forecasting the adoption of residential ductless heat pumps energy efficient technologies have the potential to provide savings to households and utilities but consumers do not always adopt these innovations over traditional technologies the ductless heat pump dhp is one such technology designed to increase energy efficiency and comfort in space conditioning dhp adoption by single family residences in the pacific northwest of the united states is investigated by quantifying the effects of utility provided rebates and expenditures on activities such as advertising and installer training on the number of installations and forecasting installations through 2018 the number of installations is elastic with respect to net installation costs and inelastic with respect to expenditures given the proposed rebate budgets doubling the current rebate is necessary to maximize installations through 2018

comparing alternative models of heterogeneity in consumer choice behavior summary when modeling demand for differentiated products it is vital to adequately capture consumer taste heterogeneity but there is no clearly preferred approach here we compare the performance of six alternative models currently the most popular are mixed logit mixl particularly the version with normal mixing n mixl and latent class lc which assumes discrete consumer types recently several alternative models have been developed the generalized multinomial logit g mnl extends n mixl by allowing for heterogeneity in the logit scale coefficient scale heterogeneity logit s mnl is a special case of g mnl with scale heterogeneity only the mixed mixed logit mm mnl assumes a discrete mixture of normals heterogeneity distribution finally one can modify n mixl by imposing theoretical sign constraints on vertical attributes we call this t mixl we find that none of these models dominates the others but g mnl mm mnl and t mixl typically outperform the popular n mixl and lc models copyright 2012 john wiley sons ltd

the generalized multinomial logit model accounting for scale and coefficient heterogeneity the mixed or heterogeneous multinomial logit mixl model has become popular in a number of fields especially marketing health economics and industrial organization in most applications of the model the vector of consumer utility weights on product attributes is assumed to have a multivariate normal mvn distribution in the population thus some consumers care more about some attributes than others and the iia property of multinomial logit mnl is avoided i e segments of consumers will tend to switch among the subset of brands that possess their most valued attributes the mixl model is also appealing because it is relatively easy to estimate recently however some researchers have argued that the mvn is a poor choice for modelling taste heterogeneity they argue that much of the heterogeneity in attribute weights is accounted for by a pure scale effect i e across consumers all attribute weights are scaled up or down in tandem this implies that choice behaviour is simply more random for some consumers than others i e holding attribute coefficients fixed the scale of their error term is greater this leads to a scale heterogeneity mnl model s mnl here we develop a generalized multinomial logit model g mnl that nests s mnl and mixl by estimating the s mnl mixl and g mnl models on 10 data sets we provide evidence on their relative performance we find that models that account for scale heterogeneity i e g mnl or s mnl are preferred to mixl by the bayes and consistent akaike information criteria in all 10 data sets accounting for scale heterogeneity enables one to account for extreme consumers who exhibit nearly lexicographic preferences as well as consumers who exhibit very random behaviour in a sense we formalize below

note on managing multi echelon multi item channels with trade allowances under credit period abstract in the recently published paper tsao 2010 managing multi echelon multi item channels with trade allowances under credit period international journal of production economics 127 226 237 a supplier retailer inventory system with multiple items is studied where the supplier provides an interest free credit period for the retailer to compensate him for making promotional efforts to stimulate the demand for each item however as shown in this note there exist some nontrivial flaws in tsao s paper we identify and correct these flaws and develop efficient algorithms to derive the optimal solutions

optimal fiscal policy in a business cycle model with public capital in this paper a real business cycle model with optimal tax rates government borrowing and productive public capital is analysed a specification that allows for multiple stochastic shocks to technology and preferences can reproduce some key features describing the cyclical behaviour of postwar u s fiscal policy the optimally chosen policy variables fluctuate substantially over the business cycle but they do not operate like automatic stabilizers jel classification e62 e32 politiquefiscale optimale dans un modee de cycle d affaires avec capital public ce m6moire analyse un modele de cycle d affaires r6el avec taux d imposition optimaux emprunts gouvernementaux et capital public productif une sp6cification de ce modele qui enregiste plusieurs chocs stochastiques affectant technologie et pr6f6rences peut reproduire quelquesunes des caract6ristiques d6crivant le comportement cyclique de la politique fiscale d apres guerre des etats unis les variables correspondant a la politique optimale choisie fluctuent substantiellement au cours du cycle mais n operent pas comme des stabilisateurs automatiques

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

energy efficiency and financial literacy abstract financial literacy explains anomalies in a wide range of consumers financial decisions we extend the literature on financial literacy by examining its role in the purchase of energy consumer durables a setting purported to suffer from sub optimal levels of investment due to consumer mistakes we augment a standard choice experiment for purchasing a hot water system with data on financial literacy financial literacy is an economically important and statistically significant determinant of investment in energy efficiency this result is robust to incorporating individual discount rates and risk aversion as well as standard controls such as income and education indicating that financial literacy is not merely a proxy for standard demographic characteristics financial literacy also makes choices more consistent with standard consumer preferences and increases the probability that respondents select investments with the lowest lifetime discounted costs the results establish low financial literacy as a mechanism driving low investment in energy efficiency

economic efficiency of solar hot water policy in new zealand new zealand has recently followed the path of several other countries in promoting solar hot water shw systems in the effort to reduce greenhouse gas emissions yet the economic efficiency of large scale policies to encourage shw remains a pressing question for policymakers this paper develops an economic framework to examine policies to promote shw in new zealand including the current information training and subsidy policy the economic framework points to environmental energy security and average cost electricity retail pricing market failures as motivation for shw policy with the global climate change externality the most important of these the results indicate that domestic shw systems are close to being financially attractive from a consumer perspective but a more substantial subsidy policy would be necessary for shw to appeal to a wider audience such a policy is far more likely to have positive net benefits than a policy of mandating shw on all homes or all new homes in new zealand and could be justified on economic efficiency grounds under reasonable assumptions however this result reverses under an economy wide carbon trading system that internalizes the environmental externality

is there an energy efficiency gap many analysts have argued that energy efficiency investments offer an enormous win win opportunity to both reduce negative externalities and save money this overview paper presents a simple model of investment in energy using capital stock with two types of market failures first uninternalized externalities from energy consumption and second forces such as imperfect information that cause consumers and firms not to exploit privately profitable energy efficiency investments the model clarifies that only if the second type of market failure cannot be addressed directly through mechanisms such as information provision energy efficiency subsidies and standards may be merited this chapter therefore reviews the empirical work on the magnitude of profitable unexploited energy efficiency investments a literature which frequently does not meet modern standards for credibly estimating the net present value of energy cost savings and often leaves other benefits and costs unmeasured these problems notwithstanding recent empirical work in a variety of contexts implies that on average the magnitude of profitable unexploited investment opportunities is much smaller than engineering accounting studies suggest finally there is tremendous opportunity and need for policy relevant research that utilizes randomized controlled trials and quasi experimental techniques to estimate the returns to energy efficiency investments and the welfare effects of energy efficiency programs

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 note on lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand glock 2012 lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand international journal of production economics 136 37 44 recently presented an integrated inventory model where the lead time can be reduced by crashing the setup and transportation time by increasing the production rate or by decreasing the lot size in this note we introduce a more realistic lead time crashing cost and propose a modified integrated inventory model by adding the transportation time as a decision variable and assuming that there are two different safety stocks furthermore we give some numerical examples to illustrate the advantages of the modified model

optimal taxation economic growth and income inequality that there is a trade off between equityand efficiency economic growth is wellknown two models have been developed thatlink government spending and taxation toeconomic growth this paper uses thesemodels to provide estimates of thegrowth maximizing tax rate then a twoequation structural model is developed andestimated that is used to find thetrade off rate between economic growth andincome inequality and the growth maximizinglevel of income inequality for the unitedstates over the period 1960 1990

a note on integrated single vendor single buyer model with stochastic demand and variable lead time abstract ben daya and hariga 2004 integrated single vendor single buyer model with stochastic demand and variable lead time international journal of production economics 92 75 80 recently proposed the paper about integrated single vendor single buyer model with stochastic demand and variable lead time the lead time is proportional to the lot size produced by the vendor in addition to a fixed delay due to the transportation setup and nonproductive time the end customers accept backorders when the shortage occurs at the buyer side an order to the vendor is placed each time the inventory level reaches the reorder point in this note a modified model is proposed under a different assumption that there are two different reorder points and service levels

joint economic lot sizing problem for a three layer supply chain with stochastic demand abstract this paper considers the joint economic lot sizing problem jelp for multi layer supply chain with multi retailers and single manufacturer and supplier the paper extends the work of ben daya et al 2013 and relaxes the assumption of deterministic demand and constant holding and ordering costs the paper proposes modifying four computational intelligent algorithms to solve mixed integer problems and compares their performance for solving the problem at hand the paper further compares between adopting a centralized safety stock policy versus a decentralized policy results showed cuckoo search to outperform other tested algorithms and also favored adopting a centralized policy

green transition of energy systems in rural china national survey evidence of households discrete choices on water heaters abstract energy systems in rural china are experiencing a transition from traditional fossil fuels to renewables this paper aims to investigate the potential factors that influence the choices of rural residents regarding water heaters with a focus on the low carbon transition to solar water heating systems to this end a face to face questionnaire survey is undertaken with 3404 rural households randomly selected among 12 representative provinces a comprehensive set of discrete choice modelling approaches were used the empirical results show that 1 sociodemographic variables have significant effects on residents first stage choice of a water heater to buy or not to buy but few effects on the second stage decision to choose electric lpg or solar water heaters which type to buy 2 information spillover is important to facilitate the usage of water heaters particularly of solar products 3 the electricity price which is regulated at a very low rate has no apparent effect on the choice of solar water heaters 4 government subsidy has a significant effect in the first stage but no differentiated effect on the decision choice in the second stage policy and managerial implications are presented to speed up the ongoing low carbon transition of energy systems in china

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

lot sizing and lead time decisions in production inventory systems traditionally lot sizing decisions in inventory management trade off the cost of placing orders against the cost of holding inventory however when these lot sizes are to be produced in a finite capacity production inventory system the lot size has an important impact on the lead times which in turn determine inventory levels and costs in this paper we study the lot sizing decision in a production inventory setting where lead times are determined by a queueing model that is linked endogenously to the orders placed by the inventory model assuming a continuous review s s inventory policy we develop a procedure to obtain the distribution of lead times and the distribution of inventory levels when lead times are endogenously determined by the inventory model this procedure allows to determine the optimal inventory parameters within the class of s s policies that minimize the expected ordering and inventory related costs over time we numerically show that ignoring the endogeneity of lead times may lead to inappropriate lot sizing decisions and significantly higher costs this cost discrepancy is very outspoken if the lot size based on the economic order quantity deviates significantly from desirable production lot sizes in these cases the endogenous treatment of lead times is of particular importance

willingness to pay for renewable energy primary and discretionary choice of british households for micro generation technologies this paper documents the policy context of renewable energy production in the european union the research adopts a choice experiment approach to investigate households wtp for these renewable energy technologies in the uk the micro generation technologies comprise solar photovoltaic micro wind solar thermal heat pumps and biomass boilers and pellet stoves the study compares the results from conditional and mixed logit models which estimate the distribution of utility coefficients and then derives wtp values as a ratio of the attribute coefficient to the price coefficient with a model in which the wtp distribution is estimated directly from utility in the money space the results suggest that whilst renewable energy adoption is significantly valued by households this value is not sufficiently large for the vast majority of households to cover the higher capital costs of micro generation energy technologies

integrated single vendor single buyer model with stochastic demand and variable lead time abstract in this paper we consider the single vendor single buyer integrated production inventory problem we relax the assumption of deterministic demand and assume that the lead time is varying lineraly with the lot size the lead time is composed of a lot size dependent run time and constant delay times such as moving waiting and setup times a solution procedure is suggested for solving the proposed model and numerical examples are used to illustrate the benefit of integration a sensitivity analysis is also performed to explore the effect of key parameters on lot size reorder point and expected total cost

a co ordination model combining incentive scheme and co ordination policy for a single vendor multi buyer supply chain abstract incentive scheme and co ordination policy are substantial components for the co ordination of a decentralized supply chain system but there is little work combining the two components as a single decision model li and wang 2007 this paper proposes a model which incorporates both incentive and co ordination issues into a single co ordination model for a single vendor multi buyer supply chain in the proposed model the co ordination is achieved by synchronizing ordering and production cycles while price discount which is based on the buyers order intervals is used as the incentive to motivate buyers to participate in the co ordination while the vendor is benefited from the co ordination by synchronized cycles the proposed price discount scheme can guarantee that a buyer s total relevant cost of co ordination will be reduced when compared with independent optimization more importantly the proposed price discount scheme does not require any cost information from the buyers

current real business cycle theories and aggregate labor market fluctuations hours worked and the return to working are weakly correlated traditionally the ability to account for this fact has been a litmus test for macroeconomic models existing real business cycle models fail this test dramatically we modify prototypical real business cycle models by allowing government consumption shocks to influence labor market dynamics this modification can in principle bring the models into closer conformity with the data our empirical results indicate that it does

on low frequency estimates of long run relationships in macroeconomics abstract a number of recent studies have attempted to test propositions concerning long run economic relationships by means of frequency domain time series techniques that concentrate attention on low frequency comovements of variables the present paper emphasizes that many of these propositions involve expectational relationships that are not inherently related to specific frequencies or periodicities thus the association of low frequency time series test statistics with long run economic propositions is not generally warranted that such an association can be misleading is demonstrated by analysis of examples taken from notable papers by geweke lucas and summers

state infrastructure and productive performance recent research on productivity growth has focused on public infrastructure and its impact on economic growth and productivity the authors construct a model of firms technology and behavior taking advantage of the analytical framework provided in the cost function based applied production theory literature and apply it to state level data for u s manufacturing they find that infrastructure investment provides a significant return to manufacturing firms and augments productivity growth the net benefits of infrastructure investment may or may not be positive depending upon the social costs of infrastructure investment and the relative growth rates of output and infrastructure copyright 1996 by american economic association

a banking explanation of the us velocity of money 1919 2004 the paper shows that us gdp velocity of m1 money has exhibited long cycles around a 1 25 per year upward trend during the 1919 2004 period it explains the velocity cycles through shocks constructed from a dsge model and annual time series data ingram et al 1994 model velocity is stable along the balanced growth path which features endogenous growth and decentralized banking hat produces exchange credit positive shocks to credit productivity and money supply increase velocity as money demand falls while positive goods productivity shock raises temporary output and velocity the paper explains such velocity volatility at both business cycle and long run frequencies with filtered velocity turning negative starting during the 1930s and the 1987 crashes and again around 2003 results suggest that the money and credit shocks appear to be more important for velocity during less stable times and the goods productivity shock more important during stable times

a bottleneck capital model of development abstract a simple augmentation of the ramsey cass koopmans growth model allows it to match observed transitions by initially poor economies a high convexity installation cost directly dampens investment demand for a first capital input the resulting scarcity acts as a bottleneck strongly dampening demand for investment in a complementary capital input as well the match to observed transitions holds both for narrow and broad interpretations of capital in either case the bottleneck capital s share of factor income need not be large

productive government expenditures and long run growth the purpose of this paper is to review some of the recent developments in endogenous growth models specifically our focus is on the growth effects of productive government spending in dynamic general equilibrium models we use a simple overlapping generations model as our basic framework and illustrate the role of taxes and spending we then examine several related issues nonrivalry in publicly provided goods existence and uniqueness of competitive equilibrium endogenous public policy ways of financing public expenditures composition of publicly provided goods and services and private alternatives finally we review some empirical results related to output elasticity of public capital and educational expenditures

note comments on a quantity discount pricing model to increase vendor profits monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci june 720 726 adapted the quantity discount model of inventory theory to the problem of determining an optimal quantity discount schedule from a vendor s point of view and opened up an important direction of research however his one item one customer one vendor model is based on several implicit assumptions that must be judged unreasonable monahan must account for the vendor s inventory carrying charges and redefine his variable s2 it is shown that a rational vendor s manufacturing frequency would not be identical to the buyer s ordering frequency if the vendor s manufacturing setup costs are substantially larger than the buyer s ordering costs a numerical example presented in this note also questions the practical usefulness of monahan s model even after its theoretical inaccuracies axe corrected monahan s model may explain discounts that are a fraction of 1 of the price of an item but it fails to explain commonly observed magnitudes of quantity discounts such as 10 of the unit price

empirical estimates of the direct rebound effect a review beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed 2008 elsevier ltd all rights reserved

utility in willingness to pay space a tool to address confounding random scale effects in destination choice to the alps we compare two approaches for estimating the distribution of consumers willingness to pay wtp in discrete choice models the usual procedure is to estimate the distribution of the utility coefficients and then derive the distribution of wtp which is the ratio of coefficients the alternative is to estimate the distribution of wtp directly we apply both approaches to data on site choice in the alps we find that the alternative approach fits the data better reduces the incidence of exceedingly large estimated wtp values and provides the analyst with greater control in specifying and testing the distribution of wtp copyright 2008 oxford university press

integrated vendor buyer cooperative models with stochastic demand in controllable lead time abstract this article presents the single vendor single buyer integrated production inventory models we relax the assumption that lead time demand x is deterministic and assume that it is stochastic also we assume that shortage during the lead time is permitted and lead time can be reduced at an added cost two models are considered here in the first model the demand of lead time follows a normal distribution and in the second model it is distribution free for both cases we develop effective iterative procedures for finding the optimal policy and numerical examples are used to illustrate the benefits of integration

public investment in infrastructure in a simple growth model abstract in this paper we examine the implications for capital accumulation when infrastructure enters as an external input into private production functions in our model infrastructure is nonexclusive but may exhibit varying degrees of nonrivalry revenues from uniform taxes on capital and labor income are used to finance public investment in infrastructure we show that the optimal tax rate is independent of the degree of nonrivalry when production exhibits constant returns to augmentable factors the equilibrium displays constant growth for most parameters the growth rate depends on the population size under decreasing returns the optimal trajectory exhibits monotonic convergence to a steady state level

self selection bias in the evaluation of voluntary energy conservation programs while voluntary energy conservation programs have been extensively promoted by electric utilities and public utility commissions their effectiveness has been insufficiently critiqued this paper contributes to the growing evaluation of such programs by measuring the net energy savings directly attributable to an actual set of programs the analysis explicitly corrects for the self selection bias that can arise in program evaluation the correction is found to be important traditional evaluation methods are subject to considerable bias correcting for this bias the amount of program induced energy savings is found to be considerably less than traditionally believed copyright 1988 by mit press

transitional dynamics in an r d based growth model with imitation comparing its predictions to the data abstract employing cross country data this paper evaluates the transitional dynamics predictions of a non scale growth model of endogenous technology innovation and imitation we show that unlike the neoclassical growth framework the transitional dynamics of the rd 1995 quartely journal of economics 110 641 680 with the importance of technology transfer

privatization and economic growth in australia the shorthand of a long process the impact of privatization on economic growth has been little investigated relative to disaggregated approaches a growth accounting framework is used here to investigate the impact of privatization on growth for the australian economy the contribution of public capital to the private sector and whether the growth process is endogenous or solow is evaluated separate measures of public and private capital are computed in order to estimate their impacts with labour on australian gross domestic product gdp growth for the period 1960 to 2003 a simple growth rates version is found preferred by stationarity and other tests labour growth appears to strongly positively influence the growth of gdp in contrast public capital growth has no statistically significant effect on gdp growth or on private capital productivity the data are consistent with the hypothesis that the coefficients of the growth equation are the same before and during privatization

improved quality setup cost reduction and variable backorder costs in an imperfect production process abstract this paper illustrates the relationship between quality improvement reorder point and lead time as affected by backorder rate in an imperfect production process to reduce the total system cost by optimizing the setup cost lot size lead time reorder point and process quality parameter simultaneously we first consider that the lead time demand follows a normal distribution then we apply the distribution free approach for the lead time demand we prove two lemmas which are used to find optimal solutions for the basic and distribution free models we compare our models with the existing models using numerical examples and show that significant savings over the existing models can be achieved

average marginal tax rates from social security and the individual income tax we extend previous estimates of the average marginal tax rate from the federal individual income tax to include social security our computations consider the tax rates on employers employees and the self employed the income that accrues to persons with earnings below the ceiling and the effective deductibility of employers social security contributions from workers taxable income the next effect of social security on the average marginal tax rate is below 02 until 1966 but then rises to 03 in 1968 04 in 1973 05 in 1974 06 in 1979 and 07 in 1982 this abstract was borrowed from another version of this item

energy efficiency economics and policy energy efficiency and conservation are major factors in the reduction of the environmental impact of the energy sector particularly with regard to climate change energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain in this paper we discuss the factors that influence energy efficiency and conservation decisions and the most appropriate policies for their promotion although not all public policies seem justified we argue that specific policies for promoting energy conservation may be required preferably based on economic instruments or on the provision of information to consumers

solving optimal growth models with vintage capital the dynamic programming approach this paper deals with an endogenous growth model with vintage capital and more precisely with the ak model proposed in r boucekkine o licandro l a puch f del rio vintage capital and the dynamics of the ak model j econ theory 120 1 2005 39 72 in endogenous growth models the introduction of vintage capital allows to explain some growth facts but strongly increases the mathematical difficulties so far in this approach the model is studied by the maximum principle here we develop the dynamic programming approach to the same problem by obtaining sharper results and we provide more insight about the economic implications of the model we explicitly find the value function the closed loop formula that relates capital and investment the optimal consumption paths and the long run equilibrium the short run fluctuations of capital and investment and the relations with the standard ak model are analyzed finally the applicability to other models is also discussed

consumer choice on ecologically efficient water heaters marketing strategy and policy implications in japan abstract this study examines how consumers select ecologically efficient water heaters in japan energy conservation in household water heating is increasingly important for reducing an amount of co 2 emission because the share of water heating in household energy consumption is approximately 30 recently japanese households have widely used ecologically efficient electric heat pump water heaters eco cute or gas fired water heaters eco jozu the total number of such efficient water heaters sold in japan was more than 2 5 million at the end of 2008 this study investigates various factors and impacts of marketing strategy for promoting the appliances in japan we apply mixed and nested logit models to a disaggregated choice data on water heaters from 2004 to 2008 this study considers retail energy prices a government financial support and marketing activities as important factors for appliance selection in addition we consider consumers housing attributes such as floor space and age of building this empirical study finds two business implications one of the two implications is that an increase in an energy price may enhance a choice probability of eco cute and eco jozu because a price increase invites consumer s consciousness on energy conservation so that a cost reduction on energy consumption becomes essential in a use of the efficient appliances the other implication is that marketing activities especially by recommendations from sales representatives and or housing suppliers are important for consumer behaviors the other important findings are discussed in this study this business experience in japan is useful to the other countries where ecologically efficient water heaters are not popular at the current moment

production growth and business cycles ii new directions abstract this paper outlines new directions for investigations of real business cycle models consideration of stochastic growth of exogenous and endogenous forms analysis of suboptimal outcomes arising due to externalities of distorting taxes and implications of labor market heterogeneity

public sector capital and the productivity puzzle a number of studies have suggested a quantitatively important relationship between public sector capital accumulation and private sector productivity with the most compelling evidence derived from analyses of state level data estimates herein of production functions that use standard techniques to control for unobserved state specific characteristics however reveal essentially no role for public sector capital in affecting private sector productivity only estimates of state production functions that do not include such controls find substantial productivity impacts this result reconciles existing econometric estimates with the findings of hulten and schwab based on growth accounting techniques as such techniques effectively control for state specific effects region level estimates are essentially identical to those from state data suggesting no quantitatively important spillover effects across states copyright 1994 by mit press

roads to prosperity assessing the link between public capital and productivity does the positive correlation between infrastructure and productivity reflect causation if so in which direction the author finds that when growth in roads the largest component of infrastructure changes productivity growth changes disproportionately in u s industries with more vehicles that vehicle intensive industries benefit more from road building suggests that roads are productive at the margin however road investments do not appear unusually productive intuitively the interstate system was highly productive but a second one would not be road building thus explains much of the productivity slowdown through a one time unrepeatable productivity boost in the 1950s and 1960s

time series evidence on the nonlinearity hypothesis for public spending i introduction endogenous growth theories differ from exogenous growth theories with respect to their assumed relationships between economic growth and policy variables in contrast to their exogenous counterparts endogenous growth theories suggest various channels through which growth can be affected by government policies one of these channels is assumed to be due to supply side effects of productive public spending on infrastructure human capital accumulation legal protection and so on which can be viewed as factors for private production therefore increases in productive public spending will increase the economy s overall productivity and thus enhance growth empirical cross country studies investigating the relationship between government and growth such as ram 1986 barro 1991 easterly and rebelo 1993 and levine and renelt 1992 have produced rather ambiguous results ranging from inconclusive to contradictory an explanation for the failure to empirically resolve this issue could be that the relationship is nonlinear in nature as is suggested by the endogenous growth models like that of barro 1990 empirical studies that do not account for such nonlinearities may easily lead to inconclusive if not misleading answers to the question of how fiscal policy affects economic growth by incorporating productive public spending into the production function barro 1990 demonstrates theoretically that the relationship between growth and government size i e the share of public spending in gross domestic product gdp may well be nonmonotonic in this case an optimal growth maximizing government size may exist such that additional public spending increases decreases growth if the government size is below above the optimum this result known as the nonlinearity hypothesis has also been suggested in the theoretical analyses of barro and sala i martin 1992 glomm and ravikumar 1994 lau 1995 and devarajan et al 1996 among others empirical studies investigating the optimal government size like barro 1990 devarajan et al 1996 kelly 1997 and karras 1993 1996 1997 rely on cross country data so does dowrick 1996 the only study explicitly examining the validity of the nonlinearity hypothesis these empirical studies assume that all countries have the same optimal government size and thus are notable to identify the individual countries optimal fiscal policy or the consequences from changes in government size in this article we derive implications of the nonlinearity hypothesis for time series models by investigating time series data of an individual country one can examine the validity of the nonlinearity hypothesis and analyze the country s fiscal policy jones 1995 kocherlakota and yi 1996 1997 and evans 1997 characterize endogenous growth models by the property that a permanent change in policy variables leads to a permanent change in the growth rate if growth effects due to changes in public spending depend on the deviation of public spending from its optimal level as the nonlinearity hypothesis suggests growth effects induced by a change in public spending should vary as government size varies unless the optimal spending level varies accordingly conducting time series studies jones 1995 evans 1997 and karras 1998 1999 conclude against endogenous growth which contrasts the conclusions of kocherlakota and yi 1996 1997 however by relying on linear models all these studies force growth effects from public policy to be constant therefore they prevent any analysis of nonlinear endogenous growth phenomena as implied by barro type models as we will argue if the nonlinearity hypothesis holds results from linear models may in fact be misleading the empirical analysis presented herein is based on quarterly west german time series data and examines two types of public spending public investment and public consumption as a proxy for productive public spending

optimal fiscal policy public capital and the productivity slowdown abstract this paper develops a quantitative theoretical model for the optimal provision of public capital we show that the ratio of public to private capital in the us economy since 1925 evolves in a manner that is broadly consistent with an optimal transition path derived from a simple growth model the model is used to quantify the conditions under which an increase in the stock of public capital is desirable and to investigate the degree to which nonoptimal fiscal policies can account for the us productivity slowdown

willingness to pay for energy saving measures in residential buildings this paper uses a choice experiment to evaluate the consumers willingness to pay for energy saving measures in switzerland s residential buildings these measures include air renewal ventilation systems and insulation of windows and facades two groups of respondents consisting respectively of 163 apartment tenants and 142 house owners were asked to choose between their housing status quo and each one of the several hypothetical situations with different attributes and prices the estimation method is based on a fixed effects logit model the results suggest that the benefits of the energy saving attributes are significantly valued by the consumers these benefits include both individual energy savings and environmental benefits as well as comfort benefits namely thermal comfort air quality and noise protection

using an error correction model to test whether endogenous long run growth exists abstract a major empirical interest in growth studies is whether permanent changes in economic fundamentals affect the long run growth rate or not however a direct time series analysis of this hypothesis may not always be feasible because the permanence of many such changes is rather questionable this paper explains why examining the long run effects of temporary changes in investment share on per capita output provides indirectly the answer regarding the effects of possibly hypothetical permanent changes in investment share when log per capita output and log per capita investment are cointegrated applying the proposed method to the post war data of major industrial countries it is found that a disturbance to investment share does not produce a positive long run effect in each of the three countries france japan and the united kingdom in which log per capita output and log per capita investment are cointegrated the evidence is unfavorable to the class of endogenous growth models

are the direct and indirect growth effects of remittances significant development economists believe that migrant workers remittances are an important source of funds for long run growth therefore recent studies have investigated the growth effects of remittances and reached different conclusions in many such studies the growth of output is simply regressed on both remittances and the channels through which remittances affect growth thus there is no distinction between the indirect and direct growth effects of remittances and such specifications may give unreliable estimates because of the correlation between the channels and remittances in this paper we make a distinction between the indirect and direct effects of remittances our model is estimated with panel data of 40 high remittance recipient countries and a system gmm panel data estimation method

is public expenditure productive abstract this paper considers the relationship between aggregate productivity and stock and flow government spending variables the empirical results indicate that i the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending ii military capital bears little relation to productivity and iii a core infrastructure of streets highways airports mass transit sewers water systems etc has most explanatory power for productivity the paper also suggests an important role for the net public capital stock in the productivity slowdown of the last fifteen years

inflation human capital and tobin s q a pervasive empirical finding for the us economy is that inflation is negatively correlated with the normalized market price of capital tobin s q and growth a dynamic stochastic general equilibrium model of endogenous growth is developed to explain these stylized facts in this model human capital is the principal driver of self sustained growth long run comparative statics analysis suggests that inflation diverts scarce time resource to leisure which lowers human capital utilization this impacts growth adversely and modulates capital adjustment cost downward resulting in a decline in tobin s q for the short run a tobin effect of inflation on growth weakens the negative association between inflation and q

equilibrium pricing and lead time decisions in a competitive industry pricing and lead time are two crucial decisions to a success in today s competitive markets this paper examines the equilibrium pricing and lead time decisions in a duopoly industry consisting of two large and several smaller firms with competition we solve the sufficient karush kuhn tucker kkt optimality conditions for the nash equilibrium solution we characterize the existence and uniqueness of the nash equilibrium solution of pricing and lead time decisions for both homogenous and heterogeneous firms our case study provides important managerial insights about firms behavior under price and lead time competition in a semiconductor manufacturing industry

inventory control in a lost sales setting with information about supply lead times abstract supply chain collaboration using advancements in information technology is on the rise and this includes sharing of information between suppliers and buyers in this paper we study the value of information about the development of supply lead times from a buyer s perspective we consider a periodically reviewed single item inventory system in a lost sales setting where at most one order can be outstanding at a time we compare the performance of an inventory model assuming informed lead times to a model assuming uninformed independent and identically distributed lead times we employ the dynamic programming approach to find the best state dependent ordering policy to minimize the expected average total cost per time unit our numerical results show that acquiring information about the development of supply lead times is of value in general the best policy suggested by the model assuming informed lead times causes lower average cost than the model assuming uninformed lead times

renewable energy adoption in an ageing population heterogeneity in preferences for micro generation technology adoption abstract many countries are endeavouring to supply more of their energy from renewable resources such countries are also experiencing an aging population with a greater proportion of people aged 65 years this demographic shift may reduce the uptake of renewable energy if older person households are less inclined to accept change and adopt new technologies this paper assesses whether such households have different behavioural responses to energy efficiency compared to the rest of society and investigates whether micro generation renewable energy technologies are less likely to be adopted by these households it uses conditional logit and mixed logit models to investigate the impact of age of household on primary heating adoption and also to assess the impact of older households on the installation of discretionary micro generation technologies solar thermal solar voltaic and wind power to supplement existing heating and lighting systems results indicate that primary heating choice is not affected but that older person households are less inclined to adopt micro generation technologies

money and growth revisited abstract conventional wisdom is that if public policy can affect the growth rate of the economy the welfare implications of alternative policies will be large in this paper a stochastic dynamic general equilibrium model with endogenous growth and money is examined in this setting inflation lowers growth through its effect on the return to work however the welfare costs of higher inflation are modest the endogenous labor supply is important in producing this result

optimal vendor investment for reducing defect rate in a vendor buyer integrated system with imperfect production process this paper investigates a single vendor single buyer integrated production inventory model with stochastic demand and imperfect production process it is assumed that there is an inspection activity on the part of the buyer with a fixed screening rate greater than the demand rate the vendor invests money in order to improve the production process quality and reduce the number of defectives the expected annual integrated total cost is derived under the n shipment policy and an iterative procedure is suggested to determine the optimal decisions the benefit of investment in reducing the defect rate is illustrated by way of numerical examples it is observed that the higher the defect rate the more beneficial the investment numerical studies further explore that an increased demand requires an increased investment to optimize the total cost

fiscal policy in general equilibrium this paper studies four classic fiscal policy experiments within a quantitatively restricted neoclassical model the authors main findings are as follows 1 permanent changes in government purchases can lead to short run and long run output multipliers that exceed one 2 permanent changes in government purchases induce larger effects than temporary changes 3 the financing decision is quantitatively more important than the resource cost of changes in government purchases and 4 public investment has dramatic effects on private output and investment these findings stem from important dynamic interactions of capital and labor absent in earlier equilibrium analyses of fiscal policy copyright 1993 by american economic association

a single vendor single manufacturer integrated inventory model with stochastic demand and variable production rate abstract this paper investigates an alternative way to react to demand uncertainty in an integrated inventory model namely the variation of the production rate that enables the manufacturer to reduce lead times and the corresponding demand uncertainty to investigate the impact of variable production rates on the supply chain this paper considers a single vendor single manufacturer integrated inventory model where the vendor ships finished products in multiples of full truckloads to the manufacturer the objective of the model is to coordinate both production and distribution of the product in such a way that the total costs of the supply chain are minimized a solution procedure is suggested and the behaviour of the model is analysed in numerical examples obviously the total supply chain cost is reduced when the manufacturer s production rate is included as a decision variable in the model these savings can generally benefit both the vendor and the manufacturer however in situations where coordinated decision making is initially not beneficial to the vendor the supply chain members can benefit from a revenue sharing contract that supports the sharing of the total savings the model proposed in the paper at hand supports both the determination of an optimal production rate as well as the distribution of coordination benefits among the supply chain members

lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand this paper studies alternative methods for reducing lead time and their impact on the safety stock and the expected total costs of a q s continuous review inventory control system we focus on a single vendor single buyer integrated inventory model with stochastic demand and variable lot size dependent lead time and assume that lead time consists of production and setup and transportation time as a consequence lead time may be reduced by crashing setup and transportation time by increasing the production rate or by reducing the lot size we illustrate the benefits of reducing lead time in numerical examples and show that lead time reduction is especially beneficial in case of high demand uncertainty further our studies indicate that a mixture of setup time and production time reduction is appropriate to lower expected total costs

investing in reduced setups in the eoq model this paper is motivated by the observation that the japanese have devoted much time and energy to decreasing setup costs in their manufacturing processes and that there has been little in the way of a formal framework available to use to think about such efforts the object of this paper is to begin to provide such a framework the framework developed identifies only one aspect of the advantages of reducing setups namely reduced inventory related operating costs the other advantages such as improved quality control flexibility and increased effective capacity are not accounted for in this paper nevertheless substantial reductions in setups may be warranted based solely on the benefits identified in this paper the approach taken here introduces an investment cost associated with changing the current setup level and adds a per unit time amortization of this cost to the other costs identified in the standard eoq model the general problem becomes that of minimizing the sum of a convex and a concave function in two special cases the minimization can be carried out explicitly in one of these cases numerous interpretations of the results are made including comparisons of japanese and american practices for example holding other parameters constant there is a critical sales level such that investment is made in reducing setups if and only if the sales rate is above that level when such investment is made the optimal lot size is independent of the sales rate the paper also addresses the joint selection of the setup cost and the sales rate selection of the sales rate is seen as incorporating explicit production and holding costs into the classical monopolist s pricing problem an explicit solution is obtained for the model postulated

a simple time series test of endogenous vs exogenous growth models an application to the united states this paper presents evidence supporting endogenous growth models that emphasize public structural capital the authors apply a simple test of endogenous vs exogenous growth models in exogenous growth economies temporary innovations to policy variables lead only to temporary changes in gnp levels while in endogenous growth economies the innovations can lead to permanent changes in gnp levels of the seven u s policy variables they examine only non military equipment capital and non military structural capital have a statistically and economically significant effect upon long run gnp levels further estimation suggests that the non military equipment capital result is not robust and that several disaggregate components of structural capital contribute significantly copyright 1996 by mit press

crowding out or crowding in public and private investment in india abstract this paper contributes to the debate on the relationship between public and private investment in india along the following dimensions first acknowledging major structural changes that the indian economy has undergone in the past three decades we study whether public investment in recent years has become more or less complementary to private investment in comparison to the period before 1980 second we construct a novel data set of quarterly aggregate public and private investment in india over the period 1996 2015 using investment project data from the capex cmie database third embedding a theory driven long run relationship on the model we estimate a range of structural vector error correction models svecms to re examine the public and private investment relationship in india identification is achieved by decomposing shocks into those with transitory and permanent effects our results suggest that while public investment crowds out private investment in india over the period 1950 2012 the opposite is true when we restrict the sample to post 1980 or conduct a quarterly analysis since 1996 this change can likely be attributed to the policy reforms which started during the early 1980s and gained momentum after the 1991 crisis

erratum to lead time reduction strategies in a single vendor single buyer integrated inventory model with lot size dependent lead times and stochastic demand international journal of production economics 136 2012 37 44

the influence of rebate programs on the demand for water heaters the case of new south wales this paper examines the role of australian hot water system rebate programs in shifting the existing stock of electric water heaters toward more climate friendly versions using two unique data sets from new south wales homeowners the first data set is based on a survey of households who recently purchased a water heater before and after the rebate programs were in place the other is based on a set of stated preference questions asked of households soon to face a replacement decision while the former allows us to look at recent responses the latter enables us to forecast future demand we find that the programs significantly increase shares of solar heat pump systems the programs however appear less effective in reducing the stock of electric heaters for households with access to natural gas this pattern is consistent in both datasets results from the discrete choice experiments suggest considerable heterogeneity with respect to household preferences toward different types of water heaters and the discount rates they hold the effective cost of reducing carbon emissions via incentives for water heater replacement is considered from the counterfactual perspective of no government incentives