the demand for housing in sweden equilibrium choice of tenure and type of dwelling abstract most studies of housing demand and tenure choice only identify two modes of tenure owner occupied one family houses and rental apartments furthermore they are typically based on a cross section across all households in this study we use recent swedish data to overcome these weaknesses we identify owner occupied apartments coop shares as a third mode of tenure and show that this should be treated separately we also use information about the household s own assessment of its probability of moving during the next year we demonstrate that it makes a large difference if likely movers are eliminated from the sample

two stage equilibrium and product choice with elastic demand abstract this paper examines a two stage model of product choice with elastic demand duopolists choose locations and then prices consumers demand is linear in price transportation cost is quadratic and is a lump sum for each pair of locations there is a price equilibrium in the second stage the first stage equilibrium locations are unique symmetric and depend upon the ratio of the reservation price and the transportation cost parameter when this ratio exceeds a certain critical value the locations are at the extreme end points of the market as the ratio decreases the locations gradually move towards the center

elasticity of demand and behaviour based price discrimination behaviour based price discrimination bbpd is typically analysed in a framework characterised by perfectly inelastic demand this paper provides a first assessment of the role of demand elasticity on the profit consumer and welfare effects of bbpd we show that the demand expansion effect that is obviously overlooked by the standard framework with unit demand plays a relevant role in comparison to uniform pricing we show that firms are worse off under bbpd however as demand elasticity increases the negative impact of bbpd on profits gets smaller despite a possible slight increase in the average prices charged over the two periods in comparison to uniform pricing we show that bbpd boosts consumer surplus and that this benefit is independent of elasticity in contrast to the welfare results derived under the unit demand assumption where bbpd is always bad for welfare the paper shows that bbpd can be welfare enhancing if demand elasticity is sufficiently high

energy efficiency programs in the context of increasing block tariffs the case of residential electricity in mexico increasing block pricing schemes represent difficulties for applied researchers who try to recover demand parameters in particular price and income elasticities the mexican residential electricity tariff structure is amongst the most intricate around the globe in this paper we estimate the residential electricity demand and use the corresponding structural parameter estimates to simulate an energy efficiency improvement scenario as suggested by the energy transition law of december 2015 the simulated program consists of a massive replacement of electric appliances air conditioners fans refrigerators washing machines and light bulbs for more energy efficient units the main empirical findings are the following overall residential electricity consumption decreases 8 9 and the associated expenditure falls 11 1 additionally the electricity subsidy decreases 360 million of usd per year and there is an annual cut in co2 emissions of 3 5 million of tons

estimating local welfare generated by an nfl team under credible threat of relocation this study offers the opportunity to examine the welfare contribution of the minnesota vikings to minnesota households in the context of a credible threat of team relocation we find the credibility of the threat of relocation is essential to providing unbiased estimates of welfare this study utilizes contingent valuation methodology cvm and a random utility model rum to analyze minnesotans decision making mechanisms for supporting a new stadium initiative while previous studies have attempted to measure the welfare associated with a sports franchise we develop and discuss bias that may be imparted to estimates when the researcher fails to calculate a choke price further we develop an unbiased approach to identify welfare when respondents perceive a risk of losing the franchise the range of welfare contribution by the vikings to households in minnesota is 445 3 million to 1 571 3 million according to a 95 confidence interval based on our study

international effects of national regulations external reference pricing and price controls under external reference pricing erp the price that a government permits a firm to charge in its market depends upon the firm s prices in other countries in a two country home and foreign model where demand is asymmetric across countries we show that home s unilaterally optimal erp policy permits the home firm to engage in a threshold level of international price discrimination above which it is just willing to export if the firm faces a price control abroad or bargains over price with the foreign government an erp policy can even yield higher home welfare than a direct price control

quantity competition in a spatial model the authors analyze a duopoly model where firms first choose locations on a line segment and then choose quantities in the second stage pure strategy quantity equilibria fail to exist for locations close together for low transport costs near agglomeration occurs and the firms choose locations where pure strategy quantity equilibria exist as transport costs rise firms become less direct competitors as they move away from the center of the market coauthors are james f klein eytan sheshinski and steven m slutsky we analyse a duopoly model where firms first choose locations on a line segment and then choose quantities in the second stage pure strategy quantity equilibria fail to exist for locations close together for low transport costs near agglomeration occurs and the firms choose locations where pure strategy quantity equilibria exist as transport costs rise firms become less direct competitors as they move away from the centre of the market coauthors are james f klein eytan sheshinski and stephen m slutsky

heating technology and energy use a discrete continuous choice approach to norwegian household energy demand abstract the aim of this paper is to describe the structure of the household s energy demand as a discrete continuous choice and on this basis establish an econometric model suitable for the data available in the norwegian energy surveys the discrete appliance choice is specified as a multinomial logit model with a mixture of appliance attributes operating costs and individual characteristics income housing unit characteristics etc as explanatory variables in the next step the continuous choice of energy use is modelled conditional on the appliance choice the energy prices turn out to be significant both when estimating the appliance choice and the conditional energy demand the estimated price elasticity for energy exceeds minus unity the paper discusses how this relatively strong price response should be interpreted in the context of other econometric analysis with no explicit appliance dependence finally the significance of the many household characteristics at both stages of the model signals a high degree of heterogeneity within the households which justifies the use of detailed micro data in the modelling of the energy demand

microeconometric analysis of residential water demand this paper develops a structural model for obtaining price elasticities and evaluating consumer s response to changes in nonlinear tariffs when only panel data on household consumption are available the model and the empirical strategy address problems implied by nonlinear tariffs existence of a fixed cost and use of limited data giving rise to a random effects model with a nonlinear individual effect results show that the estimated model does well at fitting data and demand is inelastic although elasticity varies by initial consumption block then i estimate welfare consequences of implementing several demand policies

seasonal concentration of tourism demand decomposition analysis and marketing implications abstract this paper analyzes seasonality in the united kingdom specifically the english regions in relation to tourists place of origin and main travel motivation the method used is a decomposition of the gini index which provides relative marginal effects that facilitate the identification of market segments open to counter seasonal marketing efforts this method has been combined with a graphical multivariate technique biplot which groups segments according to their seasonality characteristics seasonal patterns associated with particular segments differ significantly when studied on a disaggregated basis therefore an adequate level of disaggregation is essential in the design of counter seasonal strategies although this study focuses on british destinations this methodology could be used as a control and monitoring measure in the regional analysis of any destination facilitating regular adjustment of regional tourism marketing campaigns to minimize seasonality effects specifically by targeting the types of tourists less prone to seasonality

the welfare analysis of product innovations with an application to computed tomography scanners the main goal of this paper is to put forward a methodology for the measurement of product innovations using a value metric that is equating the magnitude of innovations with the welfare gains they generate this research design is applied to the case of computed tomography scanners a revolutionary innovation in medical technology the econometric procedure centers on the estimation of a discrete choice model the nested multinominal logit which yields the parameters of a utility function defined over the changing quality dimensions of the innovative product the estimated flow of social gains from innovation is used to compute a social rate of return to r d to explore the interrelation between innovation and diffusion and to trace the time profile of benefits and costs the latter suggesting the possible occurrence of technological cycles

the welfare effects of environmental taxation on a green market where consumers emit a pollutant this paper examines the welfare impact of emission taxes and subsidies in a green market where consumers emit a pollutant through their usage of products produced by duopolists for this purpose we employ a discrete continuous model including both consumer choice and usage of an environmentally differentiated product in a utility consistent framework the findings indicate that an emission tax is always welfare dominant over a subsidy on consumer purchases of the clean product because of its contribution to a reduction in environmental damage it does this by both inducing firms to improve the environmental qualities of their products and by constraining consumer usage of these products

including alternative resources in state renewable portfolio standards current design and implementation experience abstract as of october 2012 29 states the district of columbia and puerto rico have instituted a renewable portfolio standard rps each state policy is unique varying in percentage targets timetables and eligible resources increasingly new rps polices have included alternative resources alternative resources have included energy efficiency thermal resources and to a lesser extent non renewables this paper examines state experience with implementing renewable portfolio standards that include energy efficiency thermal resources and non renewable energy and explores compliance experience costs and how states evaluate measure and verify energy efficiency and convert thermal energy it aims to gain insights from the experience of states for possible federal clean energy policy as well as to share experience and lessons for state rps implementation

spatial differentiation and vertical mergers in retail markets for gasoline this paper studies an empirical model of spatial competition applied to gasoline markets the main feature is to specify commuting paths as the locations of consumers in a hotelling style model as a result spatial differentiation depends in an intuitive way on the structure of the road network and the direction of traffic flows the model is estimated using panel data on the quebec city gasoline market and used to evaluate the consequences of a recent vertical merger difference in difference and counterfactual simulation methods are compared and the results to a large extent validate the assumptions of the demand model jel g34 l13 l42 l81 q41 r41

the importance of brand and competition in defining u s religious markets author affiliation brian goff department of economics 1906 college heights boulevard western kentucky university bowling green ky 42101 usa brian goff wku edu corresponding authormichelle w trawick dagger department of economics 1906 college heights boulevard western kentucky university bowling green ky 42101 usa michelle trawick wku edu acknowledgment the authors thank bob tollison colleagues participating in the economics workshop at wku and two anonymous reviewers for comments any remaining flaws are the authors responsibility 1 introductionover the past 40 years economists have vastly expanded their study of behavior in markets where there is no explicit trade of goods or services one of the most fundamental and ubiquitous of these markets is that of religious behavior where economists and other social scientists have explored a variety of influences on religious participation at the outset of this research program economic models of religious choice borrowed from long used choice theoretic concepts such as the law of demand or the cost of time more recent contributions have included household production models taking account of human capital or the role of market level forces particularly religious competition prior empirical research has resulted in the identification of a variety of determinants of religious participation these include income education race and the degree of monopolization or competitiveness in the religious market as the empirical application and testing of these models has proceeded researchers have been aware of problems in measuring various aspects of religious choice such as religious participation or religiosity at the most general level religiosity may imply a difference in a secular versus religious worldview at the level of actual observation it often measures how frequently one attends church while some of the basic measurement issues related to religious choice and behavior may be beyond the power of researchers to investigate one important aspect is not but has largely been overlooked that is the type or brand of religious choice by and large empirical research has skirted this important definitional issue and treated different types or brands of religious choice much like one would treat different brands of carbonated soft drinks using such a broad homogeneous definition of the religious product implicitly assumes that economic and demographic characteristics exert similar influences on different types or brands of religious participation and thereby assumes that such branding is not of empirical significance in defining religious markets and behavior within them 1 moreover some tension has existed in prior empirical work as to whether religious competition is an exogenous factor the common assumption or whether it helps to define the choice variable 2our central question is whether the same processes are driving religiosity across brands we ask do consumers of religion respond differently to key economic variables such as income religious competition or other factors based on the brand of religion being consumed likewise do some economic variables exert their influence independently of brand an important part of our investigation centers on how to measure brand we first rely on two indicators of brand broad denominational categories and intensity of participation in religious activity the denominational categories are mainline protestant evangelical protestant and catholic the intensity breakdown is based on geographic regions of low moderate and high religious participation in addition we also examine whether the degree of religious competition itself helps to define brand in the next section we develop theoretical explanations for variation in overall religious participation as well as by brand and discuss prior empirical work in this area

reference pricing and firms pricing strategies abstract within a horizontal differentiation model and allowing for heterogeneous qualities we analyze the effects of reference pricing reimbursement on firms pricing strategies with this analysis we find inherent incentives for firms pricing behavior and consequently we shed some light on the time consistency of such policy the analysis encompasses different reference price rules i reference price as the minimum of the observed prices in the market ii reference price as a linear combination of firms prices results show that under the minimum policy firms are not able to coordinate on higher prices while the linear policy implicitly provides a coordination device we have also found that relatively to the linear policy when the reference price is the minimum of observed prices after policy implementation total and private expenditures are higher and consumer surplus and firms profits are lower with quality differentiation both the minimum and linear policies unambiguously lead to higher prices

metrics to measure the geographic characteristics of tourism markets an integrated approach based on gini index decomposition abstract compared to the metrics of tourism seasonality or tourism income distribution metrics of tourism spatiality remains under explored our principal aim is to enhance the way we measure the geographic dispersal of visitors by developing a gini index inspired dispersal metric we discuss the theoretical criteria for an ideal spatial metric and use these criteria to highlight the important links and differences between gini and the common ratio approach applying the methods to inbound australian tourism data we find that considering only one method in isolation not only increases the risk of incorrectly measuring the spatial performance of markets but also ignores interesting and often offsetting heterogeneous influences in the data we expect the outcomes to aid tourism researchers and managers wanting to widen their repertoire in spatial measurement methods and aid the choice of most appropriate method based on criteria firmly grounded in theory

decision making under uncertainty capturing dynamic brand choice processes in turbulent consumer goods markets we construct two models of the behavior of consumers in an environment where there is uncertainty about brand attributes in our models both usage experience and advertising exposure give consumers noisy signals about brand attributes consumers use these signals to update their expectations of brand attributes in a bayesian manner the two models are 1 a dynamic model with immediate utility maximization and 2 a dynamic forward looking model in which consumers maximize the expected present value of utility over a planning horizon given this theoretical framework we derive from the bayesian learning framework how brand choice probabilities depend on past usage experience and advertising exposures we then form likelihood functions for the models and estimate them on nielsen scanner data for detergent we find that the functional forms for experience and advertising effects that we derive from the bayesian learning framework fit the data very well relative to flexible ad hoc functional forms such as exponential smoothing and also perform better at out of sample prediction another finding is that in the context of consumer learning of product attributes although the forward looking model fits the data statistically better at conventional significance levels both models produce similar parameter estimates and policy implications our estimates indicate that consumers are risk averse with respect to variation in brand attributes which discourages them from buying unfamiliar brands using the estimated behavioral models we perform various scenario evaluations to find how changes in marketing strategy affect brand choice both in the short and long run a key finding obtained from the policy experiments is that advertising intensity has only weak short run effects but a strong cumulative effect in the long run the substantive content of the paper is potentially of interest to academics in marketing economics and decision sciences as well as product managers marketing research managers and analysts interested in studying the effectiveness of marketing mix strategies our paper will be of particular interest to those interested in the long run effects of advertising note that our estimation strategy requires us to specify explicit behavioral models of consumer choice behavior derive the implied relationships among choice probabilities past purchases and marketing mix variables and then estimate the behavioral parameters of each model such an estimation strategy is referred to as structural estimation and econometric models that are based explicitly on the consumer s maximization problem and whose parameters are parameters of the consumers utility functions or of their constraints are referred to as structural models a key benefit of the structural approach is its potential usefulness for policy evaluation the parameters of structural models are invariant to policy that is they do not change due to a change in the policy in contrast the parameters of reduced form brand choice models are in general functions of marketing strategy variables e g consumer response to price may depend on pricing policy as a result the predictions of reduced form models for the outcomes of policy experiments may be unreliable because in making the prediction one must assume that the model parameters are unaffected by the policy change since the agents in our models choose among many alternative brands their choice probabilities take the form of higher order integrals we employ monte carlo methods to approximate these integrals and estimate our models using simulated maximum likelihood estimation of the dynamic forward looking model also requires that a dynamic programming problem be solved in order to form the likelihood function for this we use a new approximation method based on simulation and interpolation techniques these estimation techniques may be of interest to researchers and policy makers in many fields where dynamic choice among discrete alternatives is important such as marketing decision sciences labor and health economics and industrial organization

a location model with preference for variety we propose a new location model where consumers are allowed to make multiple purchases i e one unit from each firm this model may fit many markets e g newspapers credit cards better than existing models a common feature of these markets is that some consumers are loyal to one brand while others consume more than one product our model yields predictions consistent with this observation if firms are allowed to choose their locations on the interval then spatial differentiation may not be maximal and in some cases it may even be minimal thus under certain conditions we restore hotelling s principle of minimum differentiation

the principle of minimum differentiation revisited abstract hotelling s model of differentiated products is examined and modified so that consumers have relatively low reservation prices for the differentiated products the problem of existence of a nash equilibrium in prices in a duopoly with given products is analysed when the reservation price is relatively low a nash equilibrium in prices exists for a larger range of products than when the reservation price is infinite next i examine product competition with instantaneous adjustment to the nash equilibrium prices of the previous game firms competing in a nash fashion have tendencies to move away from each other and try to achieve local monopolistic positions this is in sharp contrast with the acclaimed principle of minimum differentiation of the original model of hotelling of high reservation price where firms clustered in the product space

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

a multicategory model of consumers purchase incidence quantity and brand choice decisions methodological issues and implications on promotional decisions abstract the authors propose a multicategory model of consumers purchase incidence quantity and brand choice decisions the model specification allows for cross category promotion effects in both components of the primary demand incidence and quantity decisions and uses a flexible functional form of consumer s utility to accurately measure those cross category effects to demonstrate the importance of the methodology the authors investigate two issues of relevance to retailers namely how retailers should 1 allocate promotional expenditures across brands in a category and 2 coordinate timing of promotions of brands across categories the authors estimate the proposed model using consumers purchases in pasta sauce and pasta categories the results reveal that using restrictive functional forms of utilities or ignoring cross category effects in incidence and quantity decisions leads to incorrect assessments on relative allocation of promotional expenditures across brands furthermore retailers

reference pricing with elastic demand for pharmaceuticals in this paper we re examine the properties of two commonly adopted government reimbursement schemes for pharmaceuticals reference pricing and fixed percentage reimbursement we depart from the previous literature by assuming that the individual demand is price sensitive and depends on the copayment rate i e the part paid by each consumer we obtain two novel results under reference pricing first as the copayment rate increases so do pharmaceutical prices second this increase in pharmaceutical prices reduces social welfare whilst reference pricing does emerge as a preferable reimbursement scheme demand elasticities and the copayment rate interact in complex ways this leads unexpectedly to the possibility that a higher copayment rate lower reimbursement rate results in higher government expenditure

seasonal concentration of the hotel demand in costa del sol a decomposition by nationalities abstract costa del sol is a mature mediterranean destination in the south of spain with a degree of seasonality that has shown little variation during the last 20 years in this paper we apply the decomposition of the gini index of seasonal concentration by nationalities the main outcome of this decomposition is the estimation of relative contributions to the overall seasonal concentration and marginal effects by nationalities these measures can be of great help in the design of counter seasonal policies our results suggest that planners interested in reducing seasonality may concentrate their efforts in consolidating markets with negative marginal effect over the index of concentration like the british and nordic ones in addition marketing targets may be focused primarily in the winter season for the markets with positive relative marginal effect

farmers preferences for crop variety traits lessons for on farm conservation and technology adoption although in situ conservation is increasingly considered an efficient way of conserving plant genetic resources little is known about the incentives and constraints that govern conservation decisions among small farm holders in developing countries using a choice experiment approach we investigated ethiopian farmers crop variety preferences estimated the mean willingness to pay for each crop variety attribute and identified household specific and institutional factors that governed the preferences we found that environmental adaptability and yield stability are important attributes for farmers choice of crop varieties farmers are willing to forego some extra income or yield to obtain a more stable and environmentally adaptable crop variety among other things household resource endowments particularly land holdings and livestock ownership years of farming experience and contact with extension services are the major factors causing household heterogeneity of crop variety preferences based on our experimental results we derived important policy implications for on farm conservation breeding priority setting and improved variety adoption in ethiopia c 2010 elsevier b v all rights reserved less

customer information sharing among rival firms abstract the recent rapid growth of the internet as a medium of communication and commerce combined with the development of sophisticated software tools are to a large extent responsible for producing a new kind of information databases with detailed records about consumers preferences these databases have become part of a firm s assets and as such they can be sold to third parties this possibility has raised numerous concerns from consumer privacy advocates and regulators who have entered into a heated debate with business groups and industry associations about whether the practice of customer information sharing should be banned regulated or left unchecked this paper investigates the incentives of rival firms to share their customer specific information and evaluates the welfare implications if such exchanges are banned in the context of a perfect price discrimination model

regulation and pricing of pharmaceuticals reference pricing or price cap regulation we study the relationship between regulatory regimes and pharmaceutical firms pricing strategies using a unique policy experiment from norway which in 2003 introduced a reference price rp system called index pricing for a sub sample of off patent pharmaceuticals replacing the existing price cap pc regulation we estimate the effect of the reform using a product level panel dataset covering the drugs exposed to rp and a large number of drugs still under pc regulation in the time before and after the policy change our results show that rp significantly reduced both brand name and generic prices within the reference group with the effect being stronger for brand names we also identify a negative cross price effect on therapeutic substitutes not included in the rp system in terms of policy implications the results suggest that rp is more effective than pc regulation in lowering drug prices while the cross price effect raises a concern about patent protection

price dispersion and accessibility a case study of fast food this study examines spatial variation in the price and accessibility of fast food across a major urban area we use novel data on the price of a representative fast food meal and the location of fast food restaurants belonging to one of three major chains in the district of columbia and its surrounding suburbs these data are used to test a structural model of spatial competition the results of this study are easily interpreted and compared with a past analysis we find that spatial differences in costs and demand conditions drive variation in the number of firms operating in a market which in turn affects prices

demographic variables in demand analysis in this paper the authors discuss five procedures for incorporating demographic variables into theoretically plausible demand systems translating scaling and the gorman reverse gorman and implicit prais houthakker procedures these five procedures are used to incorporate a single demographic variable the number of children in a household into the generalized ces demand system using household budget data for the united kingdom for the period 1966 1972 excerpt

the value of scarce water measuring the inefficiency of municipal regulations abstract rather than allowing urban water prices to reflect scarcity rents during periods of drought induced excess demand policy makers have mandated command and control approaches primarily rationing the use of water outdoors while such policies are ubiquitous and likely inefficient economists have not had access to sufficient data to estimate their economic impact using unique panel data on residential end uses of water in 11 north american cities we examine the welfare implications of urban water rationing in response to drought using estimates of expected marginal prices that vary both across and within markets we estimate price elasticities specific to indoor and outdoor water use our results suggest that current policies do target water uses that households themselves are most willing to forgo nevertheless we find that rationing outdoor water in cities has costly welfare implications primarily due to household heterogeneity in willingness to pay for scarce water we find that replacing rationing policies with a market clearing drought price would result in welfare gains of more than 29 of what households in the sample spend each year on water

reference pricing competition and pharmaceutical expenditures theory and evidence from a natural experiment abstract we study the impact of regulation on competition between brand names and generics and pharmaceutical expenditures using a unique policy experiment in norway where reference pricing rp replaced price cap regulation in 2003 for a sub sample of off patent products first we construct a vertical differentiation model to analyze the impact of regulation on prices and market shares of brand names and generics then we exploit a detailed panel data set at product level covering several off patent molecules before and after the policy reform off patent drugs not subject to rp serve as our control group we find that rp significantly reduces both brand name and generic prices and results in significantly lower brand name market shares finally we show that rp has a strong negative effect on average molecule prices suggesting significant cost savings and that patients copayments decrease despite the extra surcharges under rp

tourism and economic development a survey this article surveys the literature on tourism and economic development identifying the contribution that tourism can make to development including foreign currency income and employment and the costs that it entails single equation and system of equations models for estimating tourism demand are provided indicating developing countries potential to benefit from increasing expenditure on tourism but their susceptibility to deterioration in price competitiveness the main sectors of tourism supply transportation tour operators travel agents and accommodation are examined and the importance of cross country integration between firms is highlighted the article argues that many of the problems associated with the use of environmental resources for tourism stem from market failure and it considers methods for increasing sustainably the returns from them

tax reform and housing demand the distribution of welfare gains and losses abstract we study distributional effects of a recent reform of the swedish system of income taxation which affects the price of owner occupied housing in calculating the welfare effects we account both for the non linearities of the income tax schedule and the dichotomous choice aspect of housing demand to own or to rent small and rosen 1981 have shown how the standard harberger type approximation formulae can be adapted to handle discrete choices and we modify their analysis for a non linear budget constraint

yearly monthly and weekly seasonality of tourism demand a decomposition analysis abstract annual seasonal variations in tourism demand have been a central theme in literature however annual seasonality is not the only time based inequality in tourism flows that has important implications on policy making decisions at destinations within the context of tourism this study aims to make an in depth analysis of intra monthly and intra weekly tourism demand using the entropy and relative redundancy measures as alternative seasonality indicators to the gini coefficient in order to provide new tools to manage tourism and propose new action policies at these frequencies in comparison with the gini coefficient the entropy measure is simpler to compute and it is easily decomposable using the case study of air arrivals and departures to and from the balearic islands results show the appropriateness of entropy and relative redundancy as seasonal indicators but also as a new information tools for tourism seasonality analysis

visitor attractions and events responding to seasonality seasonality is a protracted problem for the tourism sector due to the uneven nature of demand and the relatively fixed nature of the supply of capacity and resources particularly in the attraction sector managing the demand and supply at an individual business level poses many challenges for attraction infrastructure that is fixed in time and space and has a finite capacity this paper explores how attraction managers develop and use special events as a tool to address issues of seasonality at a country level the results show that 70 of businesses remained open throughout the year albeit with reduced opening hours to attract more visitors 39 of attractions that stay open host special events the local community is a key source market for special events the periodicity of events and themes engage visitors most effectively business responses to seasonality are a more complex issue than conventional tourism research has recognised

local implementation for green manufacturing technology diffusion policy in china from the user firms perspectives abstract in recent years china has started to change its growth strategy to a more sustainable model in response to the limits to growth dilemma specifically the national policy advocates to promote the use of green manufacturing technologies through demonstration projects and to incentivize chinese manufacturers to adopt these green technologies that are also encouraged by local governments these green technologies can increase the economic gains of manufacturers by reducing costs on energy consumption and shift away from selling low margin products however the local authorities often encounter obstacles when implementing policies for promoting these technologies among manufacturing firms this paper explores the factors that affect the decision making of user firms throughout the policy implementation process based on the econometric analysis of the survey for china s electric motors upgrading project in guangdong province this study shows that three key factors are helpful in the local government s effort to implement the national project i e manufacturers awareness the understanding of the energy efficiency technology and the long term macroeconomic benefits in addition encouraging the participation of financial institutions is especially useful for local governments to convince small and medium sized firms these findings are beneficial for local implementation of green manufacturing technology diffusion policies in china and have worldwide policy implication as well

water demand under alternative price structures we estimate the price elasticity of water demand with household level data structurally modeling the piecewise linear budget constraints imposed by increasing block pricing we develop a mathematical expression for the unconditional price elasticity of demand under increasing block prices and compare conditional and unconditional elasticities analytically and empirically we test the hypothesis that price elasticity may depend on price structure beyond technical differences in elasticity concepts due to the possibility of endogenous utility price structure choice observed differences in elasticity across price structures may be due either to a behavioral response to price structure or to underlying heterogeneity among water utility service areas

does regulation drive out competition in pharmaceutical markets abstract most countries regulate pharmaceutical prices either directly or indirectly on the assumption that competition is at best weak in this industry this paper tests the hypothesis that regulation of manufacturer prices and retail pharmacy margins undermines price competition we use data from seven countries for 1992 to examine price competition between generic competitors different manufacturers of the same compound and therapeutic substitutes similar compounds under different regulatory regimes we find that price competition between generic competitors is significant in unregulated or less regulated markets united states united kingdom canada and germany but that regulation undermines generic competition in strict regulatory systems france italy and japan regulation of retail pharmacy further constrains competition in france germany and italy regulation thus undermines the potential for significant savings on off patent drugs which account for a large and growing share of drug

investigating consumers purchase incidence and brand choice decisions across multiple product categories a theoretical and empirical analysis we propose a framework to investigate consumers brand choice and purchase incidence decisions across multiple categories where both decisions are modeled as an outcome of a consumer s basket utility maximization we build the model from first principles by theoretically explicating a general model of basket utility maximization and then examining the reasonable restrictions that can be placed to make the solution tractable without sacrificing its flexibility comparing with prior models we show why prior multicategory purchase incidence models overemphasize the role of the cross effects of a market mix of brands in other categories on the purchase incidence decision of a given category additionally we show that prior single category models are a special case of the proposed model when further restrictions are placed on the basket utility structure we estimate the model on household basket data for the laundry family of categories we show i why prior single category and multicategory models would systematically bias the estimates of the own and cross price promotional purchase incidence elasticities and ii how the market mix of each brand in each category affects the purchases across all categories which can help retailers make promotional decisions across a portfolio of products

examining demand elasticities in hanemann s framework a theoretical and empirical analysis this paper examines demand elasticities using an integrated framework proposed by hanemann hanemann m w 1984 discrete continuous models of consumer demand econometrica52 3 541 561 which models the incidence brand choice and quantity decisions of a consumer as an outcome of her utility maximization subject to budget constraints although the hanemann framework has been the mainstay of earlier efforts to examine these decisions jointly empirical researchers who have used the it to study purchase behavior have often found that the quantity elasticities are around 1 regardless of the brand or category we attempt to uncover the underlying reasons for this finding and propose approaches to get as close to the true quantity elasticities as possible we do this by i analytically demonstrating how assumptions on the distribution of the brand specific econometrician s errors imply certain restrictions that in turn force quantity elasticities to 1 ii discussing how these restrictions can be alleviated by considering a suitable specification of unobserved parameter heterogeneity and iii using scanner data to empirically illustrate the impact of the restrictions on quantity elasticities and the relative efficacy of multiple specifications of unobserved heterogeneity in easing those restrictions we find that the specification of unobserved heterogeneity crucially influences estimates of quantity elasticities and that the mixture normal specification outperforms the alternatives

myths and facts about electricity in the u s south this paper identifies six myths about clean electricity in the southern u s these myths are either propagated by the public at large shared within the environmental advocacy culture or spread imperceptibly between policymakers using a widely accepted energy economic modeling tool we expose these myths as half truths and the kind of conventional wisdom that constrains productive debate in so doing we identify new starting points for energy policy development climate change activists may be surprised to learn that it will take more than a national renewable electricity standard or supportive energy efficiency policies to retire coal plants low cost fossil generation enthusiasts may be surprised to learn that clean generation can save consumers money even while meeting most demand growth over the next 20 years this work surfaces the myths concealed in public perceptions and illustrates the positions of various stakeholders in this large u s region

energy efficiency as a resource in state portfolio standards lessons for more expansive policies abstract in this paper state electricity portfolio standards in the u s are analyzed to examine how energy efficiency is being created as a particular kind of resource through this type of climate change governance such policies can incentivize energy efficiency by requiring or encouraging electricity providers to meet a certain percentage of their demand through energy efficiency measures north carolina s portfolio standard is used as an in depth case study to identify factors that are then compared across all 36 states that include energy efficiency as part of a portfolio requirement or goal the main finding of this study is that state portfolio standards tend to emphasize demand side energy efficiency or energy efficiency on the customer s side of the electricity meter and only rarely incentivize a full range of both demand side and supply side efficiency changes as a result the amount of energy efficiency and climate change mitigation benefits that are likely to result from this type of portfolio standard policy tool are limited from this analysis lessons are drawn out for crafting stronger portfolio standards that incentivize a wider range of efficiency changes across electricity networks

trendy solutions why do states adopt sustainable energy portfolio standards abstract thirty four states had adopted sustainable energy portfolio standards seps or similar goals by the end of 2008 with 14 adoptions since 2006 there appears to be something trendy about seps and states may adopt seps when internal variables would indicate otherwise this analysis extends the current discussion of seps adoption beyond internal variables relying on innovation and diffusion theory logistic regression with seps adoption as the dependent variable is used to test internal determinants and diffusion measures for the years 1997 2008 of the internal determinants variables affluence and government ideology were found to be positive and significant the results show that regional and neighbor diffusion variables are significant in seps adoption decisions even when accounting for ideological distance from previous adopters

regulation of pharmaceutical prices evidence from a reference price reform in denmark reference price systems for prescription drugs constitute widely adopted cost containment tools under these regimes patients co pay a fraction of the difference between a drug s pharmacy retail price and a reference price that is set by the government reference prices are either externally based on drug prices in other countries or internally based on domestic drug prices determined we study the effects of a change from external to internal reference pricing in denmark in 2005 we find that the reform led to substantial reductions in retail prices reference prices and patient co payments as well as to sizable decreases in overall producer revenues and health care expenditures the reform induced consumers to substitute away from branded drugs for which we estimate strong preferences the increase in consumer welfare due to the reform therefore depends on whether or not we take perceived quality differences into account in its calculation

competition and the reference pricing scheme for pharmaceuticals by introducing n 1 firms with infinite cross price elasticity i e generic drugs we explore the effects of competition on the optimal pricing strategies under a reference pricing scheme rps a two stage model repeated infinite number of times is presented when stage 1 is competitive the equilibrium in pure strategies exists and is efficient only if the reference price r does not depend on the price of the branded product when generics collude the way r is designed is crucial for both the stability of the cartel among generics and the collusive prices in equilibrium an optimally designed rps must set r as a function only of the infinitely elastic side of the market and should provide the right incentives for competition

an empirical investigation of the welfare effects of banning wholesale price discrimination rand 054 rand2007 cls 1994 07 13 v1 2u standard latex document class rand rand 054 dispatch 12 7 2008 ce n a journal msp no no of pages 26 pe sharon rand journal of economics vol 40 no 1 spring 2009 pp 20 45 an empirical investigation of the welfare effects of banning wholesale price discrimination sofia berto villas boas economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination if downstream cost differences exist then discrimination shifts production inefficiently toward high cost retailers so a ban increases welfare if differences in price elasticity of demand across retailers exist discrimination may increase welfare if quantity sold increases so a ban reduces welfare using retail prices and quantities of coffee brands sold by german retailers i estimate a model of demand and supply and separate cost and demand differences simulating a ban on wholesale price discrimination has positive welfare effects in this market and less if downstream cost differences shrink or with less competition introduction wholesale price discrimination means that an upstream firm sets different prices for the same product for various downstream retailers wholesale price discrimination is commonly practiced in many markets examples include markets such as petroleum distribution steel heavy trucking tobacco and pharmaceuticals in several countries milk and other dairy products are sold using government administered or sanctioned discriminatory pricing schemes wholesale price discrimination practices are also used for services such as loans insurance and advertising 1 competition authorities have been concerned with wholesale price discrimination the european union treaty s article 82 c prohibits practices where a dominant firm would place trading partners at a competitive disadvantage the u s robinson patman act forbids discriminat ing in price between different purchasers where the effect may be to lessen competition unless the university of california berkeley sberto are berkeley edu i thank the editor igal hendel and two anonymous referees for many helpful comments and max auffhammer cyndi berck peter berck gal hochman silke januszewski forbes george judge kai uwe k uhn diana lazo mark muendler aviv nevo ariel pakes jeff perloff andrew sweeting miguel villas boas and participants at uc san diego university of michigan the inra idei conference in toulouse and the university of british columbia summer conference in industrial organization for their suggestions i thank daniel klapper for letting me have access to the data support from the giannini foundation and from an aes grant are gratefully appreciated see for gasoline markets texaco v hasbrouck 496 us 543 no 87 2048 1990 and the new york state motor fuel marketing practices act for steel chan hall and rust 2003 for heavy trucking volvo trucks north america inc v reeder simco gmc inc docket no 04 905 for tobacco brooke group ltd v brown and williamson tobacco corp 509 us 209 no 92 466 1993 for wholesale pharmaceuticals see http www datcp state wi us trade business unfair comp drug price jsp for dairy markets see for example gardner 1984 and for services see givens 1983 c 2009 rand copyright

farmland owners land sale preferences can they be affected by taxation programs land ownership fragmentation has resulted in the neglect of land improvement in many countries this study aims to analyze whether this challenge could be resolved by a tax policy that encourages land sales using finnish data real estate tax and temporal relaxation on taxation of capital gains showed some potential for the restructuring of land ownership potential sellers who could not be revealed by traditional logit models were identified with the latent class approach those landowners with an intention to sell even without a policy change were sensitive to temporal relaxation in the taxation of capital gains

two stage perfect equilibrium in hotelling s model hotelling i 929 suggests that his spatial competition model can be used to describe a wide range of differentiation problems he points to the selection of product variety within an industry as a potential application most of the subsequent work in his tradition has taken the equivalence of the two problems for granted in this note we look more closely at this equivalence we distinguish between two types of differentiated products according to the variety of preferences assumed with respect to those products building on this distinction we recognize that the demand faced by a firm locating on hotelling s line is analogous to the demand faced by a firm selecting a horizontally differentiated product it should be emphasized thus that the equivalence between the geographical and the product selection problem is by no means general and relies on specific assumptions about consumers preferences next we formulate a small model close to hotelling s one in which firms select a horizontally differentiated product within this model it will be shown that a pure strategy price equilibrium exists for every pair of products this statement is to be contrasted with the results of d aspremont et al i979 who have shown that in the original hotelling s setting an equilibrium fails to exist when firms are too close together 1 in addition we will examine the product selection problem faced by firms in a two stage game in the first stage each firm selects a product in the second stage the firm defines a price for its product we will seek the existence of a perfect equilibrium in this game a perfect equilibrium in this context can be viewed as a nash equilibrium in a game in which firms select a product aware of the non cooperative price equilibrium that will occur for each of their choices it will be shown that contrary to hotelling s principle the two firms will maximise their differentiation i e firms will locate at opposite ends of the market

an expected profit model for monetizing fishing location choices abstract we develop and analyze the properties of a new type of discrete choice model which jointly estimates the expected value of catch and location choice this model implicitly monetizes location choices and can be used to predict costs and effort redistribution of creating marine protected areas or of implementing other policy changes that either increase travel costs or alter expected revenue we illustrate our approach by considering the closing of the steller sea lion conservation area in the united states bering sea to pollock fishing

testing the behavior of rationally inattentive consumers in a residential water market abstract rationally inattentive consumers tend to apply simplified heuristics when making decisions we test the hypothesis of rational inattention in the context of residential water usage where water bills typically account for a small fraction of household expenditures and only attract casual attention we begin by rigorously testing whether or not residential water customers exhibit evidence of rational inattention we then propose a heuristic water demand model to explore the decision making of rationally inattentive consumers and validate the model by comparing the model with the discrete continuous choice model on attentive and fully informed decision makers in out of sample predictions

a note on the excess entry theorem in spatial models with elastic demand abstract this paper revisits the excess entry theorem in spatial models according to vickrey vickrey w s 1964 microstatics harcourt brace and world new york and salop salop s 1979 monopolistic competition with outside goods bell journal of economics 10 141 156 while relaxing the assumption of inelastic demand using a demand function with a constant demand elasticity we show that the number of firms that enter a market decreases with the degree of demand elasticity we find that the excess entry theorem does only hold when the demand elasticity is sufficiently small otherwise there is insufficient entry in the limiting case of unit elastic demand the market is monopolized we broaden our results with a more general transportation cost function