a conjectural variations model of reduced japanese milk price supports conjectural variations are estimated to determine the degree of imperfection in the japanese milk market estimated conjectural variations indicate that the japanese milk market is imperfectly competitive but is becoming more competitive our comparative static analysis indicates that when the milk support price is reduced the fluid milk price will decline less under the current imperfectly competitive structure than it would under a competitive structure

agricultural support policies in imperfectly competitive markets why market power matters in policy design most agricultural policy analysis assumes that markets are perfectly competitive despite increasing evidence to the contrary we demonstrate that the interaction of market power and government intervention may lead to outcomes that are counter to key results of policy analysis for perfectly competitive markets we show that market power may reduce or eliminate entirely the net welfare benefits from removing two traditional support mechanisms price floors and deficiency payments and may increase considerably the government s cost of implementing either of them accordingly optimally designed price support measures may improve welfare in the presence of downstream oligopoly and or oligopsony power copyright 2011 oxford university press

income non convergence and rural urban earnings differentials evidence from north carolina considerable attention is currently focussed on the deteriorating social and economic condition of america s rural communities stagnant or worsening poverty rates unemployment rates and real incomes over the past decade along with persistent and widening gaps between the economic performance of rural and urban areas are well documented indicators of the seriousness of this socioeconomic malaise 6 8 18 coming as it has after a period of relative prosperitythe so called rural renaissance of the 1970s the current crisis in rural america has generated a great deal of consternation among policymakers social scientists and other students of rural development current concerns over rural economic decline coincide with the observation by a number of researchers that the spatial dispersion of income measured by the variance of income or earnings per capita across geographic units has increased over the past decade or so this pattern of income non convergence has been observed across countries 1 regions of the u s 3 and states 5 and is distinctly at odds with the theoretical predictions of standard neo classical growth theory a considerable recent literature that accounts for the effects of schooling human capital accumulation learning by doing and endogenous technical change within the context of endogenous growth models seeks to generalize the standard growth model and clarify the conditions under which incomes may be expected to converge or diverge over time 2 14 17 in fact the recent increase in dispersion of income per capita and the widening disparity in the economic performance of rural and urban areas appear to be related phenomena consider figure 1 which plots measures of income dispersion and rural urban income differentials over time for north carolina s 100 counties there it will be observed that the coefficient of variation

an equilibrium displacement approach to oligopoly market analysis an application to trade in the korean infant formula market this article uses an equilibrium displacement model edm to assess the impact of a change in trade policy in the korean infant formula market that is assumed to be oligopolistic domestic oligopolists compete in a market for a homogenous good with importing firms who enjoy the same level of market power as the domestic producers within an edm framework we investigate how the market adjusts to a new equilibrium in response to an external policy shock that improves access to foreign goods our empirical work consists of two steps we first econometrically estimate the market demand elasticity and market power parameter then using these estimates we simulate our edm model to assess the distributional effects of tariff cuts and other changes in marginal cost simulation results show that with a lower market price and increased consumption the change in consumer surplus resulting from tariff reduction is unambiguously positive but that the change in social welfare can be in either direction depending on who receives market rents associated with imports when importing firms are domestic the domestic welfare change is definitely positive however in the case of foreign importing firms the direction of the welfare change crucially depends on the demand elasticity

the effects of housing prices wages and commuting time on joint residential and job location choices an empiricalmodelof joint decisions of where to l and where to work demonstrates that individuals make residential and job location choices by trading off wages housing prices and commuting costs wages are higher in metropolitan markets but housing prices are also higher in urban areas consumers can live in lower priced nonmetropolitan houses and still earn urban wages but they incur commuting costs that increase with distance from the city improvements in transportation that lower commuting time will increase nonmetropolitan populations and will increase the number of nonmetropolitan commuters to metropolitan markets equal wage growth across labor markets causes a shift in relative population from rural to urban markets while an equiproportional increase in housing prices causes a population shift toward rural areas

minimizing cvar and var for a portfolio of derivatives value at risk var and conditional value at risk cvar are the most frequently used risk measures in current risk management practice as an alternative to var cvar is attractive since it is a coherent risk measure we analyze the problem of computing the optimal var and cvar portfolios in particular we illustrate that var and cvar minimization problems for derivatives portfolios are typically ill posed for example the var and cvar minimizations based on delta gamma approximations of the derivative values typically have an infinite number of solutions in this paper we focus on the portfolio selection problem which yields a portfolio of the minimum cvar with a specified rate of return we propose to include cost as an additional preference criterion for the cvar optimiza tion problem we demonstrate that with the addition of a proportional cost it is possible to compute an optimal cvar derivative investment portfolio with significantly fewer instru ments and comparable cvar and var a computational method based on a smoothing technique is proposed to solve a simulation based cvar optimization problem efficiently comparison is made with the linear programming approach for solving the simulation based cvar optimization problem

female participation and labor market attachment in rural canada this article explores the reasons for differences in female rural urban participation rates by estimating a dynamic model of participation allowing for unobserved heterogeneity and state dependence using canadian panel data the results suggest that overall observed differences in rural urban participation rates are primarily due to differences in observed socioeconomic characteristics however for women resident in low income households there is evidence that the operation of rural labor markets effectively lowers their participation rates copyright 2002 oxford university press

the creation of dominant firm market power in the coconut oil export market legal and institutional changes that centralized control of the philippine coconut oil refining and exporting industries enabled the philippines to exercise some of its potential dominant firm market power if the elasticity of demand for coconut oil continues to increase in part due to concerns about the health risks from eating saturated fats philippine exports will increase slightly while the price and philippine revenue will fall significantly within the next decade

determinants of oligopsony power the haitian coffee case abstract this paper investigates the determinants of oligopsony power exerted by coffee exporters in haiti it develops and estimates a two equation model with cross parameter restrictions one equation for the lerner index of oligopsony and the other for the residual supply function facing exporters empirical results indicate that both institutional arrangements and domestic market conditions have significantly shaped oligopsony power

the production and inventory behavior of the american automobile industry understanding inventory movements is central to an understanding of business cycles this paper presents an empirical study of the behavior of inventories in the automobile industry it finds that inventory behavior is well explained by the assumption of intertemporal optimization with rational expectations the underlying cost structure appears to have substantial costs of changing production as well as substantial costs of being away from target inventory thelatter being a function of current sales given this cost structure whether inventory behavior is stabilizing or destabilizing depends on the characteristics of the demand process in the automobile industry inventory behavior is destabilizing the variance of production is larger than the variance of sales

dynamic oligopoly in the rice export market a linear quadratic dynamic oligopoly model is used to estimate the competitiveness of the rice export market the model nests various market structures using either open loop or feedback strategies the estimated feedback model implies a less competitive market structure than the estimated open loop model the rice export market is oligopolistic but it is closer to competitive than collusive copyright 1989 by mit press

measuring market power in food processing industries discussion focuses on the measurement of market power in the beef processing industry in the united states causal linkage between concentrated industrial structure and antisocial economic performance structure conduct performance paradigm basic model for fed cattle studies

dynamic duopolistic competition with sticky prices the authors study duopolistic competition in a homogeneous good through time under the assumption that its current desirability is an exponentially weighted function of accumulated past consumption this implies that the current price of the good does not decline by as much to accommodate any given level of current consumption our an alysis is conducted in terms of a differential game it is found that the equilibrium price corresponding to the open loop nash equilibriu m strategies approaches the static cournot equilibrium price while th e equilibrium price corresponding to the closed loop nash equilibrium strategies which are subgame perfect approaches a price below it copyright 1987 by the econometric society

investment and market power abstract this paper argues that the degree of market power within an industry is an important determinant of interindustry differences in investment behavior a neoclassical investment model is analyzed to show that market power is positively associated with capital stock flexibility the intuition for the result is that firms adjust their stocks and investment plans quickly in response to new conditions so as to capture the rents asssociated with their market power

local economic conditions and wage labor decisions of farm and rural nonfarm couples effects of geographical differences in local economic conditions on wage labor demand and wage labor participation decisions of rural couples are examined for current population survey households 1978 82 wage premiums are shown to exist for localities anticipating labor demand growth higher unemployment rates larger share of employment in services and higher costs of living these effects are stronger for males than females effects of local economic conditions on the probability of wage work are consistent with expected market wage and reservation wage effects and for farm households the probability of wage work increases when expected farm output prices decline or the wage increases

rural urban welfare program and labor force participation nonmetro poor in the midwest participate more in the labor force and less in welfare programs than metro poor we formalize how household composition capital labor market conditions and state specific regulations define opportunity sets then estimate a bivariate binomial probit model of work and program participation choices an oaxaca decomposition analysis is conducted to compare differences in characteristics to differences in behavior in explaining the two groups choices we find no behavioral basis for the difference in labor market participation and while most of the lower midwestern nonmetro welfare program participation is due to demographics some is due to different life cycle behavior

computing near optimal value at risk portfolios using integer programming techniques value at risk var is one of the main regulatory tools used for risk management purposes however it is difficult to compute optimal var portfolios that is an optimal risk reward portfolio allocation using var as the risk measure this is due to var being non convex and of combinatorial nature in particular it is well known that the var portfolio problem can be formulated as a mixed integer linear program milp that is difficult to solve with current milp solvers for medium to large scale instances of the problem here we present an algorithm to compute near optimal var portfolios that takes advantage of this milp formulation and provides a guarantee of the solution s near optimality as a byproduct we obtain an algorithm to compute tight upper bounds on the var portfolio problem that outperform related algorithms proposed in the literature for this purpose the near optimality guarantee provided by the proposed algorithm is obtained thanks to the relation between minimum risk portfolios satisfying a reward benchmark and the corresponding maximum reward portfolios satisfying a risk benchmark these alternate formulations of the portfolio allocation problem have been frequently studied in the case of convex risk measures and concave reward functions here this relationship is considered for general risk measures and reward functions to illustrate the efficiency of the presented algorithm numerical results are presented using historical asset returns from the us financial market

dynamic relationships between us and thai rice prices abstract relationships between the united states department of agriculture s usda estimated world market price the thai milled rice price us transportation adjusted cash rough rice price and the chicago rice and cotton exchange rough rice futures price are examined for the 1987 1991 marketing years specifically a cointegration analysis is used to address the pricing and informational efficiency of the respective markets testing indicates the system is described by two cointegrating vectors the analysis preformed herein provides insight into the pricing performance of several world rice markets

capacity investment preemption and commitment in an infinite horizon model the commitment value of capacity is analyzed in an infinite horizon duopoly model the paper focuses on the role of alternative behavioral assumptions about the ability of firms to commit to investment paths each firm s investment strategy in a feedback nash equilibrium is shown to be a decreasing function of its rival s current capacity this creates an incentive for a firm to expand its capacity to preempt subsequent rival investment in a precommitment equilibrium there are no incentives to invest preemptively as a consequence steady state capacity levels are greater in a feedback nash equilibrium than in a precommitment equilibrium copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

worst case value at risk and robust portfolio optimization a conic programming approach classical formulations of the portfolio optimization problem such as mean variance or value at risk var approaches can result in a portfolio extremely sensitive to errors in the data such as mean and covariance matrix of the returns in this paper we propose a way to alleviate this problem in a tractable manner we assume that the distribution of returns is partially known in the sense that onlybounds on the mean and covariance matrix are available we define the worst case value at risk as the largest var attainable given the partial information on the returns distribution we consider the problem of computing and optimizing the worst case var and we show that these problems can be cast as semidefinite programs we extend our approach to various other partial information on the distribution including uncertainty in factor models support constraints and relative entropy information