what separates us sources of resistance to globalization with increasing sophistication economists have been estimating gravity equations for five decades robust evidence shows that borders and distance impede trade by much more than tariffs or transports costs can explain we therefore advocate investigation of other sources of resistance despite the greater difficult involved in measuring and modelling them from our selective review of recent findings a unifying explanation emerges a legacy of historical isolation and conflict forged a world economy in which neither tastes nor information are homogeneously distributed cultural difference and inadequate information manifest themselves most strongly at national borders and over distance

the use and abuse of meta analysis in environmental and natural resource economics an assessment motivated by the 2006 report of a work group appointed by the environmental protection agency epa this paper examines the present state of meta analysis in environmental economics and offers recommendations for its future use to this end we summarize and assess 140 meta analyses from 125 published and unpublished studies covering 17 topical categories in environmental and resource economics first we provide several generic meta analysis models as reference points and discuss major estimation issues five econometric issues are identified as part of a complete analysis 1 sample selection criteria 2 basic data summary 3 primary data heterogeneity 4 heteroskedasticity and 5 non independence of multiple observations from primary studies second a tabular summary is presented for the 140 meta analyses with respect to estimation methods third a narrative summary is presented for 19 meta analyses including the three value of statistical life studies examined by the epa work group and one analysis from each of 16 other categories fourth we offer a set of best practice guidelines for future meta analyses in this and other areas of economics last the paper comments on the use of meta analytic methods for benefit transfers of environmental values

the effect of fdi on environmental emissions evidence from a meta analysis one important and frequently raised issue about foreign direct investment fdi is the potentially negative consequences for the environment the potential environmental cost due to increased emissions may undermine the economic gains associated with increases in fdi inflow although the literature is dominated with this adverse view of fdi on the environment there is also a possibility that fdi can contribute to a cleaner environment especially if fdi comes with green technologies and this creates spillovers for domestic industries theoretically the effect of fdi on the environment can be negative or positive to deal with the theoretical ambiguity about the fdi environment nexus many empirical studies have been conducted but their results only reinforce the controversy as they produce contrasting results we conduct a meta analysis of the effect of fdi on environmental emissions using 65 primary studies that produce 1006 elasticities our results show that the underlying effect of fdi on environmental emissions is close to zero however after accounting for heterogeneity in the studies we find that fdi significantly reduces environmental emissions results remain robust after disaggregating the effect for countries at different levels of development as well as for different pollutants

on the conservation of distance in international trade the volume of world trade has grown more than twice as fast as real world income since 1980 surprisingly the effect of distance on trade has increased during this period it could be that countries are trading greater volumes of goods that are highly sensitive to distance an alternative explanation is that distance has become more import for a significant share of goods using highly disaggregated bilateral trade data we find that adjustment in the composition of trade has not influenced the way in which distance affects trade in contrast for about 25 percent of industries distance has become more important this implies that the increased distance sensitivity of trade is a result of a change in relative trade costs that affects many industries as opposed to a shift to more distance sensitive products we also find that homogeneous products are twice as likely to have become more distance sensitive as compared with differentiated goods this is consistent with the hypothesis that falling search costs resulting from improvements in transport and communications are relatively more important for differentiated goods the results offer no evidence of the death of distance rather they suggest that distance related relative trade costs have remained unchanged or shifted in favor of proximate markets

testing models of consumer search using data on web browsing and purchasing behavior using a large data set on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various classical search models we nd that the benchmark model of sequential search with a known distributions of prices can be rejected based on the recall patterns we observe in the data moreover we show that even if consumers are initially unaware of the price distribution and have to learn the price distribution observed search behavior for given consumers over time is more consistent with non sequential search than sequential search with learning our

high and declining prices signal product quality high and declining prices signal a high quality product high prices are the efficient means of signaling because the consequent loss of sales volume is most damaging for lower cost lower quality products as time passes and the number of informed consumers increases the signaling distortion lessens resulting in a declining price profile the prediction of high and declining prices is robust across a variety of dynamic models and is consistent with recent empirical findings copyright 1991 by american economic association

modelling prices and the reputation of individual named wines this article develops empirical models to assess the relation between the reputation of an individual named wine and its price unrestricted and polynomial distributed lag models are used to assess

picture this a simple graph that reveals much ado about research funnel graphs provide a simple yet highly effective means to identify key features of an empirical literature this paper illustrates the use of funnel graphs to detect publication selection bias identify the existence of genuine empirical effects and discover potential moderator variables that can help to explain the wide variation routinely found among reported research findings applications include union productivity effects water price elasticities common currency trade effects minimum wage employment effects efficiency wages and the price elasticity of prescription drugs

beyond publication bias abstract this review considers several meta regression and graphical methods that can differentiate genuine empirical effect from publication bias publication selection exists when editors reviewers or researchers have a preference for statistically significant results because all areas of empirical research are susceptible to publication selection any average or tally of significant insignificant studies is likely to be biased and potentially misleading meta regression analysis can see through the murk of random sampling error and selected misspecification bias to identify the underlying statistical structures that characterize genuine empirical effect meta significance testing and precision effect testing pet are offered as a means to identify empirical effect beyond publication bias and are applied to four areas of empirical economics research minimum wage effects union productivity effects price elasticities and tests of the natural rate hypothesis

meta analysis of economics research reporting guidelines meta regression analysis mra can provide objective and comprehensive summaries of economics research their use has grown rapidly over the last few decades to improve transparency and to raise the quality of mra the meta analysis of economics research network maer net has created the below reporting guidelines future meta analyses in economics will be expected to follow these guidelines or give valid reasons why a meta analysis must deviate from them

insecurity and the pattern of trade an empirical investigation corruption and imperfect contract enforcement dramatically reduce international trade this paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade we find that inadequate institutions constrain trade as much as tariffs do we also find that omission of indices of institutional quality biases the estimates of typical gravity models obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods finally we argue that cross country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high income capital abundant countries trade disproportionately with each other

successful in the long run a meta regression analysis of persistent firm profits we study the profit persistence literature by applying meta regression analysis mra to a set of 36 empirical papers which analyze the persistence of abnormal firm profits over time the analyzed literature provides evidence for a mediocre degree of persistence in abnormal profits an initial analysis of the distribution of reported profit persistence estimates reveals some degree of excess variation this points toward publication bias that favors significant results independent of their algebraic sign the mra however reveals that publication bias is particularly favoring results that indicate profit persistence and thus contradict the neoclassical model of perfect competition moreover the mra enables to control for heterogeneity driven by the study design we find that the analyzed country developing vs developed the applied econometric approach as well as the analyzed period of time are significant drivers of heterogeneity in reported persistence estimates

worker participation and productivity in labor managed and participatory capitalist firms a meta analysis using meta analytic techniques the author synthesizes the results of 43 published studies to investigate the effects on productivity of various forms of worker participation worker participation in decision making mandated codetermination profit sharing worker ownership employee stock ownership or individual worker ownership of the firm s assets and collective ownership of assets workers collective ownership of reserves over which they have no individual claim he finds that codetermination laws are negatively associated with productivity but profit sharing worker ownership and worker participation in decision making are all positively associated with productivity all the observed correlations are stronger among labor managed firms firms owned and controlled by workers than among participatory capitalist firms firms adopting one or more participation schemes involving employees such as esops or quality circles

in a world without borders the impact of taxes on internet commerce the rapid rise in sales over the internet and the fact that most internet buyers pay no sales tax has ignited a considerable debate over taxes and the internet this paper uses new data on the purchase decisions of approximately 25 000 online users to examine the effect of local sales taxes on internet commerce the results suggest that controlling for observable characteristics people living in high sales taxes locations are significantly more likely to buy online the results are quite robust and cannot be explained by unobserved technological sophistication shopping costs or other alternative explanations the magnitudes in the paper suggest that applying existing sales taxes to internet commerce might reduce the number of online buyers by up to 24 percent

hedonic prices for fish tuna prices in hawaii over the past two decades the marketing of fish has recognized the importance of quality yet empirical analysis of market transactions could give us little insight into the value of different qualities of fish because market data are typically aggregated we exploit a dataset on the auction price of tuna sold in hawaii to estimate a hedonic model the model provides empirical estimates of price increments due to species quality of the fish such as size or fat content method of handling and market conditions the empirical results are also used to estimate price flexibilities for landings in hawaii

are all economic facts greatly exaggerated theory competition and selectivity there is growing concern and mounting evidence of selectivity in empirical economics most empirical economic literatures have a truncated distribution of results the aim of this paper is to explore the link between publication selectivity and theory contests this link is confirmed through the analysis of 87 distinct empirical economics literatures involving more than three and a half thousand separate empirical studies using objective measures of both selectivity and contests our meta meta analysis shows that publication selection is widespread but not universal it distorts scientific inference with potentially adverse effects on policy making but competition and debate between rival theories reduces this selectivity and thereby improves economic inference

the distance puzzle and low income countries an update the distance effect measuring the elasticity of trade flows to distance has been found to be rising since the early 1970s in a host of studies based on the gravity model leading observers to call it the distance puzzle however this puzzle is regularly challenged by new developments in the specification of the gravity equation or in its estimations we propose an original survey on the existing methods used to quantify the distance puzzle basically the computation of an average distance of trade a meta analysis on existing gravity papers and the implementation of recent econometric developments all on a well specified gravity equation both in cross section and panel data we apply all these methods to a unique large database 124 countries from 1970 to 2006 it appears that if all these new developments can change the amplitude of the increase in the trade elasticity to distance none solve the distance puzzle we confirm the existence of this puzzle and identify that it only applies to low income countries which exhibit a significant rising distance effect on their trade of around 18 between 1970 and 2006 while the distance puzzle for trade within richer countries disappears

the pricing of experience goods the example of en primeur wine the market for primeur wine in the bordeaux region allows producers to sell wine that is still in barrels as with all experience goods producers send quality signals to uninformed buyers using original data on bordeaux wines we show that the pricing behavior of producers depends to a large extent on their reputation and much less on short term changes in quality as measured by experts grades we also find that the primeur price has an informative role since a 10 increase in primeur price leads to a 3 increase in prices on the market for bottled wine

the dynamics of seller reputation evidence from ebay we construct a panel of ebay seller histories and examine the importance of ebay s reputation mechanism we find that when a seller first receives negative feedback his weekly sales rate drops from a positive 7 to a negative 7 subsequent negative feedback ratings arrive 25 more rapidly than the first one and don t have nearly as much impact as the first one we also find that a seller is more likely to exit the lower his reputation is and that just before exiting sellers receive more negative feedback than their lifetime average we consider a series of theoretical models and measure them against these empirical results regardless of which theoretical model best explains the data an important conclusion of our paper is that ebay s reputation system gives way to noticeable strategic responses from both buyers and sellers

asymmetric information adverse selection and online disclosure the case of ebay motors since the pioneering work of akerlof 1970 economists have been aware of the adverse selection problem that information asymmetries can create in used goods markets the remarkable growth in online auctions of used goods where buyers generally purchase sight unseen therefore poses a puzzle i argue that given a means for credible information disclosure sellers will voluntarily disclose their private information to buyers through online media this limits information asymmetries and adverse selection to test this theory i examine the role of information in a large online used car market ebay motors i nd that sellers selectively disclose information that information asymmetries are reduced by these disclosures and that online media such as photos text and graphics provide a rich environment for information disclosure

taste or reputation what drives market prices in the wine industry estimation of a hedonic model for italian premium wines the aim of this article is to provide new evidence on the factors affecting wine prices on both methodological and factual grounds on the methodological ground this study is the first to apply a general box cox transformation within the context of hedonic models which exploit all the variables objective and sensorial characteristics reputation pointed out by previous literature as relevant in driving market prices on the factual ground the article fills the lack of empirical evidence on the issue for italy one of the leading wine producers by using a large data set on two premium quality wines barolo and barbaresco covering the 1995 1998 vintages our results support the evidence obtained using data from other countries showing that sensorial traits the reputation of wines and producers as well as objective variables are all important factors influencing the consumers willingness to pay more importantly by resorting to a nonnested statistical test vuong 1989 we compare two alternative

predicting the quality and prices of bordeaux wine bordeaux wines have been made in much the same way for centuries this article shows that the variability in the quality and prices of bordeaux vintages is predicted by the weather that created the grapes the price equation provides a measure of the real rate of return to holding wines about 2 3 per annum and implies far greater variability in the early or en primeur wine prices than is observed the analysis provides a useful basis for assessing market inefficiency the effect of climate change on the wine industry and the role of expert opinion in determining wine prices

a simple solution to the distance puzzle in international trade abstract i propose a simple solution to the distance puzzle in international trade contrary to existing estimates of persistent or increasing distance effects on trade i offer robust evidence that the impact of distance on trade has fallen steadily over time

does standardized information in online markets disproportionately benefit job applicants from less developed countries abstract we examine trade in services between employers from developed countries dcs and workers from less developed countries ldcs on an online platform for contract labor we report evidence that 1 dc employers are less likely to hire ldc compared to dc workers even after controlling for a wide range of observables 2 workers with standardized and verified work history information are more likely to be hired and 3 information on verified work history disproportionately benefits ldc contractors the ldc premium also applies to additional outcomes including wage bids obtaining an interview and being shortlisted in addition the evidence suggests that informational limits to trade may be addressed through a variety of market design approaches for instance an online monitoring tool substitutes for verified work history information

the effect of fragmentation in trading on market quality in the uk equity market summary we investigate the effects of fragmentation in equity markets on the quality of trading outcomes in a panel of ftse stocks over the period 2008 2011 this period coincided with a great deal of turbulence in the uk equity markets which had multiple causes that need to be controlled for to achieve this we use the common correlated effects estimator for large heterogeneous panels we extend this estimator to quantile regression to analyse the whole conditional distribution of market quality we find that both fragmentation in visible order books and dark trading that is offered outside the visible order book lower volatility but dark trading increases the variability of volatility while visible fragmentation has the opposite effect in particular at the upper quantiles of the conditional distribution the transition from a monopolistic to a fragmented market is non monotonic with respect to the degree of fragmentation copyright 2015 john wiley sons ltd

wine prices and quality ratings a meta regression analysis this article examines the empirical support for the hypothesized hedonic theoretical relation between the price of wine and its quality the examination considers over 180 hedonic wine price models developed over 20 years covering many countries the research identifies that the relation between the price of wine and its sensory quality rating is a moderate partial correlation of 0 30 this correlation exists despite the lack of information held by consumers about a wine s quality and the inconsistency of expert tasters when evaluating wines the results identify a moderate price quality correlation which suggests the existence of strategic buying opportunities for better informed consumers strategic price setting possibilities may also exist for wine producers given the incomplete quality information held by consumers the results from the meta regression analysis point to the absence of any publication bias and attribute the observed asymmetry in estimates to study heterogeneity the analysis suggests the observed heterogeneity is explained by the importance of a wine s reputation the use of the 100 point quality rating scale the analysis of a single wine variety style and the employed functional form the most important implication from the analysis is the relative importance of a wine s reputation over its sensory quality inferring that producers need to sustain the sensory quality of a wine over time to extract appropriate returns the reputation of the wine producer is found not to influence the strength of the price quality relationship this finding does not contradict the importance of wine producer reputation in directly influencing prices

does the internet defy the law of gravity abstract we show that gravity holds in the case of digital goods consumed over the internet that have no trading costs therefore trade costs cannot fully account for the effects of distance on trade in particular we show that americans are more likely to visit websites from nearby countries even controlling for language income immigrant stock etc furthermore we show that this effect only holds for taste dependent digital products such as music games and pornography for these a 1 increase in physical distance reduces website visits by 3 25 for non taste dependent products such as software distance has no statistical effect

sales taxes and internet commerce we estimate the sensitivity of internet retail purchasing to sales taxes using ebay data our first approach exploits the fact that a seller s location and therefore the applicable tax rate is revealed only after a buyer has expressed interest in an item we document how adverse tax surprises reduce the likelihood of purchase and shift subsequent purchases toward out of state sellers we then use more aggregated data to estimate that every one percentage point increase in a state s sales tax increases online purchases by state residents by almost 2 percent while decreasing their online purchases from state retailers by 3 4 percent jel h71 l81 l86

towards a differentiated modelling of origin effects in hedonic analysis an application to auction prices of specialty coffee abstract origin matters this has been shown by numerous studies using either discrete choice or hedonic approaches to derive implicit prices for origin as a product attribute in most of the hedonic studies intercept dummies were introduced for specific regional origins and statistically significant coefficients of those variables were seen as an indication of either a superior or inferior reputation compared to products from other origins we argue that hedonic pricing models of this type may be too simple to detect the true origin effects if assessments of a product s sensory quality are available and interact with prior beliefs about reputation based on a supply and demand framework to explain auction prices a reduced form hedonic pricing model is suggested that includes intercept as well as slope dummy effects of the regional origin because reputation and the objective product quality are particularly important for markets of differentiated high quality foods and beverages we analyze electronic auction markets for specialty coffees the findings for the cup of excellence data reveal that it is important to distinguish reputation sensory quality and their interaction as determinants of coffee auction prices as well as varying origin impacts across market segments

there goes gravity ebay and the death of distance we compare the effect of geographic distance on ebay and total international trade flows we consider the same 61 countries and basket of goods for both types of transactions we find the effect of distance to be on average 65 smaller on ebay we argue this difference is due to a reduction in search costs it increases with product differentiation and is higher when trade partners speak different languages when corruption in the exporting country is high and when uncertainty avoidance is high in the importing country moreover ebay s seller rating technology further reduces the distance effect on ebay

estimation of a hedonic price equation for bordeaux wine does quality matter in this paper the hedonic price technique is applied to bordeaux wine in the hedonic price function we include not only the objective characteristics appearing on the label of the bottle but also the sensory characteristics of the wine our data come from an experimental study in which juries have evaluated and graded a sample of bordeaux wines the estimation of the hedonic price equation shows that the market price is essentially determined by the objective characteristics the estimation of a jury grade equation shows that quality unlike the market price is essentially determined by the sensory characteristics