implications of market structure for elasticity structure though considerable attention has been given to market structure little research has been done on the relationship between market structure and elasticity structure the authors develop and partia

asset accumulation and labor force participation of disability insurance applicants abstract this paper provides empirical evidence of the existence of forward looking asset accumulation behavior among disability insurance applicants previously examined only in the theoretical literature using panel data from the rand health and retirement study i show that rejected applicants for social security disability insurance ssdi possess significantly more assets than accepted applicants immediately prior to application and exhibit lower attachment to the labor force these empirical results are consistent with the theoretical prediction in diamond and mirrlees 1978 and golosov and tsyvinski 2006 that certain individuals with high unwillingness to work maximize utility by planning in advance for their future disability insurance application because the existing empirical literature on disability insurance does not account for this intertemporal channel it may underestimate the total work disincentive effect of ssdi

a natural experiment on sick pay cuts sickness absence and labor costs abstract this study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs german federal law reduced the legal obligation of german employers to provide 100 continued wage pay for up to six weeks per sickness episode in 1996 statutory sick pay was decreased to 80 of foregone gross wages within the reform s target group private sector employees this measure increased the proportion of employees having zero days of absence between 6 and 8 quantile regression estimates indicate that employees with up to 5 5 annual absence days reduced their days of absence by about 12 extended analyses suggest that in industries that enforced the cut behavioral effects were about twice as large we show that the direct labor cost savings effect stemming from the cut in replacement levels clearly exceeds the indirect effect due to the decrease in absenteeism our calculations about the total decrease in labor costs are very much in line with official data which suggest that total employer provided sick pay decreased by 6 7 or 1 7 billion per year

modeling inertia and variety seeking tendencies in brand choice behavior theories of exploratory behavior suggest that inertia and variety seeking tendencies may coexist within the individual implying that the same individual may exhibit inertia and variety seeking at different times depending on his her choice history past research has not allowed for such within consumer variability in these tendencies the purpose of this study is to present a choice model that allows us to identify such hybrid behavior i e a mixture of inertia and variety seeking and to distinguish hybrid behavior from simpler types of behavior such as pure inertia pure variety seeking and zero order behavior the model is estimated at the household level using panel data for three product classes covering a total of 1069 households the empirical analysis shows that more than half the households analyzed exhibited hybrid behavior rather than simpler types of behavior

how financial incentives induce disability insurance recipients to return to work using a local randomized experiment that arises from a sharp discontinuity in disability insurance di policy in norway we provide transparent and credible identification of how financial incentives induce di recipients to return to work we find that many di recipients have considerable capacity to work that can be effectively induced by providing financial work incentives we further show that providing work incentives to di recipients may both increase their disposable income and reduce program costs our findings also suggest that targeted policies may be the most effective in encouraging di recipients to return to work

the effect of old age assistance on retirement abstract researchers have devoted considerable attention to analyzing the impact of social security on retirement with mixed findings however the means tested program old age assistance oaa dwarfed social security until the 1950s and coincided with the early decline in elderly labor force participation also oaa benefits were determined by the states a key source of policy variation i estimate the relationship between oaa benefits and elderly participation using individual data from the 1940 and 1950 censuses oaa s impact is found to be strong and implies that participation would have risen slightly instead of falling if benefits had not increased during the 1940s

family welfare cultures strong intergenerational correlations in various types of welfare use have fuelled a long standing debate over whether welfare receipt in one generation causes welfare participation in the next generation some claim a causal relationship in welfare receipt across generations has created a culture in which welfare use reinforces itself through the family others argue the determinants of poverty or poor health are correlated across generations so that children s welfare participation is associated with but not caused by parental welfare receipt however there is little empirical evidence to sort out these claims in this paper we investigate the existence and importance of family welfare cultures in the context of norway s disability insurance di system to overcome the challenge of correlated unobservables across generations we take advantage of random assignment of judges to di applicants whose cases are initially denied some appeal judges are systematically more lenient which leads to random variation in the probability a parent will be allowed di using this exogenous variation we find strong evidence that welfare receipt in one generation causes welfare participation in the next generation when a parent is allowed di their adult child s participation over the next five years increases by 6 percentage points this effect grows over time rising to 12 percentage points after ten years while these findings are specific to our setting they serve to highlight that welfare reforms can have long lasting effects on program participation since any original effect on the current generation could be reinforced by changing the participation behavior of their children as well the detailed nature of our data allows us to compare the intergenerational transmission with spillover effects in other networks and to explore mechanisms our findings point to a special link between parents and their children with little impact due to close neighbors di participation we find suggestive evidence that what may change as a result of a parent being allowed di is their children s beliefs about the efficacy of trying to get on to the di program or their attitudes about di participation and its stigma

a micromodeling approach to investigate the advertising sales relationship the purpose of this paper is to derive a model of advertising effects on the firm s sales a micromodel is postulated and aggregated across individuals and over time to produce a macromodel of the aggregate sales advertising relationship for a single product the micromodel postulated is very simple it incorporates two factors reach of the ads and rate of decay of their effectiveness over time this approach to modeling advertising effects is shown to be fruitful in several respects 1 the coefficients of the aggregate equation are easily interpretable in terms of the reach and decay parameters 2 the model derived is nonlinear yet estimable 3 a special case of the model is very similar to lag models that have been in use 4 the model can be used whatever the unit of time is 5 the carryover effect of advertising as commonly defined is not constant but depends upon the previous spending levels and 6 the model helps illustrate that the duration of advertising may be greatly overstated if aggregate lagged dependent variable models are simplistically interpreted

poverty in dictator games awakening solidarity abstract this paper investigates the effect of recipient poverty and medicines on dictator game giving we develop a new design with three variants 1 subjects do not know they are participating in an experiment 2 dictators receive three 5 bills instead of 15 coins 3 three recipients are used instead of one we performed three different treatments regarding the information about recipients i no info condition ii poverty dictators were informed that their recipients were poor iii medicines donations were given in the form of medicines instead of money we found that 46 percent of the subjects gave the full endowment in the poverty treatment while in the medicines treatment this percentage increased to 72 percent

sales growth of spanish tourist firms some implications of gibrat s law on marketing management abstract the research presented in this paper is targeted towards empirical validation of three hypotheses deduced from gibrat s law and concerning sales growth in the spanish tourism industry the research refers to the years 1997 2000 and uses a sample of 1131 surviving firms all of which are devoted to tourism activities regression correlation and automatic interaction detection techniques were used throughout the sample the results show the existence of two firm growth segments set apart by a threshold size reached only when initial size is measured in sales terms firms above the threshold size grow at a significantly lower accumulated rate than firms below it thus contradicting gibrat s law however no relationship was observed for successive inter annual growth rates this in turn suggests that marketing actions and programmes have rather a medium and long term effect than a short term effect over sales growth sound implications about the firms degree of market opportunity management strategic interdependence and market orientation were deduced from these results

a model of stochastic variety seeking in this paper we propose and test a stochastic model of consumer choice that incorporates attribute based variety seeking our stochastic variety seeking model svs has nested within it a fixed variety seeking model a zero order model of choice and a first order pure variety model we compare the svs model to alternative models under stochastic variety seeking we examine the nature of the variety sought and provide a test of the satiation hypothesis unlike fixed variety seeking models our model allows variety seeking to vary in intensity and consistency over individuals as well as over purchase occasions we show that the model is equivalent to a random utility model with the features that the attributes of brands relative to those of the brand previously bought influence choice and the extent of variety seeking is random over choice occasions for a given individual the model permits a closed form solution to the conditional switching probabilities parameterized by variety seeking parameters and dependent on brand attributes we apply our model to individual choice data obtained from a field study specifically designed for the purpose at hand

emphasising the problem or the solution in charitable fundraising for international development abstractwe conduct a laboratory experiment to test the effect on charitable donations to international development ngos ingos of emphasising current deprivation in a developing country versus emphasising the potential good a donation can achieve using a double blind dictator experiment with earned endowments we find that varying the information emphasis has no significant effect on total donations nor on the probability of donating we find suggestive evidence that an emphasis on current deprivation may raise the variance of donations and thus the size of donations conditional on donating but the effect is not significant in hurdle models that explicitly recognise this

empirical generalizations about market evolution and stationarity we present empirical generalizations about conditions under which marketing variables evolve or remain stationary we first define evolution statistically and make the case why it is an important concept for increasing our understanding of long run marketing effectiveness we then briefly review ways in which evolution can be tested empirically from readily available data we present a database of over 400 prior analyses and catalog the relative incidence of stationarity versus evolution in market performance and marketing spending we find that evolution is the dominant characteristic for sales and marketing mix spending but that stationarity is the dominant characteristic for market share thus we find strong support for the conjecture that many markets are in a long run equilibrium where the relative position of the players is only temporarily disturbed by their respective marketing activities we assess the impact of a number of covariates on the likelihood of finding stationarity evolution in sales

willpower and the optimal control of visceral urges common intuition and experimental psychology suggest that the ability to self regulate willpower is a depletable resource we investigate the behavior of an agent who optimally consumes a cake or paycheck or workload over time and who recognizes that restraining his consumption too much would exhaust his willpower and leave him unable to manage his consumption unlike prior models of self control a model with willpower depletion can explain the increasing consumption sequences observable in high frequency data and corresponding laboratory findings the apparent links between unrelated self control behaviors and the altered economic behavior following imposition of cognitive loads at the same time willpower depletion provides an alternative explanation for a taste for commitment intertemporal preference reversals and procrastination accounting for willpower depletion thus provides a more unified theory of time preference it also provides an explanation for anomalous intratemporal behaviors such as low correlations between health related activities

the effects of cross ruff coupons on sales and profits cross ruff coupons are obtained at the time of purchase of a carrier brand and may be redeemed at a later date on a target brand these coupons therefore have the ability to link consumer purchases across different brands as well as shopping trips we model the effects of cross ruff coupons on consumer choice behavior and derive the conditions under which cross ruff coupons can lead to higher sales and profits than other types of package coupons the model also provides insights into the selection of appropriate carrier and target brands and on how the choice of an appropriate carrier or a target brand is affected when the categories that these brands belong to are demand complements or substitutes we conduct an empirical analysis using data from 195 different cross ruff coupon campaigns observed in grocery stores in a major u s city over a three month period the data are consistent with the key insights provided by the model

variety seeking through brand switching a concept of variety seeking behavior is modeled as a stochastic brand choice model the model yields a measure of variety seeking for each individual consumer panel data for 28 products are analyzed for each household and the possibility of market segmentation by variety seeking behavior is explored

unemployment and labor force participation in the united states abstract this paper uses historical data from the united states to investigate the relationship between unemployment and labor force participation cointegration analysis supports a long run relationship between these two variables which leads us to question the empirical relevance of the unemployment invariance hypothesis for the united states

the dynamic relationship between disability onset earnings and disability insurance application and receipt at the time of disability onset the effect of disability insurance on earnings is limited by the finding that work prevented respondents who account for the majority of benefit claims have negligible earnings regardless of application status

choice map inferring a product market map from panel data this paper describes choice map a model that infers a product market map from panel data choice map is a stochastic brand choice model a random utility quantal choice model and a multidimensional scaling procedure choice map combines the parsimony of stochastic choice models the rationale of random utility models and the ability of multidimensional scaling procedures to simultaneously infer both brand positions and consumer preferences from preference choice data choice map assumes that consumers have stationary purchase probabilities for the observational period which makes the model best suited to frequently bought mature product categories neither experimental nor survey data are required traditional mapping methods that scale such data may not yield the same structure for low involvement products as will a procedure like choice map that scales behavioral data choice map s descriptive and predictive validity exceeds that of an alternative stochastic brand choice model the dirichlet multinomial for a test data set

unemployment and labour force participation in sweden abstract this paper investigates the relationship between swedish unemployment and labour force participation cointegration analysis supports a robust long run relationship between the two variables this finding puts the empirical relevance of the unemployment invariance hypothesis into question

estimation of latent class models with heterogeneous choice probabilities an application to market structuring recently grover and srinivasan developed a latent class based approach to analyze market structure by using brand switching data the authors provide an iterative maximum likelihood procedure for

unemployment and other measures of labor market inefficiency a comparison of u k and u s labor markets 1931 96 unemployment is probably the most widely feared phenomenon of our times it represents an enormous waste of human resources reflects an important degree of inefficiency in economic systems and causes a disturbing degree of social distress organisation for economic co operation and development oecd 1994 pp 4 6 i introduction unemployment is undoubtedly one of the most researched areas of economics determinants of the number of unemployed and duration of unemployment the role of unemployment on the depreciation of human capital and on general life satisfaction the interrelationship of unemployment and inflation and unemployment and output okun s law and policies to reduce or even eliminate unemployment are just a few of the areas of research on unemployment the underlying assumption in many studies on unemployment is that there is a very close correspondence between unemployment and labor market inefficiency as witnessed in the quote by the oecd just given although rarely if ever stated there is also the assumption that a given unemployment rate indicates similar levels of inefficiency either across time and or regions or countries unfortunately and somewhat surprisingly this assumption has not been tested thus far 1 given the importance of comparisons of unemployment on the direction of macroeconomic policy of governments it is very important to determine whether unemployment is indeed a good proxy for labor market inefficiency the goal of the article therefore is to examine this issue thus we pose the following key questions 1 to what degree do unemployment rates reflect labor market efficiencies 2 if the goal is to measure relative labor market inefficiency is it meaningful to compare unemployment rates over time and 3 to what degree do differences in unemployment rates across countries reflect differences in labor market inefficiencies basic economic theory shows that inefficiency in any market depends not only on the wedge between supply and demand but also on the elasticities of demand and supply the calculation of so called harberger triangles harberger 1954 of deadweight loss dwl which has a long history in the industrial organization and public finance literatures indicates that for a given wedge between supply and demand the dwl can be very different depending on the elasticities of supply and demand interestingly however studies examining the costs of unemployment do not focus on this basic view of welfare loss studies such as gordon 1973 ahsenfelter 1980 hurd 1980 clark and oswald 1994 murphy and topel 1997 and leslie and blackaby 1999 among others examine the costs of unemployment from an individual perspective but do not measure inefficiency from a market perspective which is the focus of the harberger triangles except for a publication by fortin and bernier 1988 2 we know of no other application of calculating harberger triangles to determine the level of inefficiency in the labor market therefore this article uses labor market data from 1931 to 1996 in the united states and united kingdom to calculate the dwl of unemployment and then compares the estimates of dwl to the unemployment rate to determine how closely related inefficiency and unemployment are 3 the following section investigates the theoretical relationships between unemployment labor supply and demand elasticities and dwl from this discussion we propose two alternative measures of inefficiency the first is the unemployment loss index dwl divided by gross domestic product gdp which indicates how large labor market inefficiency is relative to total output in the economy the second measure is dwl per unemployed person a measure of the potential average gains to employing an unemployed individual section iii outlines the data and methodology used to estimate the elasticities of labor supply and labor demand over time in the united states and united kingdom allowing for changes in the elasticities over time

intertemporal aggregation of heterogeneous consumers abstract this paper deals with a relatively unexamined facet of stochastic brand switching models their connection to market share models we derive a composite market share model based on aggregation of heterogeneous markovian type individuals each purchasing a brand from the product class several times during the period of analysis the characteristics of this composite model are examined and interestingly suggest a markov type market share model moreover this examination sheds some light on a phenomenon uncovered in econometric studies of market share response to advertising the slow decay of the lagged market share term as the length of the measurement period is increased

an investigation into the order of the brand choice process this paper investigates the order of the brand choice process at the individual family level using a variety of tests t likelihood ratio binomial runs and multinomial runs tests the test of stationarity developed permits separate analyses for stationary and nonstationary purchase sequences our analyses indicate that the purchase sequences of a majority of stationary consumers are consistent with the zero order assumption this result is observed for all the nine frequently bought packaged goods studied with the use of panel data and for a product category soft drinks using experimental data

a dual self model of impulse control we propose that a simple dual self model gives a unified explanation for several empirical regularities including the apparent time inconsistency that has motivated models of quasi hyperbolic discounting and rabin s paradox of risk aversion in the large and small the model also implies that self control costs imply excess delay as in the o donoghue and rabin models of quasi hyperbolic utility and it explains experimental evidence that increased cognitive load makes temptations harder to resist the base version of our model is consistent with the gul pesendorfer axioms but we argue that these axioms must be relaxed to account for the effect of cognitive load

testing for choice dynamics in panel data this article applies different approaches to distinguish state dependence from unobserved heterogeneity and serial correlation and hence test for state dependence in consumer brand choices first we apply a simple method proposed by chamberlain which involves lagged exogenous variables only second we also estimate a lagged dependent variable specification proposed by wooldridge third we use the estimation approach suggested by wooldridge to estimate a model with both lagged dependent and exogenous variables to distinguish between the two different sources of choice dynamics state dependence and lagged effects of the exogenous variables our analysis reveals that the best approach is to use models with both lagged dependent and exogenous variables our findings include strong evidence for state dependence in five out of the six product categories studied in this article

procrastination and obedience in this lecture i shall focus on situations involving repeated decisions with time inconsistent behavior although each choice may be close to maximizing and therefore result in only small losses the cumulative effect of a series of repeated errors may be quite large thus in my examples decision makers are quite close to the intelligent well informed individuals usually assumed in economic analysis but cumulatively they make seriously wrong decisions that do not occur in standard textbook economics this lecture discusses and illustrates several pathological modes of individual and group behavior procrastination in decision making undue obedience to authority membership of seemingly normal individuals in deviant cult groups and escalation of commitment to courses of action that are clearly unwise in each case individuals choose a series of current actions without fully appreciating how those actions will affect future perceptions and behavior the standard assumption of rational forwardlooking utility maximizing is violated the nonindependence of errors in decision making in the series of decisions can be explained with the concept from cognitive psychology of undue salience or vividness for example present benefits and costs may have undue salience relative to future costs

strotz meets allais diminishing impatience and the certainty effect abstract decision makers tend to exhibit a higher degree of impatience when considering a delay to an immediate reward than when contemplating an identical delay to an equal future reward this work argues that diminishing impatience originates from the distinction between the certain present and the risky future a simple functional representation of preferences exhibiting time inconsistency when the future is uncertain is derived experimental evidence which is inconsistent with other formulations that account for diminishing impatience supports the proposed approach the new theory uncovers a tight relation between diminishing impatience and well known behavioral regularities in choice under risk and uncertainty jel d12 d81

a multivariate polya model of brand choice and purchase incidence in this paper we develop an integrated stochastic model of purchase timing and brand selection which incorporates the influence of marketing mix variables seasonality and trend and also allows for various individual choice mechanisms our approach rests on the assumptions of a zero order choice process a poisson timing process and purchase rates following a multivariate gamma distribution over the population the scale parameters of which vary according to marketing activities and time the resulting model is a multivariate polya process and the distribution of brand choice probabilities turns out to be a generalized dirichlet distribution thus most currently used zero order models can be considered to be special cases of this approach furthermore we derive a number of market diagnostics which provide insights into market structure and demonstrate the model s use for marketing strategy simulation based on extensive testing of the underlying hypotheses we finally validate the model using empirical data and show that it fits the market in question

competitive market structures a subset selection analysis market structure models are used to identify submarkets or to test for the presence of submarkets where within group competition is much stronger than across group competition the implicit assumption in such models is that the brands in a submarket compete on the basis of their shared product features however if significant variety seeking effect exist in the market such an assumption may not be valid we present a model based on a subset selection procedure for analyzing competitive market structures and develop tests of significance for variety seeking effects present in the market for each brand in the market the subset selection procedure identifies sets submarkets of brands that are in close competition the competitive market structure is defined by the possibly overlapping submarkets that are identified for each brand and the model provides insights on whether the brands in a submarket are of a reinforcing or a variety seeking kind the application of our model to two different consumer packaged goods markets highlights its contribution relative to extant methods

the health and earnings of rejected disability insurance applicants applicants for social security disability benefits who fail to pass the medical screening form a natural control group for beneficiaries data drawn from the 1972 and 1978 surveys of the disabled done for the social security administration show that fewer than 50 percent of rejected male applicants work typical earnings of those that do are less than 59 percent of median earnings for other men their age these data cast doubt on recent econometric work that suggests that the disincentive effects of the social security disability program have been substantial copyright 1989 by american economic association

disability earnings income and consumption using longitudinal data for the period 1968 2005 for a sample of male household heads we determine the prevalence of disability during the working years and examine how the extent of disability affects a range of outcomes including earnings income and consumption we have seven main findings first disability rates are high we divide the disabled along two dimensions based on the persistence and severity of their work limiting condition we estimate that a person reaching age 56 has a 53 percent chance of having been disabled at least once during his working years and a 19 percent chance that he has begun a chronic and severe disability second the economic consequences of disability are frequently profound ten years after disability onset a person with a chronic and severe disability on average experiences a 68 percent decline in earnings a 32 percent decline in after tax income a 22 percent decline in food and housing consumption and a 21 percent decline in food consumption third the various economic consequences differ sharply across disability groups the outcome declines for those with a chronic and severe disability are often more than twice as large as those for the average disabled fourth our findings show the partial and incomplete roles that individual savings family support and social insurance play in reducing the consumption drop that follows disability only about half of this most disabled group reports receiving social security disability insurance or supplemental security income fifth we find a noticeable fall in earnings and income prior to the onset of a reported disability consumption also falls somewhat suggesting that future disability is partially but incompletely predictable in the short run sixth time use and detailed consumption data further indicate that disability is associated with a decline in well being seventh the quantities we have estimated combined with elasticities from the literature allow us to examine the optimality of current compensation for the disabled we find that the current compensation for our most disabled group appears to be lower than is optimal

try it you will like it does consumer learning lead to competitive price promotions there is strong evidence that consumers learn from their brand consumption experiences and continuously update their brand purchase probabilities however in explaining why established competitive brands continuously compete through periodic price promotions most of the existing theories do not attribute this phenomenon to underlying consumer learning yet try it you will like it is often the stated rationale of the practicing marketing manager in offering consumers a price promotion on a brand this paper examines the connection between consumer learning and the offering of price promotions the consumer model specified is markovian in nature and encompasses in addition to consumer learning other empirical findings such as the increase in product class consumption in response to price reductions the consumer models used in the existing game theoretic approaches to this problem are shown to be mostly special cases of the proposed model it is demonstrated that for the commonly used price response functions the existence of consumer learning at a level of intensity consistent with that identified in empirical works makes it optimal for competing brands to periodically offer price promotions moreover it is shown that the competing brands should promote in different periods as opposed to head to head

can social security explain trends in labor force participation of older men in the united states after a long decline the labor force participation rate lfpr of older men in the united states leveled off in the 1980s and began to increase in the late 1990s we examine how changes in social security rules affected these trends we attribute only a small portion of the decline from the 1960s 80s to the increasing generosity of social security over this period increases in the full retirement age and the delayed retirement credit explain one quarter to one half of the recent increase in the lfpr increasing educational attainment and increasing lfpr of married women also contributed to the recent rise

job search in thick markets abstract i analyze empirically the effects of urban and industrial agglomeration on both search behavior and the efficiency of matching the analysis is based on a unique panel data set from the italian labor force survey micro data covering 520 randomly drawn local labor market areas 66 of the total over the four quarters of 2002 i compute transition probabilities from non employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched i then test whether these are affected by market size industrial variety and or industry specialization the main results indicate that market size and industry specialization raise job seekers chances of finding employment conditional on having searched while industrial variety is not significantly different from zero finally the effect of agglomeration on non employed individuals search behavior cannot be significantly distinguished from zero

hysteresis in unemployment unemployment has risen sharply in a number of countries and it appears to be becoming more persistent the experience of the 1970s and 1980s showed that adverse unemployment shocks could have long lasting effects with very serious economic and social consequences a key mechanism producing these adverse consequences was hysteresis in unemployment whereby temporary rises in unemployment generated by supply and or demand shocks had permanent or at least very persistent effects clearly it is important to understand how hysteresis mechanisms might operate in order to avoid such adverse outcomes on the other hand experience during the subsequent two decades showed that under more favourable macroeconomic conditions it is possible to observe good hysteresis effects now is a very appropriate time to re visit the issue of hysteresis in unemployment in order to avoid the errors of the 1970s and 1980s and if possible to get hysteresis effects working in a positive direction copyright 2011 oxford university press

consumer bankruptcy and financial health this paper estimates the effect of chapter 13 bankruptcy protection on financial health using a new data set linking bankruptcy filings to credit bureau records our empirical strategy uses the leniency of randomly assigned judges as an instrument for chapter 13 protection we find that chapter 13 protection decreases an index measuring adverse financial events such as civil judgments and repossessions by 0 323 standard deviations and increases the probability of being a homeowner by 13 2 percentage points chapter 13 protection has little impact on open unsecured debt but decreases the amount of debt in collections by 1 333

competitive response and equilibria this paper investigates the relationship between market share and promotional expenditures the long run using data that span a decade and 91 product categories we find that market shares are stationary for a majority of the products in the data base we find that relative promotional expenditures for the products are offsetting in the long run finally for products whose market shares show a trend it is difficult to discern the impact of relative promotional expenditure on the evolution of market share this result generalizes the empirical finding of bass et al bass f m m m givon m u kalwani d reibstein g p wright 1984 an investigation into the order of the brand choice process marketing sci 3 4 267 287 that offsetting competitive activity plays a role in the maintenance of what appears to be stationary and zero order behavior

distinguishing income from substitution effects in disability insurance a set of studies conducted over the last 15 years has produced a near consensus that the social security disability insurance system ssdi has substantial disincentive effects on the labor supply of near elderly males diminishing labor force participation increasing the sensitivity of labor force exit decisions to adverse economic shocks and encouraging those nearing retirement to claim disability benefits and subsequently transfer into the social security retirement program yet efforts by the social security administration ssa to encourage labor supply among the disabled by removing the work disincentives built into ssdi have been almost entirely unsuccessful most notably in 1999 congress authorized the ticket to work program which provides an array of inducements for current ssdi beneficiaries to take up employment including permitting a trial work period of up to nine months providing 7 75 years of ongoing medicare eligibility following return to work and providing three years of automatic benefit reinstatement when claimants workplace earnings fall below a threshold level each of these steps reduces the implicit tax placed on labor supply by the ssdi program despite these lures fewer than 1 400 0 01 percent of the 12 2 million tickets issued to date have led to successful workforce integration autor and duggan 2006

does disability insurance receipt discourage work using examiner assignment to estimate causal effects of ssdi receipt abstract we present the first causal estimates of the effect of social security disability insurance benefit receipt on labor supply using all program applicants we use administrative data to matc

procrastination of enjoyable experiences abstract the tendency to procrastinate applies not only to aversive tasks but also to positive experiences with immediate benefits the authors propose that models of time discounting can explain this behavior and they test these predictions with field data and experiments a multicity study shows that people with unlimited time windows delay visiting desirable landmarks however procrastination is reduced when the window of opportunity is constrained similarly people procrastinate in redeeming gift certificates and gift cards with long deadlines more than those with short deadlines resulting in overall lower redemption rates these results run counter to participants predictions and typical models of impulsive behavior

disability benefits replacement ratios and the labour market a time series approach in this paper a study of factors affecting the number of disability beneficiaries in norway is presented equations determining entry rates into the disability benefit system are estimated using aggregated time series data grouped by sex and age unemployment is found to influence disability entry the results regarding effects of the replacement ratio are ambiguous a model determining the number of beneficiaries including the estimated entry equations is presented the model is used to simulate the effect of counterfactual changes in exogenous variables on the number of disability beneficiaries

technical note why does the nbd model work robustness in representing product purchases brand purchases and imperfectly recorded purchases one of the most managerially useful constructs that emerge from the stochastic modelling of brand choice is that of conditional expectations in this paper the conditional expectations are derived for a generalization of the nbd model called the beta binomial negative binomial distribution bb nbd model first described by jeuland bass and wright the model developed to jointly represent the product class purchase and brand selection processes is also particularly appropriate for analyzing panel data when not every purchase occasion is recorded the conditional expectations for the nbd model increase linearly with the number of previous purchases made by an individual therefore the degree of nonlinearity of the conditional expectations in our more complicated model allows us to assess the robustness of nbd results when in fact the basic assumptions are not true this paper gives the simple conditions when the nbd will exactly or approximately represent the bb nbd and describes the qualitative deviations between these two models when they are not identical

inferring the order of the choice process using consumer purchase histories the small sample properties of the multinomial runs mr test which is often used to test for effects of previous brand choices on current brand choice probabilities are explored in this article through a monte carlo study of different buyer level brand choice probability models the power and the actual size of this test under a null hypothesis of no previous brand choice effects are shown to depend on the nature of the true underlying model length of purchase history and skewness in baseline choice probabilities we provide some guidelines for when the mr test is more useful in empirical research

formal choice models in marketing the paper gives an overview and evaluates the theoretical traditions underlying choice models that are used in marketing in particular the emphasis of this essay is on the underlying assumptions limitations and empirical demands of these choice models four fundamental choice models are used as a basis to analyze this complex field the neoclassical economic theory as extended by lancaster the risk preference theory of choices under uncertainty the strict utility theory and the random utility theory these four choice models and their extensions are compared and contrasted along the three critical steps in the model building process theory generation parameterization and estimation

the long term effects of price promotions on category incidence brand choice and purchase quantity abstract to what extent do price promotions have a long term effect on the components of brand sales namely category incidence brand choice and purchase quantity the authors answer this question by using persistence modeling on weekly sales data of a perishable and a storable product derived from a scanner panel their analysis reveals first that permanent promotion effects are virtually absent for each sales component next the authors develop and apply an impulse response approach to estimate the promotional adjustment period and the total dynamic effects of a price promotion specifically they calculate the long term equivalent of gupta s 1988 14 84 2 breakdown of promotional effects because of positive adjustment effects for incidence but negative adjustment effects for choice the authors find a reversal of the importance of category incidence and brand choice 66 11 23 for the storable product and 58 39 3 for the perishable product the authors discuss the implications of the findings an

the craft of labormetrics using a wide array of examples from the literature and from original estimates the author examines the pitfalls that make good empirical research in labor economics at least as much craft as statistical technique among the subjects discussed are the appropriateness and cleanliness of data problems of extreme observations the validity of attempts to produce exogeneity using instrumental variables natural experiments and structural models and the treatment of selectivity and unobservable individual effects the author stresses the importance of testing empirical results to ensure that they make sense and of presenting them clearly and economically

the informational value of unemployment statistics a note on the time series properties of participation rates abstract using a battery of unit root tests we show that labor force participation rates in australia canada and the u s are non stationary this implies that great care is needed before unemployment rates are used as measures of joblessness

chapter 6 market share models publisher summary this chapter describes that three basic principles motivate the specification of the market share models market share models should be competitive descriptive as well as predictive and profit oriented being fundamentally competitive implies that one cannot know the effect or effectiveness of a marketing action without accounting for the actions of competitors market share models are models for understanding how the marketing efforts of every brand impact the results in a competitive marketplace only by describing the influence of each marketing instrument can one gain a basis for marketing planning prediction alone is not enough time series models that forecast the future from the past sales provide no insight into how sales are generated the emphasis on being descriptive also embraces the need to understand the areas in which consumer choice probabilities are synonymous with market shares as well part of the goal of description transcends what can be done by market share models alone managers need to understand that their efforts have potentially competitive effects and potentially market expansive effects in sales response models these effects are comingled but by combining descriptive market share models for the competitive effects with descriptive category volume models for the market expansive effects managers obtain a much richer understanding of the market the profit oriented goal of market share analysis urges us to ask how the firm s allocations of resources to aspects of the marketing mix produce bottom line results

performance regimes and marketing policy shifts even in mature markets managers are expected to improve their brands performance year after year when successful they can expect to continue executing on an established marketing strategy however when the results are disappointing a change or turnaround strategy may be called for to help performance get back on track in such cases performance diagnostics are needed to identify turnarounds and to quantify the role of marketing policy shifts in this process this paper proposes a framework for such a diagnosis and applies several methods to provide converging evidence for two main findings first contrary to prevailing beliefs the performance of brands in mature markets is not always stable instead brands systematically improve or deteriorate their performance outlook in clearly identifiable time windows that are relatively short compared to windows of stability second these shifts in performance regimes are associated with the brand s marketing actions and policy shifts as opposed to competitive marketing promotion oriented marketing policy shifts are particularly potent in improving a brand s performance outlook

ex ante commitments to give if you win exceed donations after a win abstract should fundraisers ask a banker to donate if he earns a bonus or wait and ask after the bonus is known standard eu theory predicts that these approaches are equivalent loss aversion and signaling models predict a larger commitment before the bonus is known theories of affect predict the reverse in five experiments incorporating lab and field elements n 1363 we solicited charitable donations from small lottery winnings varying the conditionality of donations between participants pooling across experiments participants are 23 more likely to commit to donate from the winning income and commit 25 more when asked before the lottery s outcome is determined relative to those asked to donate after they learn they have won these differences are strongly statistically significant this represents the first evidence on how pro social behavior extends to conditional commitments over uncertain income with implications for charitable fundraising giving pledges and experimental methodology

alternative indicators for predicting the probability of declining inflation evidence from the us the performance of inflation indicators for predicting the probability of inflation falling inside constant and moving targets is considered with a probit model using us data given the federal reserve system s emphasis on achieving price stability particular attention is given to the target that future inflation will be below recent inflation in contrast with earlier years the unemployment and capacity utilisation rates do not perform well in forecasting the direction of inflation in the mid and late 1990s we suggest that extending the keynesian phillips curve analysis to consider changes in labour market conditions technological advance and worker skills and openness will increase understanding of these issues

the impact of economic conditions on participation in disability programs evidence from the coal boom and bust abstract we examine the impact of the coal boom of the 1970 s and the coal bust of the 1980 s on disability program participation these shocks provide clear evidence that as the value of labor market participation increases disability program participation falls for the disability insurance program the elasticity of payments with respect to local earnings is between 0 3 and 0 4 and for supplemental security income the elasticity is between 0 4 and 0 7 consistent with a model where qualifying for disability programs is costly the relationship between economic conditions and program participation is much stronger for permanent than for transitory economic shocks

counting your customers compounding customer s in store decisions interpurchase time and repurchasing behavior abstract consumer buying decision is an important element of any company s efforts to count its customers stochastic models have been used extensively in previous studies of marketing and are usually constructed so as to easily fit the data and make predictions however the regularity of customer interpurchase time in store decisions and repeat buying behavior are not considered simultaneously in the literature since the empirical evidence suggests that all the above factors do indeed influence the firm s sales we here present a methodology which takes all these elements into account the methodology employed is illustrated by taking the customer purchase data for tea as an example by not eliminating light buyers the integrated model we developed achieves precise results and addresses the relative importance of each element while predicting firm sales

reassessing brand loyalty price sensitivity and merchandising effects on consumer brand choice this article reports the results of an empirical study of household brand choices over four scanner panel data sets the study uses a random effects autocorrelated logistic regression model the analysis presents evidence that the brand choice process is not zero order in addition the influence of in store displays and feature advertisements on switching is shown to be about two to three times more effective than estimates obtained from previous studies finally the analysis indicates systematic differences between frequent and infrequent buyers of products in terms of their sensitivity to price displays and feature advertising

the effect of employment protection and product market regulation on labour market performance substitution or complementarity this article provides new evidence on the linkages between various forms of market regulation and joblessness and its components unemployment and inactivity one crucial contribution of this article is the analysis of the interdependence across product market regulation pmr and labour markets regulation employment protection legislation epl with the help of a dynamic fixed effect model with an interaction term we estimate the marginal impact of epl and pmr at different levels of the other interacted variable to cope with problems related to the inclusion of time invariant institutional variables in fixed effect models we present results of regressions based on a new procedure specifically designed to treat slowly changing variables we build time series data to account for the annual evolution of epl and use new data for unemployment insurance net replacement rates among other results we find evidence of a positive negative effect of epl pmr on employment performance as well as of subst

labor force participation rates and the informational value of unemployment rates evidence from disaggregated us data the informational value of the aggregate us unemployment rate has recently been questioned because of a unit root in the labor force participation rate the lack of mean reversion implies that long

does welfare inhibit success the long term effects of removing low income youth from the disability rolls i estimate the effects of removing low income youth with disabilities from supplemental security income ssi on their earnings and income in adulthood using a regression discontinuity design based on a 1996 policy change in age 18 medical reviews i find that youth who are removed from ssi at age 18 recover one third of the lost ssi cash income in earnings ssi youth who are removed and stay off ssi earn on average 4 400 annually and they lose 76 000 in present discounted observed income over the 16 years following removal relative to those who do not receive a review jel i30 i38 j14 supporters of welfare programs defend them as vital lifelines for those who face barriers to work while critics charge that these programs create perverse incentives to qualify and perpetuate dependency encapsulating this debate is the controversy over the us supplemental security income ssi program a program that provides cash payments and medicaid eligibility to low income children and adults with disabilities and the aged elderly after three decades of rapid expansion ssi is now the largest nonwork based cash welfare program in the united states paying about 50 billion each year to 8 million recipients including 1 3 million children 1 ssi has been singled out by policymakers and the media for potential perverse incentives

transaction costs the opportunity cost of time and procrastination in charitable giving abstract we conduct a laboratory experiment to study whether giving people more time to donate to charity reduces donations people may intend to donate but because of the transaction costs of doing so postpone making the payment until they are less busy and having postponed making the donation once keep postponing we conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high we find evidence of a transaction cost reducing donations with the size of this effect depending on the opportunity cost of time but no statistically significant evidence that giving people more time to donate increases procrastination and thus reduces donations

the impact of stricter criteria for disability insurance on labor force participation this paper studies the effect of a large scale policy change in the austrian disability insurance program which tightened eligibility criteria for men above a certain age using administrative data on the universe of austrian private sector employees the results of difference in difference regressions suggest a substantial and statistically significant decline in disability enrollment of 6 to 7 4 percentage points and an increase in employment of 1 6 to 3 4 percentage points the policy change had important spillover effects into the unemployment and sickness insurance program specifically the share of individuals receiving unemployment benefits increased by 3 5 to 3 9 percentage points and the share receiving sickness insurance benefits by roughly 0 7 percentage points

human capital investment inequality and economic growth we treat rising inequality as an equilibrium outcome in which human capital investment fails to keep pace with rising demand for skills investment affects skill supply and prices on three margins the type of human capital in which to invest how much to acquire and the intensity of use the latter two represent the intensive margins of human capital acquisition and utilization these choices are substitutes for the creation of new skilled workers yet they are complementary with each other magnifying inequality when skill biased technical change drives economic growth greater inequality reduces growth

how social security and medicare affect retirement behavior in a world of incomplete markets this paper provides an empirical analysis of how the u s social security and medicare insurance system affect the labor supply of older males in the presence of incomplete markets for loans annuities and health insurance we estimate a detailed dynamic programming dp model of the joint labor supply and social security acceptance decision focusing on a sample of males in the low to middle income brackets whose only pension is social security the dp model delivers a rich set of predictions about the dynamics of retirement behavior and comparisons of actual vs predicted behavior show that the dp model is able to account for wide variety of phenomena observed in the data including the pronounced peaks in the distribution of retirement ages at 62 and 65 the ages of early and normal eligibility for social security benefits respectively we identify a significant fraction of health insurance constrained individuals who have no form of retiree health insurance other than medicare and who can only obtain fairly priced private health insurance via their employer s group health plan the combination of significant individual risk aversion and a long tailed pareto distribution of health care expenditures implies that there is a significant security value for these individuals to remain employed until they are eligible for medicare coverage at age 65 overall our model suggests that a number of heretofore puzzling aspects of retirement behavior can be viewed as artifacts of particular details of the social security rules whose incentive effects are especially strong for lower income individuals and those who do not have access to fairly priced loans annuities and health insurance

a model of balanced choice behavior in some product categories consumers appear to alternate among items in a consistent and purposeful though not entirely deterministic fashion such alternation occurs even in the absence of any apparent external influences on choice to explain such balanced choice behavior we present a model based upon the premise that past consumption influences the utility of items on subsequent choice occasions individuals may seek variety on certain product attributes and exhibit loyalty toward others the model specification yields a logit choice model which may be calibrated using consumption diary panel data at the individual or cross sectional level

the effects of expanding the generosity of the statutory sickness insurance system summary this article evaluates an expansion of employer mandated sick leave from 80 to 100 of forgone gross wages in germany we employ and compare parametric difference in difference did matching did and mixed approaches overall workplace absences increased by at least 10 or 1 day per worker per year we show that taking partial compliance into account increases coefficient estimates further heterogeneity in response behavior was of great importance there is no evidence that the increase in sick leave improved employee health a finding that supports a shirking explanation finally we provide evidence on potential labor market adjustments to the reform copyright 2013 john wiley sons ltd

employment and hours of work abstract this paper develops a dynamic model of the labor market in which the degree of substitution between employment and hours of work is determined as part of a search equilibrium each firm chooses its demand for working hours and number of vacancies and the earnings profile is determined by nash bargaining the earnings profile is generally nonlinear in hours of work and defines the trade off between employment and hours of work concave production technology induces firms to overemploy and as a result hours of work are below their optimal level the hosios condition is not sufficient for efficiency when there are two industries workers employed by firms with higher recruitment costs work longer and earn more that is good jobs require longer hours of work interestingly technology differentials cannot account for working hours differentials