regulatory reform in britain regulatory reform in britain john kay and john vickers major sectors of the british economy are currently undergoing far reaching regulatory reform deregulation removal of barriers to competition and the introduction of new methods of regulation are occurring notably in financial services some of the professions and in utility industries such as telecommunications gas and electricity this paper gives an economic assessment of these developments the authors examine the root causes of market failure that call for regulation externalities monopoly and information problems and the pros and cons of various regulatory responses a broad distinction is drawn between structural regulation the determination of which firms or types of firms can engage in which activities and conduct regulation the control of how firms behave in their chosen activities recent examples of deregulation plus re regulation in britain are seen in part as a shift from structural to conduct regulation the relative merits of the two modes of regulation are complex to assess but it is argued that some recent regulatory reforms are placing undue reliance on conduct regulation as well as assessing individual industries the authors draw general conclusions about the desirability of regulatory solutions that make full use of market forces

an initial investigation into the impact of tourism on local budgets a comparative analysis of spanish municipalities abstract the spanish federation of municipalities has particularly since 2008 been vocal about a chronic deficit situation caused by high public expenditures in tourist areas within this context new strategies to increase revenues have been proposed including the introduction of tourist taxes this paper contributes to this debate by determining if tourism activity actually has a negative impact on local finances in spain to that end a comparative analysis of budget structures between tourism intensive and non tourism intensive municipalities is undertaken using data from more than 3200 local corporations for the years 2001 2010 the determinants of expenditures revenues and deficit per capita are identified using a linear regression the results indicate a direct relationship between tourism intensity and local deficits only in the smallest and largest municipalities while a beneficial effect is actually seen in the remainder of the sample in view of this evidence we recommend revising the existing regulations to allow for municipalities below 20 000 residents to be officially recognized as tourist municipalities so that they can benefit from that status in addition the option of introducing new tourist taxes should be more restricted in scope and depend upon further evidence of possible cost inefficiency in the affected municipalities

tourism and environmental taxes with special reference to the balearic ecotax abstract during the last few decades tourism has undergone rapid growth however it seems clear that this growth is not exempt from certain costs economists attention is increasingly directed at the economic social cultural and environmental repercussions of tourism regarded as externalities focusing on the aforementioned repercussions the aim of this study is to confirm both the existence of external environmental costs and the need to internalise them with the aid of appropriate economic instruments in this respect an outline is given of the recent proposal by the government of the autonomous community of the balearic islands to introduce a tourist tax on visitors presented to public opinion in the form of an environmental tax and a critical review is made of the proposal in the light of a number of criteria regarded as relevant in the description design and implementation of these taxes

minding america s business the decline and rise of the american economy only the economy s competitive position internationally but also the nation s moral fiber in the liberal camp the present confusion which has arisen out of attempts to reconcile reagan s new federalism with longstanding democratic demands for a large share of public goods in the economy has been camouflaged by the visions of felix rohatyn and lester thurow who want to rebuild america s in

political holes in the economy the business network of partisan firms in hungary this article redirects attention from the question of how business ties have an impact on politics to the question of how political ties have an impact on business specifically do divisions within the field of politics become divisions in the field of business networks to study co evolution of political and economic fields we conducted a historical network analysis of the relationship between firm to party ties and firm to firm ties in the hungarian economy we constructed a dataset of all senior managers and boards of directors of 1 696 corporations and the complete set of all political officeholders from 1987 to 2001 findings from our field interviews and dyadic logistic regression models demonstrate that director interlocks depend to a significant extent on political affiliations although the political and economic fields have been institutionally separated firms and parties have become organizationally entangled firms of either left or right political affiliation exhibit a preference for par

emission taxes and optimal refunding schemes with endogenous market structure the purpose of this paper is to investigate optimal schemes for refunding the emission tax in a free entry market where the production process generates emissions we consider the regulation by a three part tax policy the government sets an emission tax a refunding scheme and an entry license tax in contrast to the case of the two part tax refund policy under no entry we show that even if it is impossible to obtain subsidies from outside the first best outcome is always attained further the government s budget constraint is binding under the optimal schemes our result implies that the tax refund system works effectively in a market with endogenous entry

remodeling international tourism demand old theory and new evidence abstract the purpose of this study is to advance the tourism demand theory by excluding simultaneous effects of exchange rates and prices in empirical models formulating an alternative pricing modus operandi consistent with recent research in the area and demonstrating the efficacy of the use of an industrial production index ipi as a proxy for income a panel fully modified ordinary least squares fmols method is employed to estimate the inbound tourism demand for turkey study findings suggest that the inclusion of exchange rates and prices as mutually exclusive components can be misleading the ipi is not a good proxy for income and country specific coefficients need to be analyzed to accurately explain determinants of tourism demand for countries in the panel

renewable energy as a luxury a qualitative comparative analysis of the role of the economy in the eu s renewable energy transitions during the double crisis the european union eu faces a double crisis both economic and environmental which has brought into stark relief the question of whether climate change mitigation and economic growth are mutually exclusive is saving the environment a luxury reserved for wealthy countries with less affluent countries being too poor to be green we seek to address this important and timely question using fuzzy set qualitative comparative analysis fsqca to analyse the causal relationship between economic growth and stability and the expansion of renewable electricity shares among the european union s eu 28 member states during the recent economic recession 2008 2013 our paper analyses the recent economic and financial crisis and its effects on sustainability transitions and establishes a new indicator for progress in renewable electricity transitions in the context of europe s 2020 targets it therefore extends the sustainability as a luxury debate to include renewable energy the analysis reveals an ambivalent picture of the role of wealth in renewable energy transitions ret in europe indeed driven by the eu s common renewable energy targets the findings suggest that rets are promoted both because and in spite of the means

long run welfare effect of energy conservation regulation we investigate the long run effect of energy conservation regulation which forces firms to raise energy saving investment above the cost minimizing level if pigovian tax is imposed additional regulation always harms social welfare under perfect competition while it can improve welfare under imperfect competition our result under imperfect competition holds regardless of whether strategies are strategic substitutes or complements in contrast to direct entry regulation

tourism demand and economic growth in spain new insights based on the yield curve abstract this study examines for the first time the dynamic relationship between tourism growth and expected macroeconomic conditions of the destination country using a dcc garch model the focus is on the spanish economy in which monthly tourist arrivals data from 1998 to 2017 were collected for five key origin countries and around the world to capture expected macroeconomic conditions the spanish term structure of interest rates is used the results suggest that the tourism expected economic growth relationship is time varying without any country specific differences in the behaviour of the correlations importantly positive correlations reportedly coincides with a regime shift in the spanish economy whereas negative correlations are evident when expected economic conditions are stable it is also shown that the aforementioned relationship is influenced by key geopolitical and economic events the 9 11 terrorist attacks global financial crisis and the ecb s quantitative easing programme finally policy implications derived from the main findings are discussed

corporate unity in american trade policy a network analysis of corporate dyad political action this essay examines factors that produce political unity among large u s corporations advocating free trade expanding on old debates these data and analyses validate the importance of organizational and class cohesion approaches to corporate political action methodologically the political unity of pairs dyads of firms in trade policy activism is analyzed with quadratic assignment procedure regression shared membership in prominent policy networks and board interlocks positively predict corporate political unity across three areas of trade policy influence from the executive branch to the legislature non network organizational indicators also significantly predicted corporate trade policy activism the findings support business unity accounts of corporate political action and suggest that higher levels of firm embeddedness within intercorporate networks facilitate collective corporate political action

endogenous quality differentiation in congested markets firms selling a product with congestion externalities to a heterogeneous population of customers have an incentive to offer differentiated levels of quality in a price competitive market differentiation arises endogenously through the prices chosen by firms in equilibrium firms offer a range of prices which induce an efficiency improving range of quality levels and allow customers to self select their preferred price quality combinations additional results suggest that with many firms in the market the choice of prices dominates the choice of service capacities in determining congestion levels copyright 1991 by blackwell publishing ltd

tariffs versus quotas with strategic investment the relative efficiency of tariffs versus quotas is analyzed in a cournot oligopoly with strategic investment introducing quota licence fees to neutralize the international distributional effect when such licence fees remove quota rents from foreign firms then for the case of constrained entry with a sufficiently large number of firms quotas frequently hold a welfare advantage since tariffs relatively aggravate the inefficiency from overinvestment in the case of free entry and exit however tariffs hold a welfare advantage since there is greater benefit of increasing returns to scale to the economy by avoidance of excessive entry of firms

the epidemiology of corporate pac formation 1975 1984 abstract most work on corporate political action committees pacs accounts for their formation or activity level in terms of market concentration and collective action dilemmas subsidiary concerns include the effects of regulatory burden and the firm s internal organization however these cross sectional designs yield little insight into the dynamics of the process results of logit and event history analyses of panel data on 119 u s firms from 1975 1984 show that changes in corporate profitability pac formation by other firms in a firm s board of directors interlock network and the degree of managerial dominance of corporate governance also affect the likelihood that a firm will form a pac analyses also reveal important differences in pac formation dynamics across different types of firms particularly in their response to pac formation by linked firms

the conditional nature of embeddedness a study of borrowing by large u s firms 1973 1994 economic and organizational sociologists have increasingly demonstrated that the actions of individuals and firms are affected by the social networks within which they are embedded in recent years scholars have begun to recognize that the effects of these social networks may vary across populations or types of relations this article examines the extent to which the effects of interfirm networks on the behavior of firms are historically contingent focusing on the level of debt financing among approximately 140 large u s corporations over a 22 year period the authors show that the extent to which the firms use of debt was influenced by those with which they were tied through director interlocks declined over time the authors argue that this decline in the network effect reflected a shift in the institutional environment within which the firms operated and that it was driven by three processes the professionalization of the finance function within the firm the internalization of financial decision

regional institutional development political connections and entrepreneurial performance in china s transition economy while previous research emphasizes the role of political connections in facilitating entrepreneurial performance during china s early reform period 1978 1999 this study argues that regional institutions were increasingly conducive to entrepreneurial activities and thus also played a key role in china s entrepreneurial success during that period the purpose of this study is twofold first it aims to demonstrate how regional institutional development facilitated entrepreneurial performance in china second it aims to understand how formal institutional development among chinese regions affected the role of political connections using a two level hierarchical dataset on chinese private enterprises this study finds that not only legal protection of property rights but also the development of market systems mattered for entrepreneurial performance in addition it shows that political connections played a diminishing role during regional institutional development in china

defense against recession u s business mobilization 1950 19701 the unexpected investment decisions of companies during recessions often frustrate commentators and policy makers who view the economy from the top down companies may act against immediate market signals during recessions because of uncertainties about strategy and the future direction of the economy a mesolevel sociological model of how firms interpret and respond to economic conditions in uncertain times improves understanding of firms variable responses to recessions which cumulatively shape macroeconomic trajectories examining firm level employment during four recessions from 1950 to 1970 the author generates results from dynamic panel models to show that firms set their employment levels against profits and market share and in alignment with peers and political affiliations firms manage uncertainty by imitating peers but also by endeavoring to construct their environment collectively through business associations this article s counterintuitive economic findings and the evidence of social and

immigration and international inbound tourism empirical evidence from australia abstract immigration can potentially influence tourism flows however in spite of the vast number of studies on tourism demand modelling the immigration tourism linkage has not received much attention in the empirical literature this paper seeks to address this gap a dynamic demand model is developed and estimated using data from 1980 to 2008 for the 15 main markets of australia the explanatory variables included are income own price price of a substitute destination airfare and immigration the estimation results empirically establish the connection between immigration and inbound tourism the short run and long run immigration elasticities generated are 0 028 and 0 09 respectively additionally this paper demonstrates that omission of prices of substitutes affects the value of the own price elasticity of demand the results have implications for future research and for stakeholders who can improve the efficiency of their planning exercises by taking into account additional information on immigration trends

nonconstant reputation effect in a dynamic tourism demand model for spain abstract following the ideas of the tourism area life cycle talc theory we propose a dynamic econometric model for tourism demand where the reputation effect the effect of the lagged demand on the current tourism demand is not constant but dependent on congestion we test the model using panel data from spanish regions during the period 2000 2013 two estimations are performed depending on whether the tourists origin is domestic or international the results show that the reputation effect is not constant in both estimates supporting the idea that tourism congestion influences tourist arrivals in spain

tourism in the balearic islands a dynamic model for international demand using panel data abstract the balearic islands are one of the most important tourist destinations in the mediterranean sea the tourism sector dominates the economic activity of the islands the purpose of this study is to identify and measure the impact of the main determinants of the inbound international tourism flows the annual panel data set includes the number of arrivals from the 14 most important generating countries during the period 1991 2003 and a number of possible explanatory variables taking into account the changing structure of consumer preferences a dynamic model is estimated the estimated coefficient for the lagged dependent variable may be reflecting the importance of consumer loyalty to the destination as a determinant of tourism demand the results suggest that the demand is heavily dependent on the evolution of economic activity in each of the origin countries and on the relative cost of living of tourists in the destination this study also suggests that diversification of promotion and provision of high quality services are some recommended measures of tourism policy

recombinant property in east european capitalism recombinant property is a form of organizational hedging in which actors respond to uncertainty by deversifying assets redefining and recombining resources it is an attempt to hold resources that can be justified by more than one legitimating principle property tansformation in postsocialist hungary involves the decentralized reorganization of assets and the centralized management of liabilities together they blur the boundaries of public and private the boundaries of enterprises and the boundedness of justificatory principles enterprise level field research data on the ownership structure of hungary s 220 largest enterprises and banks and an examination of the government s recent debt consolidation programs suggest the emergence of a distinctively east european capitalism that will differ as much from west european capitalism as do contemporary east asian variants

the comparison between ad valorem and specific taxation under imperfect competition abstract this paper compares ad valorem and specific taxation in two models of oligopoly with and without free entry predominantly ad valorem taxation implies a relatively low consumer price high tax revenue and when entry is precluded low profits ad valorem taxation dominates specific taxation from the welfare perspective the set of circumstances under which with free entry specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare improving and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

a framework for dynamic oligopoly in concentrated industries in this article we introduce a new computationally tractable framework for ericson and pakes style dynamic oligopoly models that overcomes the computational complexity involved in computing markov perfect equilibrium mpe first we define a new equilibrium concept that we call moment based markov equilibrium mme in which firms keep track of their own state the detailed state of dominant firms and few moments of the distribution of fringe firms states second we provide guidelines to use mme in applied work and illustrate with an application how it can endogenize the market structure in a dynamic industry model even with hundreds of firms third we develop a series of results that provide support for using mme as an approximation we present numerical experiments showing that mme approximates mpe for important classes of models then we introduce novel unilateral deviation error bounds that can be used to test the accuracy of mme as an approximation in large scale settings overall our new framework opens the door to study new issues in industry dynamics

conditional choice probability estimation of dynamic discrete choice models with unobserved heterogeneity we adapt the expectation maximization algorithm to incorporate unobserved heterogeneity into conditional choice probability ccp estimators of dynamic discrete choice problems the unobserved heterogeneity can be time invariant or follow a markov chain by developing a class of problems where the difference in future value terms depends on a few conditional choice probabilities we extend the class of dynamic optimization problems where ccp estimators provide a computationally cheap alternative to full solution methods monte carlo results confirm that our algorithms perform quite well both in terms of computational time and in the precision of the parameter estimates

energy consumption as a condition for per capita carbon dioxide emission growth the results of a qualitative comparative analysis in the european union abstract the problematic of climatic changes and the respective consequences raises the need to discuss the problem and define measures to control and or reverse them because one of the causes of climatic changes is the emission of greenhouse gases the european union defined the reduction of emissions as a main concern as well as increasing efficiency in the energy sector with the objective of analysing the main conditions affecting the growth of per capita emissions this paper uses a fuzzy set qualitative comparative analysis fsqca based on a sample of data from 2010 to 2014 the conditions evaluated were i gdp growth ii change in the share of gdp relating to private consumption iii change in the share of gdp relating to public consumption iv change in the share of gdp on investment v and energy consumption growth the main drivers contributing to reduced emissions were the crisis and energy consumption evaluation of the main factors affecting emissions growth is the main contribution of this study considering that economic growth is an obvious goal the european union must design measures encouraging investment in more efficient and less pollutant technologies which is also in accordance with oecd sustainability goals

demand fluctuations in the ready mix concrete industry i investigate the role of demand shocks in the ready mix concrete industry using census data on more than 15 000 plants i estimate a model of investment and entry in oligopolistic markets these estimates are used to simulate the effect of eliminating short term local demand changes a policy of smoothing the volatility of demand has a market expansion effect the model predicts a 39 increase in the number of plants in the industry since bigger markets have both more plants and larger plants a demand smoothing fiscal policy would increase the share of large plants by 20 finally the policy of smoothing demand reduces entry and exit by 25 but has no effect on the rate at which firms change their size

welfare losses under cournot competition abstract in a market for a homogeneous good where firms are identical compete in quantities and produce with constant returns the percentage of welfare losses pwl is small with as few as five competitors for a class of demand functions which includes linear and isoelastic cases we study markets with positive fixed costs and asymmetric firms we provide exact formulae of pwl and robust constructions of markets were pwl is close to one in these two cases we show that the market structure that maximizes pwl is either monopoly or dominant firm depending on demand finally we prove that pwl is minimized when all firms are identical a clear indication that the assumption of identical firms biases the estimation of pwl downwards

sectoral shocks learning and aggregate fluctuations we present a model in which sectoral shocks have aggregate consequences the model relies on irreversible investment and imperfect information to slow the adjustment of expanding industries we show that this gradual expansion is sub optimal

academic tourism demand in galicia spain the last few decades have witnessed a dramatic increase in the mobility of higher education students when fulfilling certain conditions this type of mobility can actually be considered a type of tourist activity this paper justifies the choice of the term academic tourism to describe such a form of tourism further to this its primary purpose is to identify the main determinants that drive the demand of academic tourism in galicia an empirical analysis has been carried out using a dynamic panel data model by a generalized method of moments gmm contrary to what can be observed in other types of tourism the results suggest that academic tourism depends mainly on determinants that are not strictly economic namely the relevance of the habits and preferences of students the potential for differential attractiveness of the university of santiago de compostela and the significant impact of the erasmus programme in light of these results policy implications are then discussed

the impact of commissions on home sales in greater boston buying or selling a residential property is one of the most important financial decisions for a large majority of households in the united states in 2007 68 percent of households owned their own home more than a third of national wealth was held in residential real estate and there were 6 4 million sales of existing homes according to estimates from the department of housing and urban development surveys indicate that an overwhelming majority of homes are sold with the aid of a licensed real estate agent or broker according to a report issued in 1983 in the wake of the federal trade commission s investigation of the real estate brokerage industry brokers accounted for the sale of 81 percent of single family homes the national association of realtors nar the largest professional organization of real estate agents in the united states that represents more than half of all licensed agents estimates that nationally almost 80 percent of residential real estate transactions involve a realtor for owners selling their homes this way real estate agents usually bear a large fraction of the costs of marketing a home advertising the home conducting open houses taking potential buyers on visits to the home and negotiating offers households interested in buying a home often solicit the help of an agent to make appointments to visit properties and arrange financing in exchange for their efforts agents are usually compensated with a fixed percentage commission of the sales price split between the buyer s agent and the seller s agent national association of realtors 2007 chang tai hsieh and enrico moretti 2003 if the agents are working for

demand for differentiated durable products the case of the u s computer printer market i introduction this paper aims to provide a theoretical and empirical description of consumer behavior in a dynamic market for differentiated durable goods the computer hardware industry serves as an example of the type of market we consider markets for computer systems and components as well as for many other high technology products exhibit some striking similarities that are of particular concern for an empirical economist as follows products are differentiated in multiple dimensions in addition to price products are durable yielding consumption services over multiple periods product quality rapidly improves over time empirical work on estimating differentiated product demand systems has been dominated by static discrete choice models with random utility see berry levinsohn and pakes 1995 goldberg 1995 and nevo 2001 among others however markets for durable goods exhibit several features at odds with their assumption of myopic consumer behavior first traditional static discrete choice models implicitly assume that consumers participate in the market every period choosing one of the available products or an outside option thus the fraction of consumers who do not buy any product in a given period could only be explained by the high value they assign to the outside alternative for durable goods however purchases are made infrequently and result in a consumer s exiting the market for a significant period of time hence the model needs to account for consumers outflow from the market arising from their purchase decisions second a static framework may give a misleading picture of the aggregate sales time pattern in a dynamic industry in many markets for durable products it is not uncommon to see rapidly improving product quality and falling prices given any reasonable set of consumer preferences over the product characteristics space static discrete choice models for such an industry will tend to predict an upward trend in aggregate sales this fails to account for a variety of patterns commonly seen in the data third the evolution of product quality leads to the possibility of intertemporal demand substitution by forgoing a current purchase the consumer retains the option to buy a potentially better product in the future hence the decision of when to buy may be just as important for consumers as the decision of what to buy this trade off cannot be accounted for in the static framework the purpose of this paper is to remedy these shortcomings of static discrete choice models in durable goods markets with particular attention paid to technological change and the dynamics of new products adoption the paper presents a dynamic model of consumer demand for differentiated durable products that explicitly accounts for consumers expectations of future product quality and consumers outflow from the market that arises endogenously from their purchase decisions in this model the consumer faces a sequence of static discrete choice problems over a non stationary choice set we show that for a subclass of random utility models which include the multinomial logit and the mcfadden 1978 generalized extreme value gev model there exists a scalar valued sufficient statistic that determines the value of the option to postpone the purchase this allows us to model industry evolution over a vastly reduced state space and to formalize the consumer s decision of when to buy as an optimal stopping problem a solution to that problem defines the hazard rate of product adoptions while the nested discrete choice model determines the alternative specific purchase probabilities integrating individual decisions over the population distribution generates rich dynamics of aggregate and product level sales the paper proceeds to present monte carlo evidence that ignoring the time dimension of consumer choice will induce a downward bias in the estimates of consumer preferences over quality sometimes reversing the sign of the coefficients

conflicts between principals and agents evidence from residential brokerage abstract when a homeowner uses an agent to sell his property he may have less information than his agent and be disadvantaged in price setting and negotiating this study examines whether the percentage commission structure in real estate brokerage creates agency problems we investigate whether agents are able to use their information advantage to either sell their own property faster or for a higher price than their clients properties the empirical results confirm our theoretical predictions of agency problems as we find that agent owned houses sell no faster than client owned houses but they do sell at a price premium of approximately 4 5

testing cost inefficiency under free entry in the real estate brokerage industry this article provides an empirical framework for studying entry and cost inefficiency in the real estate brokerage industry we present a structural entry model that exploits individual level data on entry and earnings to estimate potential real estate agents revenues and reservation wages thereby recovering costs of providing brokerage service using u s census data we estimate the model and find strong evidence for cost inefficiency under free entry attributable in particular to wasteful nonprice competition we further use the estimated model to evaluate welfare implications of the rebate bans that currently persist in some u s states supplemental materials are provided online

estimating the demand for the characteristics of housing a hstract estimates of the demand for the characteristics contained in a differentiated product such as housing can be based on hedonic regressions however previous studies have not dealt with several potential problems in such estimation a more appropriate framework for the estimation is provided in this paper also data from a number of cities are used to eliminate the identification problem and the endogeneity of the marginal prices derived from non linear hedonic equations is considered in the estimation the results on own and cross price elasticities expenditure elasticities and the effects of socio economic vafiables accord well with expectations

pacs and the congressional supermarket the currency is complex although pacs attempt to influence the legislative process with contributions this research finds little evidence that the contributions of 120 pacs affiliated with 10 organizations affected the voting patterns of the house members who served continuously from 1975 to 1982 in the few cases in which a relationship between contributions and a member s votes is established the analysis indicates that contributions are a surrogate measure of a more important and larger package of support for the member from the interest groups two stage least squares regression models are used to test the relationship between pac contributions and a member s votes controlling for the incumbent s ideology and party and the political leaning of the district interviews with pac officials supplement the statistical analysis

social times of network spaces network sequences and foreign investment in hungary to model from its inception interenterprise network formation and its interaction with foreign investment across an entire epoch of rapid and profound economic transformation the authors gathered data on the complete ownership histories of 1 696 of the largest hungarian enterprises from 1987 to 2001 they develop a social sequence analysis to identify distinctive pathways whereby firms use network resources to buffer uncertainty hide or restructure assets or gain knowledge and legitimacy during this period networked property grew stabilized and involved a growing proportion of foreign capital cohesive networks of recombinant property were robust and in fact integrated foreign investment although multinationals through their subsidiaries dissolved ties in joint venture arrangements the authors find evidence that they also built durable networks these findings suggest that developing economies do not necessarily face a forced choice between networks of global reach and those of local embedde

excess entry vertical integration and welfare this article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry we give sufficient conditions on consumer preferences that lead to pareto improving vertical integration and demonstrate a close relationship between assumptions on preference for variety excess entry in monopolistically competitive markets and the welfare effects of vertical integration excess entry in downstream markets tends to give rise to pareto improving vertical integration we extend the analysis to vertical oligopoly and access price regulation

inbound international tourism to canary islands a dynamic panel data model abstract this paper presents a dynamic model of international tourism demand to canary islands the empirical analysis exploits the panel structure of the dataset for the 15 most important countries of origin of tourists over the period 1992 2002 by a generalized method of moments estimation of a dynamic model taking into account unobserved country specific effects the preferred model is the gmm diff proposed by arellano and bond however other models are also shown for comparison a dynamic model where the lagged dependent variable is included as regressor is used to obtain short run and long run elasticities problems arising from the non stationarity of data are dealt with by using a model in first differences the estimated coefficient for the lagged depended variable is always significant and may reflect a high degree of consumer loyalty or an important effect of word of mouth in determining demand of international tourism in brief the results suggests that tourism demand to canary islands must be considered as a luxury good and is highly dependent on the evolution of relative prices and cost of travel between origin and destination country

an empirical model of firm entry with endogenous product type choices i describe a model of entry with endogenous product type choices these choices are formalized as the outcomes of a game of incomplete information in which rivals differentiated products have nonuniform competitive effects on profits i estimate the model for location choices in the video retail industry using a nested fixed point algorithm solution the results imply significant returns to product differentiation simulations illustrate the tradeoff between demand and intensified competition and the extent to which markets with more scope for differentiation support greater entry

the flexible few oligarchs and wealth defense in developing democracies based on an original large n dataset of individual ukrainian oligarchs and qualitative evidence this article tests competing perspectives on the political power of big capital we find surprising

the economics of casino taxation in this article a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos the situation being considered is in a country where casinos cater exclusively to foreign tourists the goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation when the price of gambling is set by regulation above its competitive level the economic losses created by excessive investment in the sector can be reduced by taxation a turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country due to administrative constraints a number of countries rely on the taxation of the casinos fixed assets or a combination of a turnover tax and a tax on fixed costs the model is applied to the situation in north cyprus the annual economic efficiency loss from its poorly designed tax policies on casino gambling is

producer opportunism in retailing contracts this paper analyzes the role of ex post producer opportunism on the optimal design of vertical restraints it considers vertical contracts as starting points of ex post renegotiation it shows that the alleged room for franchisor opportunism that seems quite important in franchising contracts can be seen as an insurance device when part of the goal of the contract is to provide a stable payoff to the franchisee this conclusion holds for various opportunistic strategies direct eviction of initial retailers excessive entry of new retailers on the market or resale price maintenance used to encourage voluntary exit of initial retailers

endogenous timing with infinitely many firms abstract a model with constant marginal costs is considered where firms choose first a period for production and then the amount to produce when competing in the market according to the resulting timing decisions multiple equilibria arise allowing for infinitely many industry output configurations encompassing one limit output dominant firm and the cournot equilibrium with free entry as extreme cases at each of these equilibria a firm produces a positive amount only if this firm commits to produce at period one both stackelberg and cournot like outcomes are sustainable as equilibria however when the number of leaders is given production at subsequent periods is always prevented and industry output is sometimes larger than the entry preventing level

dynamic product positioning in differentiated product markets the effect of fees for musical performance rights on the commercial radio industry this article predicts how radio station formats would change if as was recently proposed music stations were made to pay fees for musical performance rights it does so by estimating and solving using parametric approximations to firms value functions a dynamic model that captures important features of the industry such as vertical and horizontal product differentiation demographic variation in programming tastes and multi station ownership the estimated model predicts that high fees would cause the number of music stations to fall significantly and quite quickly for example a fee equal to 10 of revenues would cause a 4 6 drop in the number of music stations within 2 1 2 years and a 9 4 drop in the long run the size of the change is limited however by the fact that many listeners particularly in demographics that are valued by advertisers have strong preferences for music programming publication abstract

qualitative and mixed methods research in economics surprising growth promising future qualitative research in economics has traditionally been unimportant compared to quantitative work yet there has been a small explosion in use of quantitative approaches in the past 10 15 years including mixed methods projects which use qualitative and quantitative methods in combination this paper surveys the growing use of qualitative methods in economics and closely related fields aiming to provide economists with a useful roadmap through major sets of qualitative methods and how and why they are used we review the growing body of economic research using qualitative approaches emphasizing the gains from using qualitative or mixed methods over traditional closed ended approaches it is argued that although qualitative methods are often portrayed as less reliable less accurate less powerful and or less credible than quantitative methods in fact the two sets of methods have their own strengths and how much can be learned from one type of method or the other depends on specific issues that arise in studying the topic of interest the central message of the paper is that well done qualitative work can provide scientifically valuable and intellectually helpful ways of adding to the stock of economic knowledge especially when applied to research questions for which they are well suited

do real estate brokers add value when listing services are unbundled i introduction real estate brokers typically provide sellers with bundles of services most of which are ostensibly aimed at improving the terms at which homes are sold and helping homeowners find buyers more quickly 1 traditionally access to the multiple listing service mls a pooled database of homes for sale that is owned and operated by an association of local real estate brokers has been an important component of that bundle other components of the traditional brokerage bundle that potentially affect the terms and timing of a sale include market information and recommendations pertaining to the appropriate asking price 2 promotional services preparing a home for sale circulating flyers placing advertisements holding open houses and recommending the home to individual buyers the screening of prospective buyers the facilitation and acceleration of matches between buyers and sellers 3 and assistance with negotiations 4 the object of this paper is to measure the effects of real estate brokerage services provided to sellers other than mls listings on the terms and timing of home sales it is not obvious that sellers benefit from those services on the one hand brokers offer potentially useful knowledge and expertise on the other hand because the relationship between the homeowner and the broker resembles a classical principal agent problem the broker may not deploy services in ways that promote the seller s interests while appropriately structured compensation schemes may alleviate the principal agent problem to some degree see e g the recent survey by miceli pancak and sirmans 2007 significant conflicts remain as levitt and syverson 2008 emphasize an agent has strong incentives to sell the house quickly even at a substantially lower price their empirical analysis shows that homes owned by agents sell for nearly 4 more and stay on the market roughly 9 days longer than other comparable houses similarly rutherford springer and yavas 2005 find that real estate agents receive a premium of 3 0 7 0 when selling their own condominiums in comparison to similar client owned condominiums by waiting longer to sell 5 while those studies shed light on the magnitude of agency costs i e the extent to which the deployment of brokerage services departs from the first best they do not tell us how those costs compare to the benefits flowing from a broker s knowledge and expertise consequently they do not answer the question posed at the outset of this paragraph the importance of the question addressed in this paper is most readily apparent within the context of the recent policy debate over service bundling in real estate brokerage as long as valuable mls listings are bundled with brokerage services homeowners may use brokers even if the agency costs exceed the benefits of brokers knowledge and expertise in that case unbundling would benefit homeowners and promote efficiency in practice a small but growing number of brokers now offer to place clients homes in the mls for a fixed fee 6 yet in many jurisdictions established brokers have resisted pressures to unbundle mls listings from other services in some cases they have pressed for minimum service laws that prevent agents from offering mls only options as of 2007 eight states had such laws in place 7 some states have also adopted licensing requirements that impede the entry of non traditional real estate brokers where such laws are not in force some mlss have adopted their own rules and procedures to prevent or at least discourage unbundling 8 though the internet increasingly provides alternatives to mls databases at least in some jurisdictions the u s federal trade commission observed as recently as november 2009 that t he mls is generally acknowledged to be a superior platform for matching home buyers and sellers 9 thus the practice of bundling mls listings with other real estate brokerage services handicaps homeowners who wish to sell their homes either completely independently for sale by owner or fsbo transactions or without the ancillary services of a listing broker

what is the energy policy planning network and who dominates it a network and qca analysis of leading energy firms and organizations this study examines the structure of the energy industry and the energy policy planning network eppn i use cross sectional director interlocks from 2002 to examine the social networks amongst a sample of the largest energy firms between these firms and the eppn and to calculate relative network centrality measures for the firms i then use qualitative comparative analysis qca to isolate specific combinations of energy firm attributes that are associated with network position i find that the energy industry has several key intra firm interlocks that link dominant companies to each other and that the industry is well represented on the boards of eppn organizations additionally several dominant energy firms provide links between ultra conservative and moderate policy development organizations finally qca models suggest that firms with many employees high revenue and who produce oil are most likely to hold prominent positions in the eppn though above average political campaign contributions offer an alternative path into the network

regulation competition and liberalization in many countries throughout the world regulators are struggling to determine whether and how to introduce competition into regulated industries this essay examines the complexities involved in the liberalization process while stressing the importance of case specific analyses this essay distinguishes liberalization policies that generally are procompetitive from corresponding anticompetitive liberalization policies

welfare optimal patent royalties when imitation is costly we identify welfare optimal patent royalties in a model of costly imitation entry and imperfect competition when the social planner may impose a compulsory license optimal royalties either blockade imitation facilitating unregulated monopoly or yield an aggregate zero profit efficient duopoly when duopoly is optimal the optimal per unit royalty pins the equilibrium price at the aggregate average cost and the optimal fixed royalty shifts surplus so the patentee and imitator break even efficient duopoly yields higher welfare than monopoly for sufficiently low invention cost and may also yield higher welfare than a prize system interestingly royalty payments may be negative because of this efficient duopoly may not be feasible if the planner must instead direct the courts to use such royalties

the short term price effect of a tourist tax through a dynamic demand model the case of the balearic islands abstract tourist taxes have become an important source of revenue for many tourist destinations taxes on accommodation are upheld by their proponents as a way of shifting the local tax burden on to non residents while the travel industry claims that these levies do significant damage to their level of competitiveness the objective of this paper is to identify the market s sensitivity to price changes in travel related services or groups of services assuming that one of the main factors that influences travel decisions is the information on the destination that consumers receive in order to include this effect the study applies a combination of a diffusion model and a traditional economic utility theory model to tourists visiting the balearic islands spain from the united kingdom germany france and the netherlands

detection and impact of industrial subsidies the case of world shipbuilding this paper provides a model based empirical strategy to i detect the presence and gauge the magnitude of government subsidies and ii quantify their impact on production reallocation across countries industry prices costs and consumer surplus i construct and estimate an industry model that allows for dynamic agents in both demand and supply and apply my strategy to world shipbuilding a classic target of industrial policy i nd strong evidence consistent with china having intervened and reducing shipyard costs by 15 20 corresponding to 5 billion us dollars between 2006 and 2012 the subsidies led to substantial reallocation of ship production across the world with japan in particular losing signi cant market share they also misaligned costs and production while leading to minor surplus gains for shippers

an almost ideal demand system for housing attributes in recent articles mendelsohn 16 and palmquist 20 use restricted versions of rosen s 22 model of household behavior to consistently estimate demand functions for attributes of a differentiated product rosen s 22 model is of a single market for such a product and he proposes a two step technique to estimate attribute demand functions first a single hedonic price function is estimated for the differentiated product attribute prices are the first derivatives of the fitted hedonic price function with respect to the relevant attributes second demand functions for attributes are estimated using the prices imputed in the first step if the hedonic price function estimated in the first step is linear then there is no price variation for attributes and demand functions cannot be estimated if the hedonic price function is nonlinear then there is price variation but it is endogenous to households since in a single market price and attribute quantity are chosen jointly 2 indeed within market price variation will always be endogenous in either case without sufficient restriction on the model the parameters of the demand functions for attributes cannot be consistently estimated using rosen s 22 method 3 mendelsohn 16 and palmquist 20 assume that there are many markets for the differentiated product and that households with like preferences may be observed in the different markets by this restriction households face price variation across markets that is exogenous whether hedonic price functions are linear or nonlinear if so demand functions can be consistently estimated 4

the costs of free entry an empirical study of real estate agents in greater boston this paper studies the consequences of xed commissions and low entry barriers in greater boston s real estate brokerage industry from 1998 2007 a period with substantial agent turnover we nd that entry is not associated with increased sales probabilities or reduced sales time instead it decreases the market share of experienced agents and reduces average service quality we develop a dynamic empirical model motivated by these patterns to study the extent of ineciency in the current system compared to alternatives to accommodate a large state space we approximate the value function using sieves and impose the bellman equation as an equilibrium constraint if commissions are cut in half there would be 40 fewer agents implying social savings of 23 of industry revenue and the average agent would facilitate 73 more transactions house price appreciation of 50 during our sample period accounts for a 24 increase in the number of agents and a 31 decline in average agent productivity finally improving information about past agent performance can increase productivity and generate signicant social savings

equilibrium product bundling this article offers an equilibrium theory of product bundling by rival firms in several models where a primary good is produced in a duopoly market and one or more other goods is produced under perfectly competitive conditions bundling is shown to emerge as an equilibrium strategy of one or both of the duopolists for its role as a product differentiation device when the rival firms can commit to bundling sales their profits are higher but social welfare is reduced copyright 1997 by university of chicago press

social efficiency of entry in a vertically related industry we provide a new perspective to the literature on social desirability of entry by showing that if the input supplier has market power social desirability of entry of the final goods producers depends on returns to scale entry in the final goods market can be socially insufficient under constant returns to scale technology but it can be socially excessive under decreasing returns to scale technologies if the cost of entry is low so that the final goods market is sufficiently competitive hence the anti competitive entry regulation policies are more justifiable if the final goods market is characterised by decreasing returns to scale technologies

market r d allocations when research paths are product specific a compared to the social optimum individual firms undertook too little rd b too many firms entered the competition to undertake rd2 c if the elasticity of demand were sufficiently low aggregate rd

the relative performance of real estate marketing platforms mls versus fsbomadison com we compare house sales on a for sale by owner fsbo platform to multiple listing service mls sales and find that fsbo precommission prices are no lower but that fsbo is less effective in terms of time to sell and probability of a sale we do not find direct evidence of the importance of network size as a reason for the lower effectiveness of fsbo we do find evidence of endogenous platform differentiation patient sellers use fsbo while patient buyers transact more often on the mls where they avoid patient sellers we discuss the implications for platform competition two sided markets and welfare

the length of stay in the demand for tourism abstract one of the main characteristics of current tourism is the reduction in the length of stay at a destination nevertheless this variable has received little attention in literature this paper examines the microeconomic determinants of the length of stay at one of the mediterranean s leading sun and sand destinations the estimation of a conditional demand function model highlights the explanatory power of the tourist s sociodemographic profile and of holiday characteristics as well as the sensitivity of the length of stay to price changes

price fixing policy abstract the prohibition against price fixing is competition law s most important and least controversial provision yet there is far less consensus than meets the eye on what constitutes price fixing and prevalent understandings cannot be reconciled with principles of oligopoly theory this article 1 presents a fundamental reconceptualization of our understanding of horizontal agreements 2 develops a systematic analysis of price fixing policy that focuses on its deterrence benefits and chilling costs and 3 compares this direct approach to commentators favored formulations that typically involve some sort of formalistic communications based prohibition by targeting a subset of means rather than the illicit ends conventional formulations tend to impose liability in cases with lower deterrence benefits and greater chilling costs than those reached under a direct approach and to incur greater administrative costs as well

valuing housing characteristics a case study of single family houses in edmonton alberta specified characteristic of the houses in question pi i l n is az interpreted as the marginal implicit value of each specified characteristic and e is a random error term in the analysis reported here it is assumed that within the relatively shortterm period analyzed buyers demand for housing attributes is stable and the supply of the range of single family housing and associated attributes is fixed thus abstracting from the potential problem of identification that may affect estimation of the demand for attributes rosen 1974 epple 1987 2 a random sample of 60 single family homes which had sold in edmonton alberta in march 1993 was drawn from the edmonton real estate board s

improving the numerical performance of static and dynamic aggregate discrete choice random coefficients demand estimation the widely used estimator of berry levinsohn and pakes 1995 p roduces estimates of consumer preferences from a discrete choice demand model with random coefficients market level demand shocks and endogenous prices we derive numerical theory results characterizing the properties of the nested fixed point algorithm used to evaluate the objective function of blp s estimator we discuss problems with typical implementations including cases that can lead to incorrect parameter estimates as a solution we recast estimation as a mathematical program with equilibrium constraints which can be faster and which avoids the numerical issues associated with nested inner loops the advantages are even more pronounced for forward looking demand models where the bellman equation must also be solved repeatedly several monte carlo and real data experiments support our numerical concerns about the nested fixed point approach and the advantages of constrained optimization for static blp the constrained optimization approach can be as much as ten to forty times faster for large dimensional problems with many markets

competition and regulation in vertically related markets in an industry where naturally monopolistic and competitive activities are vertically related should the natural monopolist be allowed also to operate in the deregulated competitive sector unlike much of the literature on vertical integration this paper assumes that monopoly pricing behaviour is regulated and therefore the effect of vertical integration on the task of regulation is central to the analysis in the model there is both imperfect information and imperfect competition when vertical integration by the monopolist is allowed the regulator s task is made harder insofar as the monopolist has anticompetitive incentives to raise rivals costs on the other hand integration may lead to there being fewer firms in the deregulated sector and hence less duplication of fixed costs the overall welfare comparison between separation and integration is ambiguous as two simple examples illustrate various extensions to the analysis are also considered one of the central questions in debates on regulatory reform is how to organize industries that contain both naturally monopolistic and potentially competitive activities electricity transmission and distribution are characterized by natural monopoly cost conditions but electricity generation is not in the gas industry pipeline services may be naturally monopolistic but supply to larger customers is not in telecommunications natural monopoly is more a feature of local network operations than of long distance operations and is not present in apparatus manufacture and supply or in the provision of value added services in railways while the infrastructure of track and stations is naturally monopolistic the supply of train services might not be policy developments notably those associated with privatization in britain and deregulation in the united states have sometimes led to radical structural reform in these industries at t for decades a vertically integrated monopolist was required under the 1982 settlement of its long running antitrust case against the u s government to divest itself of its local network operations the central electricity generating board cegb in england and wales was restructured both vertically transmission grid activities were separated from generation and horizontally before privatization in 1990 1991 by contrast british telecom was privatized as a vertically integrated dominant firm bt now faces competition from mercury and others especially in the long distance market but its dominance of local network operations might affect competition there and in other areas such as apparatus supply the local network monopoly would of course have to be regulated in any event but its link via ownership to vertically related and potentially competitive activities poses additional regulatory questions many of the efforts of the regulatory body oftel notably in relation to interconnection between bt s and rivals 1 for a general account of the theory and british experience of regulatory reform in the utility industries

the intergovernmental network of world trade igo connectedness governance and embeddedness membership in certain intergovernmental organizations igos such as the world trade organization has long been argued to stimulate trade yet evidence linking igos to trade is mixed the authors argue that identifying the influence of igos requires attention not only to the institutions igos enact but also to the network through which they enact them this approach allows them to demonstrate that trade between two countries increases by an average of 58 with every doubling of the strength of igo connection between the countries they also contribute to debates regarding the mechanisms through which structural relationships influence economic behavior by showing that substantial trade benefits occur not only through economic igos but also through igos that were formed for social and cultural purposes and that connections through igos that are organizationally strong have more impact than those through minimalist igos

interlocks pacs and corporate conservatism two alternative corporate political strategies are identified for political action committee pac contributions to candidates in the 1980 congressional elections 1 a pragmatic effort to promote a particular company s best interests and 2 an ideological effort to promote conservatism with the use of multiple regression this article examines three theoretical explanations of corporate political strategies the expectations of corporate liberal theory are not confirmed rather there is support for both state structure and interlock theories it is argued that at least in 1980 business political behavior was ideologically conservative which business understood to represent classwide rational interests

a tale of two market failures technology and environmental policy abstract market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies these combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives and can be cost effectively harnessed through the use of economic incentive based policy in the presence of weak or nonexistent environmental policies investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable positive knowledge and adoption spillovers and information problems can further weaken innovation incentives while environmental technology policy is fraught with difficulties a long term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success

dynamic competition and intellectual property rights in a model of product development we study innovation timing and socially optimal intellectual property rights iprs when firms facing market uncertainty invest strategically in product development if demand growth and volatility are high attrition occurs and iprs should ensure the cost of imitation attains a lower bound we identify if demand growth and volatility are low then provided that the private imitation incentive is socially excessive iprs should set the cost of imitation high enough to induce preemption and possibly winner take all preemption moreover the welfare achieved with optimal iprs is then greater with endogenous innovation than if firm roles are predetermined illustrating the importance of fostering dynamic competition in extensions we show how firms benefit from open standards takeovers have ambiguous welfare effects and simple licensing schemes are welfare improving

market structure and casino taxation in tourist resorts this article examines the association of tax effects with market structure for casino gaming we show that if market structure is uncompetitive much of casino taxation falls on tourists whose demand is inelastic relative to supply the tax is likely to be efficient under strong external demand if imposed on oligopoly casinos with a monopoly location in a cross border market the likelihood of economically good taxation is greater under oligopoly than under competition but lower than under monopoly casino taxes should be lowered in a more competitive market with weaker external demand our prediction is consistent with the evidence found from casino tourism development in macao with high gambling taxes

the two faces of capital corporations and individual capitalists as political actors widespread access to public records of campaign contributions by corporate political action committees pacs have made these the preferred data for analyzing political partisanship within the capitalist class by comparison data on political contributions by individual capitalists were until recently difficult to obtain and rarely subjected to systematic study important differences are demonstrated between these two forms of capitalist political action by directly comparing the campaign contributions of 592 individual capitalists with the contributions of the 394 major corporations with which those capitalists were associated campaign contributions by individual capitalists follow a logic different from that of corporate pacs corporations are generally more interested in buying influence with incumbents while individual capitalists are more concerned with bolstering the election prospects offavored candidates by providing a more direct measure of capitalists political preferences the analysis of campaign contributions by individual capitalists clarifies theoretical questions that remain unresolved in the research based on corporate pacs variables that elude measurement when corporations are the units of analysis e g ethnicity are shown to have important consequences for capitalist political partisanship

keiretsu governance and learning case studies in change from the japanese automotive industry thekeiretsu structuring of assembler supplier relations historically enabled japanese auto assemblers to remain lean and flexible while enjoying a level of control over supply akin to that of vertical integration yet currently there is much talk of breakdowns inkeiretsu networks this paper examines some recent developments in japanese parts supplykeiretsu we argue thatkeiretsu relationships are drifting from hybrid or network i e keiretsu governance modes toward the extremes of arms length contracting and top down administration these changes are best understood through a combination of transaction cost and learning perspectives on alliance consistent with transaction cost economics the shift in purchase supply relationships can be traced to changes in the nature of parts transactions andkeiretsu governance structures a learning perspective on alliance complements and extends transaction cost theory providing additional explanation of the sources of change and the specific governance choices being made our first two cases document a drift in toyota skeiretsu supply network toward a hierarchical form in the management of parts supply transactions toyota has effectively internalized its transactions with daihatsu by taking a controlling interest toyota s strategy toward long term partner denso on the other hand was very different toyota built from the ground up an in house capability in electronic components thus scaling down its dependence on denso a third case considers a general trend in the japanese auto industry toward greater standardization of parts with the routinization of quality reliability and speed in supply management the need forkeiretsu style governance has declined the withering ofkeiretsu obligations is also traceable to globalization and the continuing weakness of the japanese economy which have prompted japanese firms to question received business practice

an empirical study of outbound tourism demand in the uk a general to specific methodology is used to construct uk demand for outbound tourism models to twelve destinations a tourism destination preference index is introduced to take into account social cultural and psychological influences on tourists decisions concerning their overseas holiday destinations the tests support the existence of a cointegration relationship for each of 11 uk overseas holiday destinations the corresponding error correction models are estimated the empirical results show that the long run income elasticities for all destinations range from 1 70 to 3 90 with an average of 2 367 the lowest and highest short run income elasticities are 1 05 and 3 78 respectively with an average of 2 216 the estimates of the income elasticities imply that overseas holidays are highly income elastic while the own price elasticities suggest that the demand for uk outbound tourism is relatively own price inelastic in terms of the significance of substitution prices in the regression equations ir

taxing tourism and subsidizing non tourism a welfare enhancing solution to dutch disease abstract using a combined analysis of a general equilibrium and a partial equilibrium this study models the impacts of a combined policy tool based on taxing tourism and subsidizing non tourism in a tourism dependent destination the results suggest that such a policy tool while widely discussed in economics literature may not be suitable for a tourism destination as it might have adverse effects on local welfare