species we present a method for

the episodic and unpredictable nature of imf lending an empirical analysis having had excess lending capacity at the beginning of 2008 by the end of the year international monetary fund imf lending had increased and in anticipation of a further increase in the demand for fund assistance arguments were being put forward for a substantial increase in imf resources analysis of imf lending over a protracted period of time reveals considerable volatility using both bivariate and multiple regression estimation this paper investigates the determinants of imf lending and examines the extent to which it is predictable although some significant relationships are discovered many of them are unstable and time variant this makes it difficult to predict imf lending with any degree of confidence the paper goes on to examine briefly the policy implications of unpredictability it is critical of the ways in which the problem has been handled in the past and it offers what it argues is a preferable solution

a semi parametric estimator for revealed and stated preference data an application to recreational beach visitation abstract we present a semi parametric approach for jointly estimating revealed and stated preference recreation demand models the discrete factor method dfm allows for correlation across demand equations and incorporates unobserved heterogeneity our model is a generalized negative binomial with random effects the random effect is composed of a discrete representation of unobserved heterogeneity and a factor loading that translates the heterogeneity measure into a demand effect our empirical application is to beach recreation demand in north carolina statistical evidence supports our dfm specification which imposes less restriction on model dispersion and incorporates unobserved heterogeneity in a flexible manner elasticity estimates are smaller than those derived from models with parametric specifications for unobserved heterogeneity and welfare estimates are slightly larger and less precise while parametric models clearly dominate if the specification of unobserved heterogeneity is correct the semi parametric dfm provides a flexible alternative in cases where mis specification is a potential problem

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

the necessity for substitute prices recreation demand analyses omitting substitute prices from a travel cost model is shown to cause a significant bias in consumer surplus estimates three sets of travel cost models are developed from a common data base representing 60 000 day users of u s army corps of engineer reservoirs in kansas and missouri the firzt set of models omitted substitute prices the latter two sets included them an analysis of variance test showed that consumer surplus estimates from the first set of models were significantly higher than the other two f 26 2 with 2 20 degrees of freedom the theoretical and practical implications of these findings are discussed economic theory postulates that the demand for a good is a function of its price the price of related goods and services and income still many empirical estimates of demand for recreation sites have ignored the price of substitute recreation sites the most common technique for estimating recreational demand is the travel cost model tcm a comprehensive literature review of the tcm conducted by dwyer kelly and bowes showed that only six of twenty clearly defined tcm demand functions included substitute prices as an argument in the demand function most of the models they reviewed were old but considerable debate remains about incorporating substitutes in the tcm consider the diversity of approaches that have recently been used to incorporate substitute prices into tcm demand functions when modeling recreation demand at corps of engineer reservoirs desvousges smith and mcgivney omitted any

hedonic onsight cost model of recreation demand for many recreational activities onsite pecuniary costs can be a significant portion of the cost of a recreational trip onsite expenditures however often depend upon endogenous quality choices made by the household we formulate a recreation demand model that formally accounts for household selection of quality of onsite time household behavior is constrained by income prices and the onsite hedonic price schedule assuming complete optimization a reduced form marshallian demand curve for recreation trips still results and a specialized version of roy s identity provides a basis for welfare analysis instrumenting for endogenous quality choices does not improve demand estimation

estimating social welfare using count data models an application to long run recreation demand under conditions of endogenous stratification and truncation this paper develops a negative binomial model of recreation demand that corrects for both truncation and endogenous stratification this approach recovers the demand associated with the general population not just the users of the site this model demonstrates the importance of the joint nature of the population s latent demand for trips and the consumer surplus associated with those trips the empirical results provide an estimate of the willingness to pay by washington state residents for hiking opportunities in the cascade mountain range these results are used to forecast total trips and willingness to pay over the next forty years copyright 1995 by mit press

stability without a pact lessons from the european gold standard 1880 1914 stability pacts european lessons from the gold standard the gold standard was a system of fixed exchange rates that offered little opportunity for carrying out monetary policies short of suspending gold convertibility trade integration and capital mobility were very high it is worthwhile asking whether there are useful lessons to draw for emu from european experience during that period one clear lesson is that debts matter another basic finding is that the stability of the european gold standard depended on the underlying price trend deflation prior to 1895 resulted in rising public debt burdens which forced some countries to leave the system once gold was discovered and deflation gave way to inflation real interest service fell debts grew more slowly and a high degree of convergence allowed most countries to return to gold for emu this result implies that stability will hinge on the ecb s policy not being too restrictive other lessons concern the fragility of institutions in the face of deep public finance difficulties the risks for the single market of leaving out countries that have not fully converged and the existence of a virtuous cycle including low real interest rates fast growth and debt reduction marc flandreau jacques le cacheux and frederic zumer

compensating variation consumer s surplus and welfare the compensating variation was defined by j r hicks 1942 as the amount one would have to deduct from a person s income to make him just as well off after a change in prices and income as he had been in the initial situation if the compensating variation is positive the individual is better off under the new situation since the compensating variation furnishes a uniquely defined numerical cardinal indicator of welfare improvement it provides an implicit ranking of alternative prospective situations not only relative to the initial situation but also relative to each other in practice this appears to be how this and other tools of cost benefit analysis are actually used one is interested in knowing not only whether a particular bridge or a particular excise tax will lead to an improvement in welfare but which out of a set of alternative bridges or alternative tax systems will improve welfare the most 1 in this paper we analyze conditions under which the compensating variation can be validly used in this generalized sense these turn out to be precisely the same as conditions previously derived see our 1976 paper for the valid use of consumer s surplus as a welfare measure in our final section we analyze the problem of deriving the generalized equivalent and compensating variations either exactly or approximately from observable demand functions by means of generalizations of or alternatives to consumer s surplus

selective intervention and internal hybrids interpreting and learning from the rise and decline of the oticon spaghetti organization infusing hierarchies with elements of market control has become a much used way of simultaneously increasing entrepreneurialism and motivation in firms however this paper argues that such internal hybrids particularly in their radical forms are inherently hard to successfully design and implement because of a fundamental incentive problem of establishing credible managerial commitments to not intervene in delegated decision making this theme is developed and illustrated using the case of the world leading hearing aids producer oticon in the beginning of the 1990s oticon became famous for its radical internal hybrid the spaghetti organization recent work has interpreted the spaghetti organization as a radical attempt to foster dynamic capabilities by organizational means neglecting however that about a decade later the spaghetti organization has given way to a more traditional matrix organization in contrast an organizational economics interpretation of oticon organizational changes is developed this lens suggests that a strong liability of the spaghetti organization was the above incentive problem frequent managerial meddling with delegated rights led to a severe loss of motivation and arguably caused the change to a more structured organization refutable implications are developed and the discussion is broadened to more general issues of economic organization

dominant currencies special drawing rights and supernational bank money tem ims the crisis was preceded by a bubble in the housing and share markets fuelled by an expansive monetary policy see fratianni 2008 by now a consensus has developed that the financial regulatory structure needs a significant overhaul much less attention has been paid to the instability of the dollar based ims and the potential that it may have to spark another deep crisis in the future the fact that the financial tsunami has not instigated a confidence crisis in the us dollar has fed optimism that the financial crisis may be resolved without substantive changes in the existing international monetary regime in this vein at the onset of the crisis bernanke 2007 reaffirmed the thesis that the external imbal ances of the us were largely caused by factors taking place outside the us namely in fast growing emerging economies in particular china and oil producing countries where ex ante saving was far in excess of ex ante investment the implication of the global saving glut thesis is that the large us external imbalances are largely a temporary phenomenon rather than structural and thus would find a natural solution in time another pietro alessandrini is professor of monetary economics at the faculty of economics of the university of ancona italy and a member of mofir money and finance research group michele fratianni is professor emeritus at the kelley school of business of indiana university professor of international finance at the faculty of economics of the university of ancona italy and a member of mofir money and finance research group

welfare measurement in the household production framework the household production approach to consumer behavior developed from the work of gary becker william gorman and kelvin lancaster has considerable descriptive appeal in modelling the decisions of households the approach derives from the observation that households frequently purchase market goods that do not yield utility directly but are combined to produce commodity service flows which the household values thus observed behavior is determined by household production technology as well as by tastes the advantage of this distinction is that we can pose reasonable hypotheses about characteristics of technology though we rarely possess useful a priori information regarding tastes the putative advantages of the household production approach are questioned on empirical and conceptual grounds by robert pollak and michael wachter 1975 they show that jointness in production or nonconstant returns to scale cause implicit commodity prices to depend on both tastes and technology raising serious econometric difficulties in the estimation of commodity demand functions in addition since commodity prices become functions of the commodity bundle consumed the analogy to traditional demand theory breaks down joint production occurs when a good enters several production processes simultaneously or equivalently when a good in one production process also enters directly into the individual s utility function the most common example is time which provides the context for all production processes and is often associated with the production of several commodities simultaneously since joint production in the household is likely to be pervasive the critique by pollak and wachter cannot be ignored in response to the comment by william barnett pollak and wachter 1977 suggest dispensing with the notion of commodity prices and treating the demand for commodities as a function of goods prices this approach confounds tastes and technology but it eliminates the troublesome concept of commodity prices as parameters when in fact they are likely to be endogenous in this paper we show that results from positive analysis such as the critique by pollak and wachter have implications for the use of the household production framework for welfare analysis the household production function approach has had considerable appeal for measuring welfare effects of public actions in the environmental and natural resource areas gardner brown john charbonneau and michael hay elizabeth wilman yet traditional approaches to welfare measurement are frequently inapplicable we argue that welfare measurement in this framework is complicated by the difficulties of unravelling tastes and technology we extend pollak and wachter s results by demonstrating that marshallian demand functions for commodities cannot be uniquely defined thus marshallian functions cannot be used to derive exact compensated functions in the manner of jerry hausman and of george mckenzie and i f pearce nor can compensating and equivalent variation measures be bounded by marshallian consumer s surplus estimates following robert willig in fact duality results that normally allow us to move between marshallian and hicksian functions are not assistant and associate professors respectively department of agricultural and resource economics university of maryland college park md 20742 this paper is scientific article no a3404 contribution no 6476 of the maryland agricultural experiment station we wish to thank darrell hueth james opaluch v kerry smith and elizabeth wilman for comments on an earlier draft

the fee structure in franchising a property rights view abstract the paper offers a property rights explanation for the structure of royalties and initial fees in franchise relationships we argue that the structure of royalties and fees depends on the distribution of intangible assets between the franchisor and franchisee contrary to the agency theory our property rights approach predicts a positive relationship between royalties and fees this hypothesis was tested by using data from the austrian franchise sector

endogenously chosen travel costs and the travel cost model an application to mountain biking at moab utah the travel cost model is frequently used to estimate net willingness to pay for recreation at remote sites by using the visitor s travel costs as a proxy for the price of recreation however some concern has been raised over the validity of using the visitor s stated travel costs as a proxy for price this paper addresses some of these concerns by examining the possible over estimation of consumer surplus due to endogenously chosen travel costs this paper extends past theoretical work for the linear model by developing a correction for endogenously chosen travel costs in more commonly used nonlinear models such as the poisson or count data model also provided is the first empirical test of the presence of endogeneity and an estimate of the magnitude of the error from ignoring endogeneity in travel costs after applying this test and the correction to data that was gathered for mountain biking at moab utah the estimate of consumer surplus falls from us 153 to us 135 which is a 12 reduction

special drawing rights from a situation as late as 2008 when they were largely unfashionable special drawing rights sdr s have become the centre of attention in discussions about a reformed international monetary system the g20 and the international monetary fund imf have backed a significant additional allocation of sdrs and china and the united nations have suggested that this should be followed up with more substantial reforms that diminish the role of the dollar and enhance that of the sdr these proposals would incorporate a substitution account that allows holders of dollars to swap them into sdr s but they see this as only one step towards establishing an sdr based system this article assesses the issues involved and the contemporary political economy of such proposals placing them in historical context it contemplates the likely evolution of the international monetary system and examines the extent to which the sdr is likely to come back fully into fashion

reforming imf conditionality as it has for many years international monetary fund conditionality is currently receiving much attention in the context of the global financial crisis at the beginning of the 2000s the fund introduced a policy of streamlining intended to reduce the amount of conditionality and refocus it with a view to increasing country ownership and improving programme implementation this article uses the results of a report by the imf s independent evaluation office into structural conditionality to assess the extent to which the initiative delivered on its promises more significant seem to be the recent changes associated with the global crisis the article discusses the evolution of conditionality and assesses the current situation and the prospects for the future

the political economy of the european economic and monetary union political sources of an economic liability emu would be an economic liability a single currency would cause at most small trade and investment gains but would raise average cyclical unemployment and possibly raise inflation perpetuate structural unemployment and increase the risk of protectionism emu is nevertheless being pursued in order to create a political union fundamental disagreements among member states about economic policies foreign and military policies and the sharing of political power are likely to create future intra european conflicts a united europe would be a formidable participant in the twenty first century s global balance of power with uncertain consequences for world stability and peace

on measuring existence value the prevailing consensus that existence value can only be measured by contingent valuation is questioned the concern is over pure existence value a change in welfare when a public good changes that leaves no trace in behavior pure existence value may well be more a consequence of the simple models used to characterize nonuse value than a reflection of how people value public goods if so nonuse value can in principle be obtained from observing behavior as well as from asking questions which offers a prospect for cross checks and corroboration using both approaches some possibilities for empirical measurement are suggested

collective invention during the british industrial revolution the case of the cornish pumping engine in this paper we argue that together with individual inventors and firms what robert c allen 1983 has termed as collective invention settings that is settings in which rival firms freely release each other pertinent technical information were also a crucial source of innovation in the industrial revolution period until now this has been very little considered in the literature this paper focuses on one of these cases the cornish mining district in cornwall during the early nineteenth century a notable collective invention setting gradually emerged this case is particularly remarkable because it was capable of generating a continuous and sustained flow of improvements in steam pumping technology which in the end greatly contributed to improve the thermodynamic efficiency of the steam engine in this paper we study in detail the specific economic circumstances that led to the formation of this collective invention setting and we analyses its consequences for the rate of technological innovation

a difficulty with the travel cost method instead of observable prices of recreational visits travel cost method tcm re searchers are obliged to substitute researcher assigned visitation cost estimates i argue that visitation costs are inherently subjective but are ordinally measurable so long as the cost in creases with distance travelled it follows that traditional tcm yields only ordinally measur able welfare estimates the household produc tion function formulation of tcm resolves this problem only by imposing severe and un testable analytical restrictions tcm cannot serve as a stand alone technique for estimating recreation benefits rather it must be calibrated using information generated with fundamentally different methods jel q26

an analysis of joint costs in a managed forest ecosystem abstract this paper analyzes the tenability of line item budgeting and independently determined output costs for a managed forest ecosystem the general problem of cost allocation in a joint production system is discussed as one of choosing paths of integration a production structure is hypothesized for describing a managed forest ecosystem and its characteristics of jointness are discussed finally an empirical case example is presented which indicates that cost estimates and associated means of production which result from single output costing procedures and from joint costing procedures may be significantly different in a managed forest ecosystem