investment and coordination in oligopolistic industries we examine investment by firms in 24 chemical product industries to determine whether firms invest preemptively to achieve persistent increases in market share or whether there is evidence of behavior to maintain market share the data indicate that investment reduces the probability that rival firms will expand capacity but the effect is temporary large firms tend to maintain market share while smaller firms tend to invest simultaneously with rivals the role of preemptive investment is limited to that of permitting a firm to invest with a lower probability of redundant investment by rivals preemption does not allow a persistent increase in market share but instead acts as a means by which firms may coordinate capacity investment to help avoid episodes of industry overcapacity

multivariate count data regression models with individual panel data from an on site sample the purpose of this paper is to consider the problem of controlling for on site sampling in the context of a system or panel of demand equations specifically in the context of recreation demand we are concerned with the situation in which survey respondents are asked to provide information not only about the actual trips to a specific site observed behavior but also their anticipated trips either under current conditions or given price and quality changes a multivariate poisson log normal mpln model and a seemingly unrelated negative binomial sunb model are used to jointly model the observed and contingent behavior data and to correct for on site sampling

sticky prices and monetary policy evidence from disaggregated us data this paper disentangles fluctuations in disaggregated prices due to macroeconomic and sectoral conditions using a factor augmented vector autoregression estimated on a large data set on the basis of this estimation we establish eight facts 1 macroeconomic shocks explain only about 15 of sectoral inflation fluctuations 2 the persistence of sectoral inflation is driven by macroeconomic factors 3 while disaggregated prices respond quickly to sector specific shocks their responses to aggregate shocks are small on impact and larger thereafter 4 most prices respond with a significant delay to identified monetary policy shocks and show little evidence of a price puzzle contrary to existing studies based on traditional vars 5 categories in which consumer prices fall the most following a monetary policy shock tend to be those in which quantities consumed fall the least 6 the observed dispersion in the reaction of producer prices is relatively well explained by the degree of market power 7 prices in sectors with volatile idiosyncratic shocks react rapidly to aggregate monetary policy shocks 8 the sector specific components of prices and quantities move in opposite directions

optimal control of a dual service rate m m 1 production inventory model we analyse a dual source production inventory model in which the processing times at a primary manufacturing resource and a second contingent resource are exponentially distributed we interpret the contingent source to be a subcontractor although it could also be overtime production we treat the inventory and contingent sourcing policies as decision variables in an analytical study and additionally allow the primary manufacturing capacity to be a decision variable in a subsequent numerical study our goal is to gain insight into the use of subcontracting as a contingent source of goods and whether it can fulfill real world managers expectations for improved performance we prove that a stationary non randomised inventory and subcontracting policy is optimal for our m m 1 dual source model and moreover that a dual base stock policy is optimal we then derive an exact closed form expression for one of the optimal base stocks which to our knowledge is the first closed form solution for a dual source model we use that closed form result to advantage in a numerical study from which we gain insight into how optimal capacity subcontracting and inventory policies are set and how effectively a contingent source can reduce total cost capacity cost and inventory cost we find that i the contingent source can reduce total cost effectively even when contingent sourcing is expensive and ii contingent sourcing reduces capacity cost more effectively than it does inventory cost

a panel travel cost model accounting for endogenous stratification and truncation a latent class approach in this paper we develop a panel data negative binomial count model that corrects for endogenous stratification and truncation we also incorporate a latent class structure into our panel specification which assumes that the observations are drawn from a finite number of segments where the distributions differ in the intercept and the coefficients of the explanatory variables the paper argues that count data panel models corrected for on site sampling may still be inadequate and potentially misleading if the population of interest is heterogeneous with respect to the impact of the chosen explanatory variables jel q51 q57

testing the validity of contingent behavior trip responses while a number of validity tests exist for contingent valuation data to date there are very few literature examples for contingent behavior cb data the objective of this study is to test the validity of cb trip data for different levels of rock climbing access using data from surveys implemented before and after a policy restricting recreational access was imposed results from generalized negative binomial and seemingly unrelated poisson regression models show significant sensitivity to scope and suggest that cb data may be a valuable supplement to revealed preference data when policy proposals are outside the range of historical conditions copyright 2002 oxford university press

investigation of stated and revealed preferences for an elk hunting raffle the charter forest experiment at the valles caldera national preserve vcnp in new mexico provides land managers policymakers and researchers a unique opportunity to examine an alternative public land management institution the vcnp mature bull elk permit lottery has been the largest revenue generating recreation program at the preserve since the program s inception in 2002 this paper uses stated and revealed preference ticket purchase data collected through an online survey to estimate a set of ticket demand equations for the purpose of assessing revenue generation access and the willingness to donate to this program

estimating the demand for a new technology bt cotton and insecticide policies this article examines the potential demand for bt cotton in the southeast from information gathered in the first year of commercialization we combine revealed preference rp data on adoption of bt cotton varieties with stated preference sp data on willingness to adopt to estimate demand using a double bounded maximum likelihood procedure using estimated demand equations we simulate the costs of reducing conventional insecticide applications through subsidization of bt cotton results indicate that reducing cotton insecticide applications by 40 in the southeast would require a 21 acre subsidy with total annual program costs between 53 million and 60 million

combining contingent valuation and travel cost data for the valuation of non market goods the travel cost method tcm has long been used to infer the economic value of nonmarket resources and public goods more recently contingent valuation cvm survey methods have gained popularity for eliciting these values here cvm survey responses are combined with tcm data on actual market behavior to estimate jointly both the parameters of the underlying utility function and its corresponding ordinary demand function this is a prototypical empirical example of a new modeling strategy variants of which should prove useful in many applications especially where reliance on a single valuation method is undesirable

policy evaluation with combined actual and contingent response data the city of marietta georgia experimentally switched from flat fee financing to volume based pricing for its trash services in january 1994 both before and during the experiment detailed data on individuals observed responses to the actual introduction and contingent behavioral responses to a hypothetical introduction of volume based pricing were collected this study applies these data and investigates the methodology of collecting contingent behavior data and their use in policy analysis in particular this study empirically evaluates the effect of experience with the policy on responses to contingent behavior questions and tests for potential bias in the contingent behavior data

excess capacity as a barrier to entry an empirical appraisal this paper examines excess capacity barriers to entry and investment dynamics in a sample of thirty eight chemical product industries logit and log linear models of investment behavior are estimated and specific case examples are considered the results show that incumbents rarely built excess capacity pre emptively in an effort to deter entry in general entrants and incumbents exhibited similar investment behavior

the individual travel cost method with consumer specific values of travel time savings the treatment of the opportunity cost of travel time in travel cost models has been an area of research interest for many decades our analysis develops a methodology to combine the travel distance and travel time data with respondent specific estimates of the value of travel time savings vtts the individual vtts are elicited with the use of discrete choice stated preference methods the travel time valuation procedure is integrated into the travel cost valuation exercise to create a two equation structural model of site valuation since the travel time equation of the structural model incorporates individual preference heterogeneity the full structure model provides a travel cost site demand model based upon individualized values of time the methodology is illustrated in a study of recreational birdwatching more specifically visits to a stork village in poland we show that the usual practice of basing respondents vtts on 1 3 of their wage rate is largely unfounded and propose alternatives including a separate component of the travel cost survey aimed at valuation of respondents vtts or as a second best asking if they wish if their journey was shorter and for those who do use full hourly wage as an indicator of their vtts

re evaluating the income elasticity of the property tax base an important research issue relating to the property tax is its income elasticity income elasticities provide a potentially cost effective means to forecast local government revenues and in policy analysis they are used to judge the tax s behavior over business cycles its stability and capacity to generate necessary growth in revenues its adequacy while previous income elasticity estimates have been derived from simple log linear models this paper focuses on the residential component of the property tax base and develops and estimates a nonlinear structural model of residential property valuation in further contrast to previous studies which have relied on national or state

multinational investment under uncertainty in the chemical processing industries this study uses a sample of chemical processing industries to evaluate the effect of two types of uncertainty on the decision to invest in an industry it analyzes the effects of relative price uncertainty through exchange rates and input prices and demand uncertainty on the probability of expansion in a particular country the study then focuses on the behavior of individual companies and distinguishes companies by whether or not they are multinationals in the production of the product the results confirm previous evidence that exchange rate uncertainty has a negative effect on capacity expansions by domestic corporations and no effect on investment by multinational corporations finally the study also shows that expansions of production capacity in this industry are more likely to occur in those countries where capacity utilization is higher

the myth of financial innovation and the great moderation financial innovation is widely believed to be at least partly responsible for the recent financial crisis at the same time there are empirical and theoretical arguments that support the view that changes in financial markets in particular innovations in consumer credit and home mortgages played a role in the great moderation this article questions empirical evidence supporting this view especially the behaviour of aggregate home mortgages changed less during the great moderation than is typically believed a remarkable change we do find is that monetary tightenings became episodes during which financial institutions other than banks increased their mortgages holdings

convergent validity and the time consistency of preferences evidence from the iowa lakes recreation demand project we examine the consistency of preferences over time and as implied by revealed versus stated preference contingent behavior data studies in this area are typically based upon a single site and focus on consumer response to changes in travel cost or site access we use data from the iowa lakes project which provides information on usage patterns over several years and for 132 lakes along with detailed water quality data this allows us to test for convergence in how individuals respond to changing site characteristics as well as the consistency of preferences over time and between actual versus contingent trips

menu costs and phillips curves this paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation sellers can change price only by incurring a real menu cost we calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new u s data set of individual prices due to klenow and kryvtsov the prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with international evidence from various studies the model is also used to conduct numerical experiments on the economy s response to various shocks in none of the simulations we conducted did monetary shocks induce large or persistent real responses

a theory of growth and volatility at the aggregate and firm level abstract we present an endogenous growth model that explains the evolution of the first and second moments of productivity growth at the aggregate and firm level during the post war period growth is driven by the development of both i idiosyncratic r d innovations and ii general innovations that can be freely adopted by many firms firm level volatility is affected primarily by the schumpeterian dynamics associated with the development of r d innovations the variance of aggregate productivity growth is driven by the arrival rate of general innovations ceteris paribus the share of resources spent on development of general innovations increases with the stability of the market share of the industry leader as market shares become less persistent the model predicts an endogenous shift in the allocation of resources from the development of general innovations to the development of r d innovations this results in an increase in r d an increase in firm level volatility and a decline in aggregate volatility the effect on productivity growth is ambiguous on the empirical side this paper presents new cross country evidence that r d subsidies are not significantly associated with higher growth but are associated with lower aggregate volatility it also documents an upward trend in the instability of market shares a positive association between firm volatility and r d spending and a negative association across sectors between r d and how correlated the sector is with the rest of the economy

modelling recreation demand using choice experiments climbing in scotland this paper is concerned with the use of thechoice experiment method for modelling thedemand for recreation using the example ofrock climbing in scotland we begin byoutlining the method itself including itstheoretical and econometric underpinnings datacollection procedures are then outlined wepresent results from both nested and non nestedmodels and report some tests for theimplications of choice complexity andrationality finally we compare our resultswith a revealed preference data model based onthe same sample of climbers

impact of plant size and focus on productivity an empirical study recent popular business literature has suggested that there is a significant trend in the united states for firms to decrease the size and increase the focus of manufacturing plants they operate and that this leads to higher productivity this paper tests empirically the validity of these claims we analyze data on virtually the entire population of manufacturing plants in the united states and find that contrary to the popular business literature the average size of plants increased during the period 1972 1984 however consistent with the popular notion the rate of growth in plant size slowed considerably and even turned negative for a category of large plants plant focus did increase during this period we then investigate the relationship between productivity and plant characteristics including plant size and plant focus overall our results do not support the popular argument that reduction in plant size results in productivity gains however we do find support for this argument in some two digit sic industries also scale economies in the entire population decreased over the period 1972 1982 we also find only limited support for the popular argument that plant focus increases productivity

market growth economies of scale and plant size in the chemical processing industries what factors determine the size of new industrial plants this study uses data on twenty tw o chemical products to test alternative models of capacity expansion including the manne model and a scale frontier model the empiri cal results strongly support the scale frontier model the size of n ew plants increased along a time trend that was unrelated to market c oncentration market growth or the magnitude of investment scale eco nomies entrants typically built smaller plants than incumbents but all firms built plants closer to the technological frontier when smal l plants carried a higher relative cost penalty copyright 1987 by blackwell publishing ltd

omitted cross price variable biases in the linear travel cost model correcting common misperceptions the essence of the travel cost method is that the combination of the number of visits to a site and the round trip travel costs for each recreationist traces out a demand relationship since the geographic location of the recreationist s residence exerts a kind of experimental control which forces the more distant consumer to bear higher travel and related costs these travel costs are used as proxies for prices in estimating demand for the site s services clawson 1959 has presented the two step method for valuing a single site s services however it has been pointed out in the literature that single and isolated recreation sites very rarely exist and the failure to include prices for alternative sites in the demand equation leads to biased estimates for the value of the resource under consideration the literature contains some misconceptions about the direction of the bias consider quotations from two frequently cited studies

a note on the welfare effects of omitting substitute prices and qualities from travel cost models the bias to welfare estimates from omitting substitute prices or qualities in travel cost models is examined the presence of bias depends on whether single or multiple site changes are examined and the degree of correlation between the omitted and included prices for a multiple site price or quality change even when omitted price is uncorrelated with included price welfare estimates may be biased alternatively if omitted price is perfectly correlated the welfare measure may not be biased the presence of the bias depends equally on both the degree of correlation and whether a single or multiple change occurs this abstract was borrowed from another version of this item

patents learning by doing and market structure in the chemical processing industries for a sample of 24 chemical products count data models are used to evaluate firms propensity to patent and the link between patented process innovations and output prices the results show that process patenting was largely an outgrowth of learning by doing propensity to patent increased with firm size but decreased with market concentration reductions in output prices were strongly linked to learning by doing and more weakly to the rate of patenting producer firms appear to have been more successful than non producers in appropriating the value of patented process innovations

valuing the benefits of coastal water quality improvements using contingent and real behaviour recent moves in the european union have beenmade towards a toughening of legislation onbathing water quality this has focussedpolicy makers thoughts on the welfare benefitsresulting from such improvements especiallygiven their cost our paper uses a combinedstated and revealed preference approach tovalue coastal water quality improvements focussing on an area of scotland which hasconsistently failed to meet standards under thebathing waters directive we combine data onreal behaviour with data on contingentbehaviour using a random effects negativebinomial panel model this allows us to predictboth the change in participation trips shouldwater quality be improved and the welfareincrease per trip our model includes allowancefor the existence of substitute sites and forchanges in recreational behaviour during abeach visit

augmenting travel cost models with contingent behavior data this paper proposes contingent behavior survey questions as a valuable supplement to observed data in travel cost models of non market demand for recreational resources a set of observed and contingent behavior results for each survey respondent allows the researcher to control for individual heterogeneity by taking advantage of panel data methods when exploring the nature of respondent demands the contingent scenarios also provide opportunities to a test for differences between observed and contingent preferences and or b assess likely demands under conditionsbeyond the domain of observed variation in costs or resource attributes most importantly contingent scenarios allow the researcher to imposeexogenously varying travel costs exogenous imposition of travel costs together with panel methods reduces the omitted variables bias that plagues observed data travel cost models of recreational demand using a convenience sample of data for illustrative purposes we show how to estimate the demand for recreational angling by combining observed and contingent behavior data we begin with simple naive pooled poisson models and progress to more theoretically appropriate fixed effects panel poisson specifications

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

capacity utilization theoretical models and empirical tests abstract this paper examines the determinants of industry capacity utilization in 40 chemical product industries over a period of roughly two decades a series of testable hypotheses are developed based on three operations research models of capacity expansion the manne model the newsboy model and the whitt luss model the hypotheses are tested on the chemical industries sample using multiple regression analysis the empirical results are consistent with most predictions derived from the newsboy and whitt luss models which suggests that firms made expansion decisions in a manner roughly in accordance with these models capacity utilization was positively related to capital intensity and the trend rate of demand growth and was negatively related to demand variability geographic plant dispersion and plant lumpiness the magnitude of investment scale economies and the extent of multi plant operation had little effect on capacity utilization

time is money improved valuation of time and transportation costs the proper valuation of time isimportant for estimating the demand for severaleconomic goods this paper explores the propervaluation of time when estimating recreationaldemand where time costs represent asubstantial portion of the purchase price toestimate demand this paper uses a travel costframework to analyze actual behavior revealedpreference data and hypothetical behavior stated preference data which is induced byhypothetical increases in access fees traveltime and travel distance by comparing theresponses to these three contingencies theanalysis adjusts and improves the valuation oftime costs as evidence of this improvement this analysis demonstrates a great increase inthe consistency between the revealed and stateddata similarly this paper improves thevaluation of transportation related costs

the time varying volatility of macroeconomic fluctuations we investigate the sources of the important shifts in the volatility of us mac roeconomic variables in the postwar period to this end we propose the esti mation of dsge models allowing for time variation in the volatility of the structural innovations we apply our estimation strategy to a large scale model of the business cycle and find that shocks specific to the equilibrium condition of investment account for most of the sharp decline in volatility of the last two decades jel c51 e32

diverging trends in aggregate and firm volatility this note documents the diverging trends in volatility of the growth rate of sales at the aggregate and firm levels we establish that the upward trend in firm volatility is not simply driven by a compositional bias in the sample studied we argue that this new fact brings into question the proposed explanations for the decline in aggregate volatility and that given the symmetry of the diverging trends at the micro and macro levels a common explanation is likely we conclude by describing one such theory

what makes the output inflation trade off change the absence of accelerating deflation in japan it is standard to model the output inflation trade off as a linear relationship with a time invariant slope we assess empirical evidence for two sets of theories that allow for endogenous variation in the slope of the short run phillips curve at an empirical level we examine why large negative output gaps in japan in the late 1990s did not lead to accelerating deflation but instead coincided with stable albeit moderately negative inflation our results suggest that this episode is most convincingly interpreted as reflecting a gradual flattening of the phillips curve we find that this flattening is best explained by models with endogenous price durations these models imply that in any economy where trend inflation is substantially lower or substantially higher today than in past decades time variation in the slope of the phillips curve has become too important to ignore

adopt a hypothetical pup a count data approach to the valuation of wildlife the willingness to pay wtp for a coyote conservation program is estimated using a novel payment vehicle based on how many problem coyotes respondents would be willing to sponsor for a year this hypothetical scenario mimics an increasingly popular type of actual market data from a phone survey conducted in prince edward island are analyzed using count data models that consider different processes explaining zero responses and the level of positive responses this is particularly important in the case of coyotes often regarded as an economic bad estimates of wtp per coyote per year around 18 22 and annual wtp per contributor of about 46 57 are obtained

an extension of omitted cross price variable biases in the linear travel cost model correcting common misperceptions caulkins bishop and bouwes cbb 1985 raise an important issue concerning the conventional presumption of positive bias in consumer surplus when alternative sites are ignored in the travel cost method treatment of site value dwyer kelly and bowes 1977 they analyze a significant geographic dispersion phenomenon which can cause either negative or positive bias in travel cost model tcm estimates of site value when travel costs to alternative sites are omitted however the derivation of specification bias in the tcm which they provide is incomplete and could lead to generalizations which are erroneous cbb use the well known specification bias analysis to discuss the possible effects of ignoring alternative recreation sites in the tcm demand analysis given the estimated linear regression equation

the economics of household solid waste generation and disposal abstract we develop a household production model of waste management that explicitly incorporates many of the technical and behavioral elements germane to current regulatory and non regulatory solid waste policy initiatives examination of first order conditions shows the interaction among household preferences these production options and external prices and fees a simplified simulation of our model illustrates these relationships showing that household response elasticities can vary widely over common price ranges and that relatively large household welfare gains may be obtained by adopting curbside recycling and unit pricing programs

valuing water level changes in reservoirs using two stated preference approaches an exploration of validity the combination of travel cost tcm and contingent behaviour cb methods is a relatively new research avenue in the recreational valuation community contrary to simple tcm applications tcm cb facilitates the ex ante valuation of marginal welfare effects resulting from environmental quality or quantity changes similar to the contingent valuation method cv even though tcm cb is highly policy relevant i e to inform changes in management regimes at recreational sites the validity of estimates has hardly received any attention and little is known about the performance of tcm cb compared to cv in this paper tcm cb and cv are explored with respect to several validity tests in a case study on the recreational effects of water level changes in a reservoir overall the findings reveal that tcm cb and cv perform equally well in terms of theoretical validity but that the marginal recreational value varies significantly between the two methods we also observe that both methods face similar internal difficulties with respect to the stability of values when the order of a set of valuation questions is changed

consistency in mixed demand systems contingent valuation and travel cost data in contrast to previous literature we propose a consistency test that does not impose any particular common functional form for the preference structure underlying the travel cost tc and contingent valuation cv models we derive testable consistency conditions between tc and cv data in the context of mixed demand systems when valuing changes in environmental quality these conditions are a subset of the rationality conditions the proposed consistency tests are implemented combining tc and cv data the empirical results show that it is possible to combine stated tc and cv but not revealed tc and cv data

price adjustments in a general model of state dependent pricing we study the distribution of retail price adjustments under the assumption that firms are more likely to adjust their prices when doing so is more valuable our setup nests calvo 1983 at one extreme and a fixed menu cost model at the other all parameterizations are ranked by a measure of state dependence high state dependence implies counterfactually that there are no small price changes and that the variance of price changes falls sharply with trend inflation the parameterization that best fits microdata has low state dependence implying a phillips curve coefficient 60 as large as that of the calvo model but is nonetheless well behaved at high inflation rates

irreversible investments and volatile markets a study of the chemical processing industry this paper investigates the empirical effect of volatility on irreversible investments we use a sample of chemical products in the united states and the european union to test the impact of volatility on new investments in capacity we distinguish among three sources of volatility exchange rates input prices and product demand we find that the effects of volatility on the amount of capacity investment differ depending on the source of volatility input prices and product demand volatility do not appear to have a material and statistically significant effect in either the united states or the european union in contrast exchange rate volatility has a significant negative impact on investment by chemical manufacturers in the european union

using count data models in travel cost analysis with aggregate data estimators of recreational demand models frequently use continuous functional forms such as ordinary least squares ols on log transformed variables e g ziemer musser and hill however the nature of trip demand introduces complicating factors first trips occur in nonnegative quantities failure to control for this censoring will lead to biased estimation second because trips are available only in integer quantities the usual demand models which correlate marginal quantity with marginal price may be inapplicable in light of these factors a natural alternative is to use statistical models that explicitly recognize the count nature of trip demand several recent papers e g shaw smith grogger and carson creel and loomis have applied count models to the travel cost model these works largely have focused on truncated data sets based on choice based samples in this study the focus is on the older problem where zero demanders are included in particular the application of several robust estimators of count models to aggregated data will be considered the poisson distribution forms the foundation for the count models examined in this study although the poisson is a convenient distribution to work with it imposes some stringent constraints on the demand distribution in particular the poisson distribution assumes the variance of trip demand is equal to the expected value of trip demand to loosen these constraints a generalization of the poisson the negative binomial is discussed robust estimation procedures that permit further loosening of a priori assumptions are then reviewed permit data from the boundary waters canoe area are used to examine the effects of these count models on consumer surplus estimates and on coefficient variability

the effects of variable omission in the travel cost technique the travel cost technique is probably the most widely used method for estimating outdoor recreation demand functions consequently problems of specification have attracted much attention specification errors due to the omission of travel time and congestion effects have received the most recent attention with the consensus being that the travel cost technique underestimates the true value of recreational resources if these variables are omitted gum and martin 1975 wetzel 1977 mcconnell and duff 1976 yet the effect of variable omission is likely to vary depending upon the type of activity the existence of substitutes and related factors for this reason we reexamine from both an empirical and theoretical perspective the magnitude and nature of potential specification errors due to variable omission

willingness to pay for quality improvements should revealed and stated preference data be combined abstract in this article we propose theoretically consistent welfare measurement of use and nonuse values for an improvement in environmental quality with revealed and stated preference data an analytical model based on the comparative static analysis of the variation function that describes the relationship between recreation demand and dichotomous choice contingent valuation models is estimated our results show that revealed and stated data should not be combined under the same assumed preference structure unless the two decisions imply the same change in behavior induced by the quality change in addition our results indicate scope effects in willingness to pay measures estimated with stated preference data

international evidence on a new keynesian theory of the output inflation trade off this article provides empirical evidence on the validity of a new keynesian theory of the output inflation tradeoff the theory offered by laurence ball n gregory mankiw and david romer 1988 synthesizes recent work on menu costs and imperfect competition used to ground keynesian theory in maximizing behavior the present paper focuses on a key prediction namely that higher average inflation makes output less sensitive to nominal shocks that proposition is tested using data for each of forty three countries importantly average inflation is found to have the predicted effect in a significant fraction of those countries an outcome which supports the new keynesian view copyright 1991 by ohio state university press

a difficulty with the travel cost method instead of observable prices of recreational visits travel cost method tcm re searchers are obliged to substitute researcher assigned visitation cost estimates i argue that visitation costs are inherently subjective but are ordinally measurable so long as the cost in creases with distance travelled it follows that traditional tcm yields only ordinally measur able welfare estimates the household produc tion function formulation of tcm resolves this problem only by imposing severe and un testable analytical restrictions tcm cannot serve as a stand alone technique for estimating recreation benefits rather it must be calibrated using information generated with fundamentally different methods jel q26

convergent validity of revealed and stated recreation behavior with quality change a comparison of multiple and single site demands we consider the convergent validity of several demand models using beach recreation data two models employ multiple site data a count data demand system model and the kuhn tucker demand system model we explore the role of existing variation in beach width in explaining trip choices and analyze a hypothetical 100 foot increase in beach width we compare these models to a single equation model where we jointly estimate revealed and stated preference trip data and focus on a hypothetical scenario considering a 100 foot increase in beach width in each case we develop estimates of the change in beach visits and the welfare impacts from the increase in width the trip change estimates from two of the three models are similar and convergent valid though the willingness to pay estimates differ in magnitude

cross sectoral variation in the volatility of plant level idiosyncratic shocks the volatility of plant level idiosyncratic shocks we estimate the volatility of plant level idiosyncratic shocks in u s manufacturing we measure the variation in revenue total factor productivity not explained by either industry or economy wide factors or by establishments characteristics we find that idiosyncratic shocks are much larger than aggregate shocks accounting for about 80 of the overall uncertainty faced by plants plants in the most volatile sector are subject to about six times as much idiosyncratic uncertainty as plants in the least volatile we provide evidence suggesting that idiosyncratic risk is higher in industries where the extent of creative destruction is likely to be greater

welfare costs of inflation in a menu cost model recent years have seen substantial prog ress in our understanding of pricing decisions at the micro level access to large scale data sources on prices of individual products has given us rich information on how frequently prices change by what magnitude and how the aggregation of price changes in individual firms maps into aggregate inflation see among many others mark bils and peter j klenow 2005 these facts about price movements are a key input in recent quantitative models of the aggre gate effects of nominal rigidities e g mikhail golosov and robert e lucas 2007 in this paper we use both the new facts and the new quantitative models to revisit an old question namely that of quantifying the welfare benefits of low inflation our model includes two

cyclical changes in firm volatility we estimate changes in the volatility of firm level sales earnings and employment growth of us firms our method differs from existing measures for firm level sales and employment volatility in that it not only captures longer run changes in volatility but also measures cyclical changes in firm volatility we detect substantial cyclical variation in firm specific volatility around trend firm specific volatility was low in the early 1990s rose in the mid and late 1990s and was high around 2000 our results are consistent with the hypothesis deduced from models with financial frictions that rising idiosyncratic volatility before 2001 contributed to the coincident rise in the external finance premium and to the 2001 recession endogenous pricing models imply that price adjustment is less frequent and disinflation more costly when firm specific volatility is low consistent with endogenous pricing models we find that the output cost of disinflation was three times larger in the early 1990s than in the early 2000s