capacity utilization under regulatory constraints this paper presents a methodology for predicting the effect of quota type regulatory constraints on capacity utilization for a multiproduct profit maximizing firm the approach builds on recent advances in the use of virtual prices to model the effects of rationing this allows the effects of regulatory constraints to be examined ex ante the methodol ogy is illustrated through a case study of the imposition of output quotas in an open access marine fishing industry on the pacific coast of the united states the results suggest that for certain species output quotas can cause strong disinvestment incentives have been used for many years to analyze the current status of the economy the expansion ary or contractionary forces on investment and inflation and productivity movements tradi tional cu measures were based on the notion of maximum possible output recently economists have developed measures derived from the eco nomic theory of the firm and based instead on a notion of optimal output berndt and fuss 1986 hickman 1964 klein 1960 morrison 1985 1988 segerson and squires 1990a these measures assume that some inputs are quasi fixed and that capacity utilization is determined by the level of the quasi fixed input s relative to the level of output previous studies of theory based cu measures have generally assumed that the industry under study was free from regulatory constraints an exception is morrison s 1988 study which ana lyzed among other things the effect of pollution control regulations on capacity utiliza tion in the u s and canadian steel industries the analysis is retrospective however since it studied the impacts of regulations that were al ready in effect in many cases it would be useful to be able to predict the effect of proposed regulations on ca pacity utilization such prospective or ex ante analysis would provide regulators with useful information regarding the likely effect of alterna tive policies on investment incentives for exam ple regulatory production limits on a single product such as quotas may cause multiproduct firms to change the volume and mix of their production which could in turn change invest ment incentives 1 likewise input use restrictions could affect both output supplies and the de mands for unregulated inputs thereby altering investment incentives predictions of these changes would contribute to designing more ef fective public policies regulating capacity and in vestment

regional capital mobility in china economic reform with limited financial integration abstract this paper assesses the changes in the regional capital mobility in china during the period of economic reform in 1978 2008 by employing a panel time varying coefficient tvp model this approach is much more suitable to model china s evolution in the regional capital mobility than a standard structural break model as china s reforms took place gradually and were often implemented over several stages using the tvp model we find that 1 china s provincial capital mobility demonstrated a moderate improvement over the sample period but worsened temporarily between 1994 and 1997 this is probably due to the government s effort to combat inflation which reduced the investment and transfers to regions 2 regions with the most developed and least developed provinces experienced higher degree of capital mobility improvement than those in the middle

optimal nonparametric estimation of first price auctions this paper proposes a general approach and a computationally convenient estimation procedure for the structural analysis of auctioni data considering first price sealed bid auction models within the independent private value paradigm we show that the underlying distribution of bidders private values is identified from observed bids and the number of actual bidders without any parametric assumptions using the theoiy of minimax we establish the best rate of uniform convergence at which the latent density of private values can be estimated nonparametrically from available data we then propose a two step kernel based estimator that converges at the optimal rate

regional capital mobility in china 1978 2006 we examine cross region capital mobility in china and track how the degree of mobility has changed over time the effects of fiscal and redistributive activities of different levels of government in china on private capital mobility are taken into account our results indicate that there was a significant improvement in capital mobility over time in china particularly for private capital in the more developed regions the central and provincial governments via their taxation spending and transfers loosen the relationship between private saving and investment and appear to promote capital mobility particularly for less developed regions there are considerable differences between more and less developed regions in terms of the degree of capital market integration and the improvement in capital mobility over time the results have important policy implications on global re balancing as well as regional development gap and risk sharing within china

econometrics of ascending auctions by quantile regression this paper suggests an identification and estimation approach based on quantile regression to recover the underlying distribution of bidders private values in ascending auctions under the ipv paradigm the quantile regression approach provides a flexible and convenient parameterization of the private values distribution with an estimation methodology easy to implement and with several specification tests the quantile framework provides a new focus on the quantile level of the private values distribution in particular the seller s optimal screening level which can be very useful for bidders and seller an empirical application using data from the usfs timber auctions illustrates the methodology

is purchasing power parity overvalued the purpose of this paper is to re examine the hypothesis of long run purchasing power parity among industrial countries under the current float using the panel data approach we propose a new finite sample panel data unit root test procedure that allows for a general serial correlation structure and arbitrary contemporaneous correlation in model innovations across countries this procedure is then applied to the recently developed panel data unit root tests of im pesaran and shin 1996 and of maddala and wu 1999 the test results show sufficient evidence against the unit root null for most samples by comparing our results with the existing ones in the literature we found that the method of assuming a restrictive serial correlation structure tends to weaken evidence against the unit root null

identification in auctions with selective entry this paper considers nonparametric identification of a two stage entry and bidding game we call the affiliated signal as model this model assumes that potential bidders have private values observe signals of their values prior to entry and then choose whether to undertake a costly entry process but imposes only minimal structure on the relationship between signals and values it thereby nests a wide range of entry processes including in particular the samuelson 1985 and levin and smith 1994 models as special cases working within the as model we map variation in factors affecting entry behavior potential competition or entry costs into identified bounds on model fundamentals these bounds are constructive collapse to point identification when available entry variation is continuous and can readily be refined to produce the pointwise sharp identified set we then extend our core results to accommodate nonseparable unobserved auction level heterogeneity and potential endogeneity of entry shifters thereby establishing a formal identification framework for structural analysis of auctions with selective entry

industrial structure and capital flows this paper provides a new theory of international capital flows in a framework that integrates factor proportions based trade and financial capital flows a novel force emerges capital tends to flow toward countries that become more specialized in capital intensive industries this composition effect competes with the standard force that channels capital toward the location where it is scarcer if the composition effect dominates capital flows away from the country hit by a positive labor force productivity shock a flow reversal extended to a quantitative framework the model generates sizable current account imbalances between developing and developed countries broadly consistent with the data

itqs firm dynamics and wealth distribution does full tradability increase inequality concerns over the re distributive effects of individual transferable quotas itq s have led to restrictions on their tradability we consider a general equilibrium model with firm dynamics to evaluate the redistributive impact of changing the tradability of itqs a change in tradability would happen for example if permits are allowed to be traded as a separate asset from ownership of an active firm if the property right is associated with ownership of an active firm the permit can be leased in each period but it is not possible to exit the industry and keep the right however allowing the permits to be traded as a separate asset has two effects first it leads to a greater concentration of production in the industry second it directly converts a non tradable asset into a tradable one and this is equivalent to giving a lump sum transfer to all firms the first effect implies a concentration in revenues while the second implies a redistribution of wealth we calibrate our model to match the observed increase in revenue inequality in the northeast multispecies groundfish u s fishery we show that although observed revenue inequality measured by the gini coefficient increases by 12 wealth inequality is reduced by 40

comparing open and sealed bid auctions evidence from timber auctions we study entry and bidding patterns in sealed bid and open auctions using data from the u s forest service timber auctions we document a set of systematic effects sealed bid auctions attract more small bidders shift the allocation toward these bidders and can also generate higher revenue a private value auction model with endogenous participation can account for these qualitative effects of auction format we estimate the model s parameters and show that it can explain the quantitative effects as well we then use the model to assess bidder competitiveness which has important consequences for auction design

risk aversion and optimal reserve prices in first and second price auctions abstract we analyze the effects of buyer and seller risk aversion in first and second price auctions in the classic setting of symmetric and independent private values we show that the seller s optimal reserve price decreases in his own risk aversion and more so in the first price auction the reserve price also decreases in the buyers risk aversion in the first price auction thus greater risk aversion increases ex post efficiency in both auctions especially that of the first price auction at the interim stage the first price auction is preferred by all buyer types in a lower interval as well as by the seller

saving investment associations and capital mobility on the evidence from japanese regional data abstract the paper examines the magnitude of the saving retention coefficient b in a setting of known near perfect capital mobility japanese regions first we find that on total regional saving and investment rate data inclusive of regional government saving and investment the estimate of b is negative this negative relationship in the total rates across japanese regions appears to arise from the strong negative association in the government saving and investment rates second on private regional investment and saving rate data b is insignificantly different from zero this is evidence consistent with the hypothesis of feldstein and horioka economic journal 1980 that in a financially integrated economy b would be close to zero

economic inefficiency in a revenue setting the norwegian whitefish fishery the main focus in the inefficiency literature is on suboptimal input use and how this causes increased costs due to technical and allocative inefficiency production or cost functions are then typ

the effect of bidders asymmetries on expected revenue in auctions abstract bidders asymmetries are widespread in auction markets yet their impact on behavior and ultimately revenue and profits is still not well understood this paper defines a natural benchmark auction environment to which to compare any private values auction with asymmetrically distributed valuations the main result is that the expected revenue from the benchmark auction dominates that from the asymmetric auction both in the first price auction and the second price auction moreover for classes of distributions that lend themselves to a quasi ordering of more or less asymmetric configurations we prove that the expected revenue is lower the more asymmetric bidders are these results formalize the idea that competition is reduced by bidders asymmetries applications to merger analysis joint bidding and investment are discussed

can purse seiners target yellowfin tuna both purse seine and longline fleets exploit yellowfin tuna in the western pa cific region management options available to achieve the optimal allocation of the yellowfin stock depend on whether purse seiners can con trol the species mix of their catch by targeting their fishing effort a fishing strategy to target effort on juvenile yellowfin is discussed and a supply model based on a revenue maximizing framework is estimated using data of japanese and u s purse seine vessels in papua new guinea the hypothesis of targeting is con firmed for the more modern u s fleet but not for the more traditional japanese vessels jel q22

private property and economic efficiency a study of a common pool resource abstract the british columbia halibut fishery provides a natural experiment of the effects of privatizing the commons using firm level data from the fishery 2 years before private harvesting rights were introduced the year they were implemented and 3 years afterward a stochastic frontier is estimated to test for changes in technical allocative and economic efficiency the study indicates that 1 the short run efficiency gains from privatization may take several years to materialize and can be compromised by restrictions on transferability duration and divisibility of the property right 2 substantial long run gains in efficiency can be jeopardized by preexisting regulations and the bundling of the property right to the capital stock and 3 the gains from privatization are not just in terms of cost efficiency but include important benefits in revenue and product form

sustainable fisheries development in the tropics trawlers and licence limitation in malaysia sustainable fisheries development requires sound fisheries management area licence limitation programmes may form the cornerstone for most tropical multispecies fisheries management programmes an empirical analysis of peninsular malaysian fishing trawlers is used to design an area licence limitation programme that conforms to the multiproduct production technology and cost and revenue structures to best accommodate condtions of asymmetric information between the regulator and fishing vessels

consumption risk sharing in china this paper empirically examines the degree of regional consumption risk sharing in china it finds that less risk sharing is taking place across chinese provinces than across us states and canadian provinces although its extent across the latter is somewhat higher than across the national boundaries of industrial countries specifically about half of the fitted annual variation in provincial consumption growth is common to all chinese provinces compared with more than two thirds less than one third in the case of us states and canadian provinces g 7 countries my estimates reveal that chinese households would be willing to pay dearly to insure their consumption against idiosyncratic shocks

entry and competition effects in first price auctions theory and evidence from procurement auctions motivated by several interesting features of the highway mowing auction data from the texas department of transportation tdot we study three competing procurement auction models with endogenous entry our entry and bidding models provide several interesting implications for the first time we show that even within an independent private value paradigm as the number of potential bidders increases bidders equilibrium bidding behaviour can become less aggressive and the expected procurement cost may rise because the entry effect is always positive and may dominate the negative competition effect we then develop structural models of entry and bidding corresponding to the three models under consideration controlling for unobserved auction heterogeneity and use the recently developed semi parametric bayesian estimation method to analyse the data we select the model that best fits the data and use the corresponding structural estimates to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost copyright 2009 wiley blackwell

explaining saving investment correlations national saving and investment rates are highly positively correlated in virtually all countries this is puzzling as it apparently implies a low degree of international capital mobility this paper shows that the observed positive correlation between national saving and investment rates arises naturally within a quantitatively restricted equilibrium model with perfect mobility of financial and physical capital the model is consistent with the fact that saving investment correlations are larger for larger countries but are still substantial for small countries further the model is consistent with the finding that current account deficits tend to be associated with investment booms copyright 1993 by american economic association

hidden flexibility institutions incentives and the margins of selectivity in fishing the degree to which selectivity in fisheries is malleable to changes in incentive structures is critical for policy design we examine data for a multispecies trawl fishery before and after a transition from management under common pool quotas to a fishery cooperative and note a substantial shift in postcooperative catch from bycatch and toward valuable target species we examine the margins used to affect catch composition finding that large and fine scale spatial decision making and avoidance of night fishing were critical we argue that the poor incentives for selectivity in many systems may obscure significant flexibility in multispecies production technologies

production quota in multiproduct pacific fisheries abstract assessing the individual firm s technology and costs in a multispecies fishery allows design of a more effective output quota prior to regulation by anticipating and controlling for the firm s regulation induced responses an empirical study of a pacific coast trawl fishery indicates that the firm s flexibility of product decision is tightly constrained by its technology and cost structure hence as the resource stock for the regulated species sablefish deteriorates and the trip quota progressively tightens the firm cannot sufficiently reorganize its product bundle to preclude increasingly large sablefish disposal this defeats the purpose of the production quota

econometrics of first price auctions in this paper we propose an estimation method for the empirical study of theoretical auction models we focus on first price sealed bid and descending auctions and we adopt the private value paradigm where each bidder is assumed to have a different private value only known to him for the object that is auctioned following mcfadden 1989 and pakes and pollard 1989 our proposed method is based on simulations specifically the method relies on a simulated nonlinear least squares objective function appropriately adjusted so as to obtain consistent estimates of the parameters of interest we illustrate the proposed method by studying a market of agricultural products where descending auctions are used our analysis takes into account heterogeneity of the auctioned objects and the fact that only the winning bid is observed we estimate the parameters that characterize the distribution of the unobserved private values for each auctioned object

bidder collusion at forest service timber sales allegations of bidder collusion at forest service timber sales in the pacific northwest were common in the 1970s of course prices may be low for reasons other than collusion we formulate an empirical model that allows for both bidder collusion and supply effects and in which we control for demand conditions noncooperative behavior in which a single unit is sold the standard auction model is a special case it is found to be definitively outperformed by a model of collusion we also find that supply effects are dominated by collusion in determining the winning bids in the market

estimating risk aversion from ascending and sealed bid auctions the case of timber auction data estimating bidders risk aversion in auctions is a challeging problem because of identification issues this paper takes advantage of bidding data from two auction designs to identify nonparametrically the bidders utility function within a private value framework in particular ascending auction data allow us to recover the latent distribution of private values while first price sealed bid auction data allow us to recover the bidders utility function this leads to a nonparametric estimator an application to the us forest service timber auctions is proposed estimated utility functions display concavity which can be partly captured by constant relative risk aversion

assessing technical efficiency in commercial fisheries the mid atlantic sea scallop fishery despite the extensive effort to research issues of allocative efficiency in fisheries little empirical analysis of technical efficiency te in fisheries exists this study examines vessel efficiency using a stochastic production frontier based on a sample of sea scallop vessels operating in the mid atlantic between 1987 and 1990 estimates of te are computed and compared with input usage resource conditions economic performance and recently imposed regulations the analysis suggests that owners and captains only partially compensate for changes in resource conditions through the use of labor and fishing effort and recent regulations may improve overall te in the short run

semiparametric estimation of first price auctions with risk averse bidders in view of the non identification of the first price auction model with risk averse bidders this paper proposes some parametric identifying restrictions and a semiparametric estimator for the risk aversion parameter s and the latent distribution of private values specifically we exploit heterogeneity across auctioned objects to establish semiparametric identification under a conditional quantile restriction of the bidders private value distribution and a parameterization of the bidders utility function we develop a multistep semiparametric method and we show that our semiparametric estimator of the utility function parameter s converges at the optimal rate which is slower than the parametric one but independent of the dimension of the exogenous variables thereby avoiding the curse of dimensionality we then consider various extensions including a binding reserve price affiliation among private values and asymmetric bidders the method is illustrated on u s forest service timber sales and bidders risk neutrality is rejected

identification and inference in ascending auctions with correlated private values we introduce and apply a new nonparametric approach to identification and inference on data from ascending auctions we exploit variation in the number of bidders across auctions to nonparametrically identify useful bounds on seller profit and bidder surplus using a general model of correlated private values that nests the standard independent private values ipv model we also translate our identified bounds into closed form and asymptotically valid confidence intervals for several economic measures of interest applying our methods to much studied u s forest service timber auctions we find evidence of correlation among values after controlling for a rich vector of relevant auction covariates this correlation causes expected profit the profit maximizing reserve price and bidder surplus to be substantially lower than conventional ipv analysis of the data would suggest

when should sellers use auctions the simultaneous bid auction is a standard method for sellers to solicit offers from buyers a simple alternative is for a seller to ask buyers to make offers sequentially if it is costly for buyers to participate the sequential mechanism will tend to be more efficient than the simultaneous auction because later potential buyers can condition their participation decisions on earlier bids however the sequential mechanism s greater efficiency may not produce higher revenues because while the possibility of deterring later potential entrants can lead early bidders to bid aggressively the fact that later firms might be deterred will tend to reduce revenues the relative revenue performance of the mechanisms will therefore depend on whether the threat of potential future competition which can raise bids in the sequential mechanism is more valuable to the seller than actual competition which will tend to be greater in the simultaneous auction the relative revenue performance of these alternative mechanisms has direct implications for how assets should be sold in the case of how to structure the sale of corporations this question has attracted attention from practitioners and commentators since the delaware supreme court s 1986 revlon decision charged a board overseeing the sale of a company with the duty of getting the best price for the stockholders revlon v mcandrews and forbes holdings 1986 in practice

semiparametric estimation of the optimal reserve price in first price auctions the optimal reserve price in the independent private value paradigm is generally expressed as a functional of the latent distribution of private signals which is by nature unobserved this feature has limited the implementation of the optimal reserve price in practice in this article we consider first price auctions within the general affiliated private values paradigm we show that the seller s expected profit can be written as a functional of the observed bid distribution we propose a semiparametric extremum estimator for estimating consistently the optimal reserve price from observed bids as an illustration we consider the outer continental shelf ocs wildcat auctions

auctions with resale markets an application to u s forest service timber sales when bidders anticipate an opportunity for resale trade the value of winning an auction is determined in part by the option values of buying and selling in the secondary market one implication is that a bidder s willingness to pay at an auction increases with the expected level of competition between resale buyers empirical evidence from auctions of timber contracts supports this prediction and rejects standard models that ignore resale the estimated effect is smaller after policy changes expected to diminish the prevalence of resale additional evidence supports the predicted presence of a common value element introduced by the resale opportunity

multi output nonfrontier primal measures of capacity and capacity utilization this article implements an econometric approach for generating primal capacity output and utilization measures for fisheries in situations where regulatory environmental and resource conditions affect catch levels but are not independently identified in the data frontier based capacity models may interpret such impacts as production inefficiency however if such inefficiencies are unlikely to be eliminated the implied potential output increases may be unrealistic we develop a multi output multi input stochastic transformation function framework that permits various assumptions about how output composition may change when operating at full capacity we apply our model to catcher processor vessels in the alaskan pollock fishery

fishing revenue productivity and product choice in the alaskan pollock fishery a key element in evaluating fishery management strategies is examining their effects on the economic performance of fishery participants yet nearly all empirical studies of fisheries focus exclusively on the amount of fish harvested the economic benefits derived from fish stocks involve the amount of revenue generated from fish processing which is linked to both the way fish are harvested and the products produced from the fish in this study we econometrically estimate a flexible revenue function for catcher processor vessels operating in the alaskan pollock fishery recognizing potential endogeneity and a variety of fishing inputs and conditions we find significant own price supply responses and product substitutability and enhanced revenues from increased fishing days and tow duration after a regulatory change introduced property rights through a new fishing cooperative we also find significant growth in economic productivity or higher revenues over time after controlling for observed productive factors and price changes which exceeds that attributable to increased harvest these patterns suggest that the move to rights based management has contributed significantly to economic performance in the pollock fishery

domestic savings and intra national capital flows abstract regional british data on savings and investment are shown to be uncorrelated consistent with the hypothesis of perfectly mobile intra national capital flows

identification of standard auction models this paper presents new identification results for models of first price second price ascending english and descending dutch auctions we consider a general specification of the latent demand and information structure nesting both private values and common values models and allowing correlated types as well as ex ante asymmetry we address identification of a series of nested models and derive testable restrictions enabling discrimination between models on the basis of observed data the simplest model symmetric independent private values is nonparametrically identified even if only the transaction price from each auction is observed for richer models identification and testable restrictions may be obtained when additional information of one or more of the following types is available i the identity of the winning bidder or other bidders ii one or more bids in addition to the transaction price iii exogenous variation in the number of bidders iv bidder specific covariates while many private values pv models are nonparametrically identified and testable with commonly available data identification of common values cv models requires stringent assumptions nonetheless the pv model can be tested against the cv alternative even when neither model is identified

public regulation and the structure of production in multiproduct industries an application to the new england otter trawl industry this article considers the problem of managing multispecies fishing industries as one of regulating the production of individual multiproduct firms the multispecies new england otter trawl industry is examined within this framework empirical results derived from estimating a multiproduct profitfunction indicate that management consistent with the structures ofmultiproduct production and costs would directly regulate inputs little support is provided for applying the traditional bioeconomic model to the fishery studied

an analysis of the efficient production frontier in the fishery implications for enhanced fisheries management the transformation relationship between factor inputs and outputs the efficient production frontier epf contains important information for fisheries managers a directional technology distance function model of the harvesting technology is used to measure changes in the epf over time frontier shifts are summarized with input and output based frontier indicators that are interpreted as measures of bioeconomic productivity change the model is applied to the mid atlantic surf clam and ocean quahog fishery

regional capital flows and economic regimes evidence from china abstract using provincial data from china this paper examines the pattern of capital flows in relation to the transition of economic regimes we show that fast growing provinces experienced less capital inflows before the large scale market reform contrary to the prediction of the neoclassical growth theory as china transitioned from the central planning economy to the market economy the negative correlation between productivity growth and capital inflows became much less pronounced from a regional perspective this finding suggests domestic institutional factors play an important role in shaping the pattern of capital flows

why doesn t capital flow from rich to poor countries an empirical investigation we examine the empirical role of difierent explanations for the lack of ows of capital from rich to poor countries the lucas paradox the theoretical explanations include difierences in fundamentals across countries and capital market imperfections we show that during 1970i2000 low institutional quality is the leading explanation for example improving peru s institutional quality to australia s level implies a quadrupling of foreign investment recent studies emphasize the role of institutions for achieving higher levels of income but remain silent on the speciflc mechanisms our results indicate that foreign investment might be a channel through which institutions afiect long run development

why does capital flow to rich states abstract the magnitude and the direction of net international capital flows do not fit neoclassical models the fifty u s states comprise an integrated capital market with very low barriers to cap

the relationship between domestic savings and investment the feldstein horioka test using japanese regional data abstract the feldstein horioka test on capital mobility applies to japanese intra national capital flows we find that savings and investment are insignificantly correlated this suggests that the high correlation observed by the previous studies is due to the currency premium