the impact of spatial patterns in road traffic externalities on willingness to pay estimates studying traffic related externalities in the city of gent belgium we find little to no evidence that observed spatial dependencies in actual objective externality levels play a direct role in determining spatial dependencies in the willingness to pay wtp for changes in the city s mobility policy investigating alternative factors that can influence wtp estimates however reveals that higher stated subjective externality levels are positively correlated with higher wtp for reducing exposure to noise air and odor pollution our results suggest complex interactions between housing decisions perceived externality levels and wtp estimates thus allowing for subjective perceptions sorting behavior and patterns in individuals characteristics can result in wtp estimates that are not spatially correlated even though the underlying externalities are spatially correlated

understanding heterogeneous preferences in random utility models a latent class approach a finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity the model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists the basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip aswell as their stated preferences overwilderness park attributes the econometricanalysis suggested that four classes of peopleexist in the sample using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model and provided insight into thedifferential impact of alternative policies

dynamic capabilities as context the role of decision system and structure in this article we look at some implications of the role of dynamic capabilities in enabling strategic decision making in the firm it is argued that properly specifying questions relating to dynamic capabilities raises questions of what is involved in strategic decisions which in turn inevitably involves or should involve consideration of the complementary roles of non decomposability and decision processes this entails a reappraisal of how and where established frameworks may or may not be of relevance in this context and invites consideration of how an economics perspective should be framed to deal with such issues copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the firm as an epistemic community the knowledge based view revisited based on a social constructivist conceptualization of knowledge as residing in groups of practitioners epistemic communities this paper proposes a new perspective on the knowledge based view of the firm and sketches the outline of a new research agenda it argues that the cost of governing knowledge processes depends as much on the cognitive background of the exchange partners as on the tacitness of the knowledge firms exist because they may form epistemic communities in their own right with enabling and motivational properties superior to those of markets in the governance of knowledge processes across epistemic boundaries establishing a firm as an epistemic community requires transaction specific investments that are difficult to realize under market forms of governance

evolutionary theorizing in economics modern economic analysis oriented toward understanding the workings of economies that make extensive use of markets came into existence with three guiding questions all central in adam smith s 1776 1937 the wealth of nations one question concerned order without any central authority guiding and commanding action how is economic activity coordinated the second question was the challenge of explaining the prevailing constellation of prices inputs and outputs what explains the price of labor and the rent of land the third question addressed the processes of economic progress or development smith and other early economists clearly were impressed by the inventiveness the energy and the growing productivity generated by the evolving market economy how to understand its dynamics the first two questions have defined continuing central concerns of the discipline of economics since they first were posed over two centuries ago when not posed in the context of an economy that is understood as in the process of developing they seem to pull the focus of theorizing toward equilibrium conditions the third question concerned with the processes driving economic progress pulls the theorizing toward an evolutionary orientation the question of economic development has waxed and waned in centrality to the discipline as has the importance of evolutionary theorizing during the first several decades of the twentieth century evolutionary thinking and language was widespread in economics but as one contrasts the economic

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

a note on choice of residential location in travel cost demand models where x is number of visits to a site p is price y is a k x 1 vector of observed individual characteristics and e is a random component 1 is a 1 x k parameter vector and p is a scalar parameter hundreds of models with this basic demand relationship as a basis have been estimated see smith s 1989 review my concern is that the price used in this model may be endogenous because people base decisions about where to live in part on proximity to recreation sites if so unobserved taste characteristics in the error term e will be

heterogeneity of preferences for the benefits of environmental stewardship a latent class approach since 2005 environmental stewardship es has been the principal agri environment scheme for england and is the key instrument for the delivery of increased environmental benefits from agricultural landscapes the main objective of this study is to investigate whether or not individuals preferences for the environmental benefits associated with es vary depending on types of landscapes within which these benefits are delivered a latent class model is applied to data obtained from a choice experiment survey of over 1000 respondents sampled across england the results suggest that individuals have heterogenous preferences for the benefits of es though different segments of the population with more homogenous preferences can be identified in particular higher levels of benefit are often associated with the operation of es in landscapes close to where respondents live this leads to the suggestion that in order to maximise the benefits of es its implementation could take this result into account by encouraging greater uptake from farmers whose land is closer to large populations

environmental inequality and economic valuation i study how the economic value of a heterogeneously distributed environmental public good depends on how the endowment with this good and income are distributed i find that the effect of environmental inequality on the societal willingness to pay wtp for the environmental good is determined both by its substitutability and by the correlation of its provision with income specifically environmental inequality decreases societal wtp for substitutes but this effect is reversed if the environmental good is a complement or distributed strongly in favour of richer households moreover i show that richer households living in places where environmental good endowment is high increases decreases societal wtp if and only if the environmental good is a substitute for complement to consumption goods i propose novel adjustment factors for structural benefit transfer to control for differences in the spatial distribution of environmental goods using forest preservation in poland as an empirical example i find that societal wtp is up to 4 higher for equal access to forests and up to 8 higher for an equal distribution of both income and access to forests

the dynamic capabilities of firms an introduction an expanded paradigm is needed to explain how competitive advantage is gained and held firms resorting to resource bas ed strategy attempt to accumulate valuable technology assets and employ an aggressive intellectual property stance however winners in the global marketplace have been firms demonstrating timely responsiveness and rapid and flexible product innovation along with the management capability to effectively coordinate and redeploy internal and external competences this source of competitive advantage dynamic capabilities emphasizes two aspects first it refers to the shifting character of the environment second it emphasizes the key role of strategic management in appropriately adapting integrating and re configuring internal and external organizational skills resources and functional competences toward changing environment 3 only recently have researchers begun to focus on the specifics of developing firm specific capabilities and the manner in which competences are renewed to respond to shifts in the business environment the dynamic capabilities approach provides a coherent framework to integrate existing conceptual and empirical knowledge and facilitate prescription this paper argues that the competitive advanis tage of firms stems from dynamic capabilities rooted in high performance routines z operating inside the firm embedded in the firm s processes and conditioned by its history it offers dynamic capabilities as an emerging paradigm of the modern business j firm that draws on multiple disciplines and advances with the help of industry studies in the usa and elsewhere

one money one market the effect of common currencies on trade currency unions their dramatic effect on international trade a gravity model is used to assess the separate effects of exchange rate volatility and currency unions on international trade the panel data bilateral observations for five years during 1970 90 covering 186 countries includes 300 observations in which both countries use the same currency i find a large positive effect of a currency union on international trade and a small negative effect of exchange rate volatility even after controlling for a host of features including the endogenous nature of the exchange rate regime these effects statistically significant imply that two countries sharing the same currency trade three times as much as they would with different currencies currency unions like the european emu may thus lead to a large increase in international trade with all that that entails andrew rose

bounded rationality and tacit knowledge in the organizational capabilities approach an assessment and a re evaluation the famous three chapters in nelson and winter s an evolutionary theory of economic change 1982 that focus on firm routines and capabilities are often taken to be solidly founded on an assumption of bounded rationality i argue that in actuality bounded rationality plays a rather limited role in nelson and winter 1982 that the very different assumption of tacit knowledge is much more central and that the links between bounded rationality and routines capabilities are not clear i then argue that the absence in nelson and winter of a clear methodological individualist foundation for notions such as routines capabilities competencies etc has resulted in certain explanatory difficulties in the modern organizational capabilities approach that has taken so much inspiration from their work copyright 2003 oxford university press

tax rates and tax evasion evidence from missing imports in china tax evasion by its very nature is difficult to observe we quantify the effects of tax rates on tax evasion by examining the relationship in china between the tariff schedule and the evasion gap which we define as the difference between hong kong s reported exports to china at the product level and china s reported imports from hong kong our results imply that a one percentage point increase in the tax rate is associated with a 3 percent increase in evasion furthermore the evasion gap is negatively correlated with tax rates on closely related products suggesting that evasion takes place partly through misclassification of imports from higher taxed categories to lower taxed ones in addition to underreporting the value of imports

estimating preferences for outdoor recreation a comparison of continuous and count data demand system frameworks abstract continuous and count data demand system models have emerged as attractive alternatives to the discrete choice random utility maximization models rums that currently dominate the seasonal multi site recreation demand literature this paper compares the frameworks conceptually and investigates their empirical performance with a common data set although the two modeling approaches employ substantially different behavioral and econometric assumptions results from a recreation application based on the 1997 iowa wetlands survey suggest that qualitatively similar policy inferences arise from the competing structures

designing conjoint choice experiments using managers prior beliefs abstract the authors provide more efficient designs for conjoint choice experiments based on prior information elicited from managers about the parameters and their associated uncertainty the authors use a bayesian design procedure that assumes a prior distribution of likely parameter values and optimizes the design over that distribution the authors propose a way to elicit prior information from managers and show in monte carlo studies that the procedure provides more efficient designs than the current procedures the authors provide an empirical application in which they elicit prior information on the parameter values and the associated uncertainty from managers here the bayesian design provides 30 50 lower standard errors of the estimates and an expected predictive validity that is approximately 20 higher

a resource based theory of the firm knowledge versus opportunism this paper develops a resource based knowledge based theory of the firm its thesis is that the organizational mode through which individuals cooperate affects the knowledge they apply to business activity we focus on the polar cases of organization within a firm as compared to market contracting there will be a difference in the knowledge that is brought to bear and hence in joint productivity under the two options thus as compared to opportunism based transaction cost theory we advance a separate yet complementary answer to the question why do firms exist our aim is to develop an empirically relevant and complementary theory of why firms are formed a theory based on irreducible knowledge differences between individuals rather than the threat of purposeful cheating or withholding of information we assume limited cognitive abilities on the part of individuals bounded rationality and assume that opportunistic behavior will not occur the latter allows us to determine whether resource based

the division of labor need not imply regional specialization the regional specialization of economic activities is generally deemed desirable for three reasons 1 the law of comparative advantage 2 localized economies of scale and 3 knowledge spillovers taking a methodological individualist perspective we claim that 1 the law of comparative advantage while valid for individuals and firms does not necessarily imply regional specialization when regions are viewed as consisting of heterogeneous individuals 2 localized economies of scale are seldom specific to one industry and external in all but the regional level and 3 the study of knowledge spillovers is inconclusive and would benefit from a more disaggregated perspective

knowledge based approaches to the theory of the firm some critical comments it is argued that kogut and zander kogut b u zander 1992 knowledge of the firm combinative capabilities and the replication of technology organ sci 3 383 397 and conner conner k r 1991 a historical comparison of resource based theory and five schools of thought within industrial organization economics do we have a new theory of the firm j management 17 121 154 erred in the specific way in which they claimed that a distinct theory of the multi person firm can be constructed on the basis of a theory of organizational knowledge or from resource based insights it is not possible to tell very much of a story about why there should be firms in lieu of notions such as opportunism or moral hazard however properly interpreted knowledge based theories may help shed light on issues relating to the boundaries and internal organization of the firm

a latent class approach to modeling endogenous spatial sorting in zonal recreation demand models a method for incorporating unobserved heterogeneity into aggregate count data frameworks is presented and used to control for endogenous spatial sorting in zonal recreation models the method is based on latent class analysis which has become a popular tool for analyzing heterogeneous preferences with individual data but has not yet been applied to aggregate count data the method is tested using data on backcountry hikers for a southern california study site and performs well for relatively small numbers of classes the latent class model produces substantially smaller welfare estimates compared to a constrained version that assumes homogeneity throughout the population

tariff evasion effects in quantitative general equilibrium abstract one consequence of tariff evasion is that a country s average statutory import tariff rate deviates from the average applied tariff rate we deliver an approach to estimate the average evasion rate in multi country general equilibrium we find evidence of significant average tariff evasion which leads to downward biased estimates of the elasticity of substitution parameter in new trade theory models and associated upward biased comparative static welfare effects of trade liberalization

learning and fatigue effects revisited investigating the effects of accounting for unobservable preference and scale heterogeneity using multiple choice tasks per respondent in discrete choice experiment studies increases the amount of available information however respondents learning and fatigue may lead to changes in observed utility function preference taste parameters as well as the variance in its error term scale they need to be controlled to avoid potential bias a sizable body of empirical research offers mixed evidence in terms of whether these ordering effects are observed we point to a significant component in explaining these differences we show how accounting for unobservable preference and scale heterogeneity can influence the magnitude of observed ordering effects

using angler characteristics and attitudinal data to identify environmental preference classes a latent class model a latent class model of environmental preference groups is developed and estimated with only the answers to a set of attitudinal questions economists do not typically use this type of data in estimation group membership is latent unobserved the intent is to identify and characterize heterogeneity in the preferences for environmental amenities in terms of a small number of preference groups the application is to preferences over the fishing characteristics of green bay anglers answered a number of attitudinal questions including the importance of boat fees species catch rates and fish consumption advisories on site choice the results suggest that green bay anglers separate into a small number of distinct classes with varying preferences and willingness to pay for a pcb free green bay the probability that an angler belongs to each class is estimated as function of observable characteristics of the individual estimation is with the expectation maximization e m algorithm a technique new to environmental economics that can be used to do maximum likelihood estimation with incomplete information as explained a latent class model estimated with attitudinal data can be melded with a latent class choice model

alternative models of recreational off highway vehicle site demand a controversial recreation activity is off highway vehicle use off highway vehicle use is controversial because it is incompatible with most other activities and is extremely hard on natural eco systems this study estimates utility theoretic incomplete demand systems for four off highway vehicle sites since two sets of restrictions are equally consistent with utility theory both are imposed and the best fitting restrictions are identified using voung s non nested testing scheme the demand system is modeled using both poisson and negative binomial ii distributions data are provided by a survey conducted at four recreational off highway vehicle ohv sites in western north carolina

addressing aggregation bias in zonal recreation models abstract models of recreation demand are often based on zonal data results from such models are susceptible to aggregation bias we propose a zonal model of recreation that captures some of the underlying heterogeneity of individual visitors by incorporating distributional information on per capita income from census sources into the aggregate demand function this adjustment eliminates the unrealistic constraint of constant income across zonal residents and thus reduces the risk of aggregation bias in estimated parameters in addition the corrected aggregate specification reinstates the applicability of generalized maximum likelihood methods and increases model efficiency

transaction cost economics in real time this paper attempts to place the theq of the boundaries of thejirm within the context of the passage of time more precisely it resurrects and places in a modem frame some of the insights of the chsical and marshallian theories of organization the modem reinterpretation of those theories centers around the capabilities view of the jirm taken together with governance costs the capabilities ofjirm and market determine the boundaries of the jirm in the short run ovw time capabilities change as firms and markets learn which implies a kind of information or knowledge cost the cost of trandewing the firm s capability to the market w vice versa these dynamic governance costs are the costs of persuading negotiating and coordinating with and teaching others they arise in the face of change notably txchnological and organizational innovation in fit they are the costs of not having the capabilities you need when you need them dynamic transaction costs provide an explanation for vertical integration that is arguably more general than those dominant in the literature in the face of uncertainty and divwgent views ofthe future common ownership of multiple stages of production is a supwior institutional arrangement for coordinating systemic change asset specrfity is neither necessary nor suffient for this to be true dynamic governance costs may also affit internal organization it may sometimes be costly in 3 terms of persuasion negotiation and teaching to create within the firm capabilities readily available on the market indeed in cases in which systemic coordination is not 4 the issue the market may turn out to be the superior institution of coordination in e 2 genwal the capabilities view of the jirm suggests that we look atfim2 and market as alternative and sometimes overlapping institutions of learning 1 transaction costs in the long rzln and the short 9 x classical and neoclassical perspectives

spatial heterogeneity of willingness to pay for forest management the paper investigates the spatial heterogeneity of public s preferences for the implementation of a new country wide forest management and protection program in poland spatial econometric methods and high resolution geographical information system data related to forest characteristics are used to explain the variation in individual specific willingness to pay wtp values derived from a discrete choice experiment study we find that respondents wtp is higher the closer they live to their nearest forest and the scarcer forests are in the area where they live interestingly the higher the ecological value of forests in respondents area the more people prefer extending areas of national forest protection we also investigate spatial patterns in individual specific wtp scores and in latent class membership probabilities finding that preferences are indeed spatially clustered we argue that this clustering should be taken into account in forest management and policy making

the amenity value of woodland in great britain a comparison of economic estimates forests produce benefits over and above the revenue yielded from timber and other wood based products most important among these may be the recreational benefits for visitors which have been examined in several studies total benefits for residents are perhaps more accurately captured in property values since ceteris paribus the price of a house reflects willingness to pay to live near an environmental amenity such as a forest to gain access to it and also the amenity non use value of the forest in so far as it creates a pleasant landscape however the total non priced value of forestry is not the sum of hpm and itcm benefit estimates recreational benefits will typically be less and will be subsumed in the hpm estimates since the hedonic price is partly induced by the value of recreational access

a revealed preference approach to the measurement of congestion in travel cost models abstract travel cost models are regularly used to determine the value of recreational sites or particular site characteristics yet congestion a key site attribute is often excluded from such analyses one reason for this omission is that congestion is determined in equilibrium by the process of individuals sorting across sites and thus presents significant endogeneity problems this paper illustrates this source of endogeneity describes how previous research has dealt with it using stated preference techniques and describes an instrumental variables approach to address it in a revealed preference context we demonstrate that failing to address the endogeneity of congestion leads one to dramatically understate its costs we apply our technique to the valuation of a large recreational fishing site in wisconsin lake winnebago which if eliminated would induce significant re sorting of anglers amongst remaining sites ignoring congestion leads to an understatement of the lake s value by more than 50

spatial preference heterogeneity in forest recreation abstract in this study we analyze the preferences for recreational use of forests in lorraine northeastern france applying stated preference data our approach allows us to estimate individual specific preferences for recreational use of different forest types these estimates are used in a second stage of the analysis where we test whether preferences depend on access to recreation sites we find that there is significant preference heterogeneity with respect to most forest attributes the spatial analysis shows that preferences for forests with parking and picnic facilities are correlated with having access to such forests while for the other attributes considered dominant tree species trekking paths and presence of lake and rivers we find no correlation between stated preferences and accessibility this implies that the problem of endogenous distances in the travel cost method parsons 1991 may be present in the estimation of welfare economic values for parking and picnic facilities in the analyzed model the results underline the importance of considering spatial heterogeneity of preferences carrying out economic valuation of spatial delineated environmental goods and that the spatial variation in willingness to pay for such goods is not only explained by the users transport costs of accessing the sites

the competence based approach veblenian ideas in the modern theory of the firm the author argues that a contemporary stronghold of a number of thorstein veblen s crucial ideas can be found in the emerging competence based approach to the firm e g penrose chandler winter for example the emphasis in this literature on firms as path dependent entities characterized by their heterogenous and group based knowledge bases can be linked with key themes in veblen s work thus the paper presents the competence based approach as a modern veblenian approach moreover the veblenian aspects of the competence based approach are also those aspects that most differentiate it from the other dominant economic approach to the firm the contractual approach e g alchian and demsetz williamson grossman and hart the aim of the paper is both to make this historical point and to present a contemporary body of theory that may with some justice be called veblenian copyright 1998 by oxford university press