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

the return of the wage phillips curve the standard new keynesian model with staggered wage setting is shown to imply a simple dynamic relation between wage inflation and unemployment under some assumptions that relation takes a form similar to that found in empirical applications starting with the original phillips 1958 curve and may thus be viewed as providing some theoretical foundations to the latter the structural wage equation derived here is shown to account reasonably well for the comovement of wage inflation and the unemployment rate in the u s economy even under the strong assumption of a constant natural rate of unemployment

ordering effects and choice set awareness in repeat response stated preference studies we present an experiment designed to investigate the presence and nature of ordering effects within repeat response stated preference sp studies our experiment takes the form of a large sample full factorial discrete choice sp exercise investigating preferences for tap water quality improvements our study simultaneously investigates a variety of different forms of position dependent and precedent dependent ordering effect in preferences for attributes and options and in response randomness we also examine whether advanced disclosure of the choice tasks impacts on the probability of exhibiting ordering effects of those different types we analyze our data both non parametrically and parametrically and find robust evidence for ordering effects we also find that the patterns of order effect in respondents preferences are significantly changed but not eradicated by the advanced disclosure of choice tasks a finding that offers insights into the choice behaviors underpinning order effects

residential peak electricity demand response highlights of some behavioural issues electricity demand response refers to consumer actions that change the utility load profile in a way that reduces costs or improves grid security the focus of demand response has mainly been on the commercial and big industrial sectors because of the large demand reduction that they can offer to the utility grid operators utilities are showing increasing interest in residential demand response rdr rdr can be treated as an energy resource which can be assessed and commercially developed however there are still some issues that remain to be addressed for rdr to be successful these include price unresponsiveness of some residential consumers equity issues and high cost of the metering infrastructure the aim of this paper is to investigate and present some of the challenges in achieving effective voluntary demand reduction based on a review of residential demand response literature as well as the general residential energy use behaviour literature the authors propose the use of a hybrid engineering approach using social psychology and economic behaviour models to overcome these challenges and realize the benefits of supply security and cost management

slow recoveries any role for corporate leverage abstract this paper examines whether financial conditions of the non financial corporate sector can explain why the recovery from recessions in the united states is slower since the mid 1980s leverage by the corporate sector has increased significantly since the financial deregulation of the mid 1980s empirical evidence shows that slow recoveries are associated with a significant drop in the growth rates of investment and bank loans and with a surge in the growth rates of corporate bonds in an estimated dynamic stochastic general equilibrium model with a financial accelerator counterfactual experiments based on estimates of two samples 1965 1983 and 1984 2007 show that the non financial corporate indebtedness affects only marginally the speed of the recovery in the two samples

preference anomalies preference elicitation and the discovered preference hypothesis there is wide ranging evidence much of it deriving from economics experiments of anomalies in behaviour that challenge standard preference theories this paper explores the implications of these anomalies for preference elicitation methods because methods that are used to inform public policy such as contingent valuation are based on standard preference theories their validity may be called into question by the anomaly data however on a new interpretation these anomalies do not contradict standard theory but are errors in stated preference that can be expected to disappear as people become more experienced in relevant decision environments we explore the evidence for this interpretation and what implications follow for preference elicitation methodology

trading off positive and negative service changes in childcare a choice experiment using a latent class modelling approach theoretically the choice of childcare mode should be influenced by the quality of the childcare attributes however such preference relations have been difficult to identify in past studies one

okun s law across time and frequencies abstract we present the first assessment of u s okun s law across time and frequencies we use a set of continuous wavelet tools that allows for estimating okun s coefficient and the lead lag of output over unemployment at each moment and for each cyclical frequency we find similar results for the gaps and the first differences specifications at business cycles frequencies but not at lower frequencies okun s coefficient has increased in absolute value since the mid 1960s except in 1985 1995 and is not particularly sensitive to recessions the lead of output varies considerably over time and also at different frequencies we observe especially with the gaps specification that there are at least two cyclical processes relevant for the okun s relationship one at the business cycle and another at lower frequencies methods that do not take this into account are bound to mix the information embedded in both cycles

great recession slow recovery and muted fiscal policies in the us this paper reconsiders the role of macroeconomic shocks and policies in determining the great recession and the subsequent recovery in the us the great recession was mainly caused by a large demand shock and by the zlb on the interest rate policy in contrast with previous findings the subsequent jobless recovery is explained by the zlb effect we estimate a fraction of non ricardian households which is close to 50 and obtain comparatively large fiscal multipliers however we cannot detect a significant contribution of fiscal policies in stabilizing the us economy for instance the 2007 2009 large increase in expenditure to gdp ratios was apparently determined by the adverse non policy shocks that caused the recession

choice certainty and consistency in repeated choice experiments the main objective of this study is to examine how repeated choice affects preference learning in stated preference experiments we test different hypotheses related to preference learning by analyzing response patterns and asking respondents in a choice experiment to report their experienced certainty when going through the choice tasks in a split sample test we show that follow up choice certainty questions are procedural invariant the self reported certainty results indicate that learning occurs but econometric testing procedures do not identify any significant impact of learning effects on parameter estimates or variance across choice tasks additional tests of choice consistency suggest that preferences in the choice experiment are stable and coherent

deciphering the causes for the post 1990 slow output recoveries abstract this paper explores the causes for the slow output recoveries in the u s since 1990 via estimating a time varying parameter vector autoregressive model with stochastic volatilities the model incorporates routine employment as a share of total employment and two financial variables to simultaneously evaluate the roles of labor market related and credit related factors in determining output dynamics based on the estimated model the counterfactual experiments highlight the crucial roles of routine biased technological changes and structural changes that shift investment dynamics in explaining post 1990 slow output recoveries

demand response in china regulations pilot projects and recommendations a review abstract with the acceleration of the process of industrialization and urbanization energy shortage and environmental protection have become the new problems faced by chinese economic development the electric power industry is the pillar industry of chinese economic development while the economic development puts forward higher requirements for electricity companies power enterprises should not only focus on the quantity and quality of the power generation side but also pay more attention to demand side management demand side management dsm receives more and more attention in china in recent years as one of the solutions of dsm demand response plays an important role in ensuring the stable operation of electric network and controlling the rise of electricity tariff at first this article describes the status quo of the demand response implementation related technologies and pilot projects then it analyzes chinese demand response technology frame from the grid side the communication side and the user side it also puts forward suggestions for the implementing progress and specific procedures of orderly electricity consumption at last this paper points out the problems in the technology and policy of electricity demand response implementation in china by the analysis of the demand response status quo and the implementing comparison between china and foreign countries as well as gives recommendations for future development

on the trade off between real time pricing and the social acceptability costs of demand response abstract dynamic tariff policies have become an essential feature of modern electric grid design the successful implementation of such policies usually depends on overcoming the resistance of end users to real time pricing and its political implications in this paper we review the literature on the social acceptability costs of implementing demand response programs and we discuss the key features of implementing a real time price to energy although the literature acknowledges the existence of a social acceptability cost it does not propose an explicit approach to dealing with this issue a model for investigating the implications of the social acceptability cost is thus introduced and through it we discuss thoroughly the joint impact of the elasticity and externality parameters on the tariff design of a demand response program we explore how the increases in elasticity and in externality effects influence price changes in such programs and how the social acceptability cost could be reduced as a function of pricing policies we conclude by discussing the policy design mechanisms in line with demand elasticity and their role in decreasing price variations to cope with the minimum volatility principle in the presence of policies that penalize high prices there is an even further decrease in price variations

job polarization in europe the structure of employment is always changing and economists are always trying to understand those changes in the 1990s the idea of skill biased technological change sbtc was used to understand the shift in employment toward more educated workers see david h autor and lawrence f katz 1999 for a survey however in recent years it has become appar ent that a more nuanced approach is needed the idea of sbtc might lead one to predict a uni form shift in employment away from low skilled and toward high skilled occupations but studies for the united states autor katz and melissa s kearney 2006 and the united kingdom goos and manning 2007 have shown that there is growth in employment in both the high est skilled professional and managerial and lowest skilled personal services occupations with declining employment in the middle of the distribution manufacturing and routine office jobs this is what goos and manning 2007 term job polarization although see the introduc tion to goos and manning 2007 for antecedents of these ideas there are several hypotheses about the rea sons for job polarization first the routiniza tion hypothesis first put forward by autor frank levy and richard murnane 2003 sug gests that the effect of technological progress is to replace routine labor which tends to be clerical and craft jobs in the middle of the wage distribution second there is the view that globalization in general and offshoring in par ticular is an important source of change in the job structure in the richest countries see for example alan s blinder 2007 third there may be a link between job polarization and

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

job polarization and jobless recoveries job polarization refers to the shrinking share of employment in middle skill routine occupations experienced over the past 35 years jobless recoveries refers to the slow rebound in aggregate empl

measures of per capita hours and their implications for the technology hours debate structural vector autoregressions give conflicting results on the effects of technology shocks on hours the results depend crucially on the assumed data generating process for hours per capita we show that the standard measure of hours per capita and productivity have significant low frequency movements that are the source of the conflicting results hodrick prescott hp filtered hours per capita produce results consistent with those obtained when hours are assumed to have a unit root we show that important sources of the low frequency movements in the standard measure are sectoral shifts in hours and the changing age composition of the working age population when we control for these low frequency components to determine the effect of technology shocks on hours using long run restrictions we get one consistent answer hours decline in the short run in response to a positive technology shock we further extend the analysis by examining the effects of demographic controls on the impulse responses to investment specific technology shocks our results are less conclusive

jobless recoveries stagnation or structural change within the existing literature a number of competing explanations for jobless recoveries have emerged on the one hand there is evidence of dynamic structural change including offshoring globalization and technological advances that are resulting in the loss of middle skill routine employment other studies emphasize a less dynamic economy with slower growth reduced labor market fluidity a decline in startup activity and even economic stagnation this study exploits variation among u s states to assess the degree that stagnation and or important structural changes in the economy contribute to the recent phenomenon of jobless recoveries we find support for both the stagnation and structural change theories of jobless recoveries on the stagnation side we find evidence that lower startup rates are a significant predictor of jobless recoveries we also find evidence that links dynamic structural change to the jobless recovery phenomenon more specifically states experiencing a long run downward trend in the share of routine employment are more likely to experience a jobless recovery our results are consistent with the polarization theory where routine replacing technological advances permanently reduce demand for middle skill labor thus contributing to jobless recoveries jel e32 e24

a review of the costs and benefits of demand response for electricity in the uk the recent policy discussion in the uk on the economic case for demand response dr calls for a reflection on available evidence regarding its costs and benefits existing studies tend to consider the size of investments and returns of certain forms of dr in isolation and do not consider economic welfare effects from review of existing studies policy documents and some simple modelling of benefits of dr in providing reserve for unforeseen events we demonstrate that the economic case for dr in uk electricity markets is positive consideration of economic welfare gains is provided

gender specific starting point bias in choice experiments evidence from an empirical study abstract in this paper we test whether preferences and willingness to pay estimates obtained in a choice experiment study are susceptible to starting point bias as is often the case in dichotomous choice contingent valuation studies on the basis of a multinomial probit model we find that preferences are indeed susceptible to starting point bias in a split sample design our results suggest that varying the price levels displayed in a so called instructional choice set presented prior to the actual preference eliciting choice sets significantly impacts respondents preferences and willingness to pay for protecting danish nature areas from new motorway development in particular our results show that the bias is gender specific only female respondents are significantly affected results further reveal that the impact of the starting point bias decays as respondents evaluate more and more choice sets this supports the discovered preference hypothesis and on the basis of this we suggest a number of ways to potentially mitigate the starting point bias

on unemployment cycles in the euro area 1999 2018 abstract this paper studies the recurrent sources of unit root unemployment fluctuations in greece italy portugal spain and the euro area by integrating wage markup and labor disutility shocks that exhibit permanent euro area wide shifts country specific trend developments and stationary changes in an estimated dsge model in all economies these labor market shocks account for a negligible share of unemployment cycles demand shocks explain about 40 of them contribute to the pre crisis convergence of unemployment rates and shape the unemployment spikes during the great recession cross country relative price distortions and supply factors account for about 40 and 20 of those cycles respectively

do hypothetical and actual marginal willingness to pay differ in choice experiments application to the valuation of the environment abstract in this paper we test the validity of choice experiments with donations for environmental projects in particular we test whether or not there are differences in preferences between a hypothetical and an actual choice experiment our experiments indicate no differences in addition internal tests of validity indicate transitive and stable preferences in both experiments although there are some indications of possible learning effects during the experiment

is modern technology responsible for jobless recoveries since the early 1990s recoveries from recessions in the us have been plagued by weak employment growth we investigate whether a similar problem afflicts other developed economies and whether technology is a culprit we study recoveries from 71 recessions in 28 industries and 17 countries from 1970 2011 we find that though gdp recovered more slowly after recent recessions employment did not industries that used more routine tasks and those more exposed to robotization did not recently experience slower employment recoveries finally middle skill employment did not recover more slowly after recent recessions and this pattern was no different in routine intensive industries

have standard vars remained stable since the crisis small or medium scale vars are commonly used in applied macroeconomics for forecasting and evaluating the shock transmission mechanism this requires the var parameters to be stable over the evaluation and forecast sample or to explicitly consider parameter time variation the earlier literature focused on whether there were sizable parameter changes in the early 1980s in either the conditional mean or variance parameters and in the subsequent period till the beginning of the new century in this paper we conduct a similar analysis but focus on the effects of the recent crisis using a range of techniques we provide substantial evidence against parameter stability the evolution of the unemployment rate seems particularly different relative to its past behavior we then discuss and evaluate alternative methods to handle parameter instability in a forecasting context while none of the methods clearly emerges as best some techniques turn out to be useful to improve the forecasting performance

robotization and labour dislocation in the manufacturing sectors of oecd countries a panel var approach robots are the most important innovation which has affected the production process in the last three decades thanks to the latest advances in technology they have been able to perform an ever inc

dissecting us recoveries abstract we propose a set of new quantitative measures to characterize more fully the features of economic recoveries we apply these measures to post war us expansions and use cluster analysis to determine that there are two different types of recoveries in recent us economic history with most expansions before 1984 great moderation looking quite different from those after

slow recoveries a structural interpretation an analysis of the speed of recovery of employment unemployment and gdp following business cycle troughs in the postwar u s economy points to much slower recoveries in the three most recent episodes but does not reveal any signi cant change in the relation between gdp and employment or unemployment across recoveries this leads us to characterize the last three episodes as slow recoveries as opposed to jobless recoveries we use the estimated new keynesian model in gali smets wouters 2011 to provide a structural interpretation for the slower recoveries since the early nineties

starting point bias in dichotomous choice valuation with follow up questioning abstract follow up questions are frequently used to improve the efficiency of dichotomous choice contingent valuation questionnaires however a number of authors e g 12 16 have noted a significant difference between the wtp distributions implied by initial and follow up question responses this paper investigates starting point bias as one explanation for the phenomenon we develop a model of starting point bias in the context of dichotomous choice questioning with follow up using a monte carlo simulation to illustrate the potential bias imparted to wtp estimates an application is provided based on data from a cv study in northcentral iowa

smart demand response in china challenges and drivers abstract smart demand response sdr induces change in electricity consumption by end users in response to price signals or incentives via smart infrastructures in china sdr programs are instrumental in peak shaving renewables integration emissions reduction and grid reliability improvement previous literature has not captured the effects of the latest development of electricity market reform on sdr our work is distinguished from prior work by a comprehensively identifying china specific sdr challenges by contrasting these with international experience b identifying effective drivers to overcome new market challenges and c recommending policies and providing insights into china s future sdr development our paper identifies three major challenges for sdr development and adoption in china namely financial and market consumer and infrastructural challenges in parallel we identify drivers to overcome these challenges including electricity market reform introduction of new market entrants and development of decentralized electricity systems finally we put forth china specific policy recommendations including continuous market reform performance based regulations for national utilities a level playing field for new market entrants and investments on consumer based technologies these measures aim to create equitable compensations to sdr align the interests of utilities with sdr initiatives provide incentives for consumer outreach and improve the responsiveness of consumers to sdr signals

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

dynamic learning and context dependence in sequential attribute based stated preference valuation questions a hybrid stated preference model is presented that combines the referendum contingent valuation response format with an experimentally designed set of attributes a sequence of valuation questions is asked to a random sample in a mailout mail back format econometric analysis shows greater discrimination between alternatives in the final choice in the sequence and the vector of preference parameters shifts lead and lag choice sets have a structural influence on current choices and unobserved factors induce positive correlation across the responses these results indicate that people learn about their preferences for attributebased environmental goods by comparing attribute levels across choice sets

learning design contingent valuation ldcv noaa guidelines preference learning and coherent arbitrariness we extend the contingent valuation cv method to test three differing conceptions of individuals preferences as either i a priori well formed or readily divined and revealed through a single dichotomous choice question as per the noaa cv guidelines k arrow r solow p r portney e e leamer r radner h schuman report of the noaa panel on contingent valuation fed reg 58 1993 4601 4614 ii learned or discovered through a process of repetition and experience j a list does market experience eliminate market anomalies q j econ 2003 41 72 c r plott rational individual behaviour in markets and social choice processes the discovered preference hypothesis in k arrow e colombatto m perleman c schmidt eds rational foundations of economic behaviour macmillan london st martin s new york 1996 pp 225 250 iii internally coherent but strongly influenced by some initial arbitrary anchor d ariely g loewenstein d prelec coherent arbitrariness stable demand curves without stable preferences q j econ 118 1 2003 73 105 findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning in doing so we show that such a learning design cv method overturns the stylised facts of bias and anchoring within the double bound dichotomous choice elicitation format

the influence of task complexity on consumer choice a latent class model of decision strategy switching the literature indicating that person context and task specific factors cause consumers to utilize different decision strategies has generally failed to affect the specification of choice models used by practitioners and academics alike who still tend to assume an utility maximizing omniscient indefatigable consumer this article 1 introduces decision strategy selection within a maintained compensatory framework into aggregate choice models via latent classes which arise because of task complexity 2 it demonstrates that within an experimental choice task the model reflects changing aggregate preferences as choice complexity changes and as the task progresses the import of these findings for current practice model interpretation and future research needs is examined

monetary policy shocks we got news abstract we assess the role of monetary policy news shocks in the context of a medium scale dsge model estimated on us data we estimate several versions of the model and find decisive evidence in favour of the inclusion of monetary policy news shocks over a two quarter horizon according to our results monetary policy news shocks account for a non negligible fraction of the variance of real variables especially at shorter forecast horizons further we document that the importance of monetary policy news shocks goes beyond what was observed in recent years the historical importance of monetary policy news shocks dates back to the 1999 2006 period when the official fomc statements provided information about both the current policy setting and the expected future policy path we also show that adding monetary policy news shocks to the model does not lead to identification problems

position dependent order effects on the prediction of consumer preferences in repeated choice experiments abstractusing stated choice data collected by experimental design with repeated choice tasks this study developed an approach to quantify the position dependent order effects on the prediction of

money and capital in a persistent liquidity trap abstract using a monetary model with asset scarcity we show that a liquidity trap caused by a persistent deleveraging shock increases real cash holdings and decreases investment and output in the medium term this medium term supply side effect arises when firms face financial constraints policy implications differ from shorter run analyses implied by nominal rigidities quantitative easing leads to a deeper liquidity trap exiting the trap by increasing expected inflation or applying negative interest rates does not solve the asset scarcity problem a higher government debt helps exiting the liquidity trap and reduces asset scarcity but may hurt investment in the medium run