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This paper develops a Schumpeterian growth model with considering consumption and leisure externalities. The main purpose of this study is to investigate the effect of patent protection policy on growth and inequality, as well as the interaction between policy effect and externalities. According to the log form utility function specification, this means that the elasticity of intertemporal substitution is unity. The following are the key findings of this paper. Patent protection policy encourages innovation and increases employment in the R&D industry, which enhances economic growth while increasing income inequality. In regard to externalities, an increase in the degree of consumption (leisure) externalities results in a higher (lower) growth rate and more (smaller) income inequality. When consumption (leisure) externality is greater intensity, the growth effect of patent protection policy becomes stronger (weaker), while its influence on expanding income inequality lessens (enhances). Finally, both the Pareto optimal patent protection policy and the optimal patent policy under the maximization of social welfare positively correlate with consumption externalities, but negatively correlate with leisure externalities. [ABSTRACT FROM AUTHOR]

This paper examines the environmental, social, and governance (ESG) requirements for an industry in an n‐oligopolistic model and investigates the relationship between the degree of industry concentration and the degree of ESG requirements. It is shown that the factors influencing the degree of ESG requirements include the number of firms, the elasticity of market demand, and the market concentration ratio. In the case of linear market demand, the degree of requirements is negatively affected by firm number only, regardless of the elasticity of market demand or market concentration ratio. In addition, the degree of ESG requirements is positively (negatively) related to the industry profit/concentration, when market demand is convex (concave). This paper demonstrates that the degree of ESG requirements is sensitive to firm number, market demand, and market concentration ratio and serves as a pragmatic reference for the government. [ABSTRACT FROM AUTHOR]

Introduction: Evidence shows that price is an important policy lever in reducing consumption of alcohol and tobacco. However, there is little evidence of the cross‐price effect between alcohol and tobacco. Methods: This paper uses an econometric model which estimates participation and consumption elasticities, on data from the UK Living Costs and Food Survey 2006–2017 and extends the literature by, for the first time, estimating joint price elasticities for disaggregated alcohol and tobacco products. This paper presents new price elasticities and compares them to the existing literature. Results: The own‐price elasticity estimates are all negative for both participation and consumption. There is no pattern to the estimates of cross‐price elasticities. The elasticity estimates, when used in the Sheffield Tobacco and Alcohol Policy Model, produce bigger changes in consumption for the same change in price compared to other elasticity estimates in the existing literature. Discussion and Conclusions: Consumption of alcohol and tobacco are affected by the prices of one another. Policymakers should bear this in mind when devising alcohol or tobacco pricing policies. [ABSTRACT FROM AUTHOR]

Summary: This paper develops a maximum likelihood (ML) bunching estimator of the elasticity of taxable income (ETI). Our structural approach provides a natural framework to simultaneously account for unobserved preference heterogeneity and optimization errors and for measuring their relative importance. We characterize the conditions under which the parameters of the model are identified and show that the ML estimator performs well in terms of bias and precision. The paper also contains an empirical application using Swedish data, showing that both the ETI and the standard deviation of the optimization friction are precisely estimated, albeit relatively small. [ABSTRACT FROM AUTHOR]

The elicitation of the elasticity of intertemporal substitution (EIS), discount factor and risk attitude parameters in dynamic models is of central importance to economics, finance and public policy. This paper suggests an alternative method to jointly elicit and estimate these three parameters using experimental data. We employ a new model based on dynamic quantile preferences, where individuals maximize the stream of future τ‐quantile utilities, for τ∈0,1. These preferences are simple, dynamically consistent and monotonic. In the quantile model, the risk attitude is captured by the quantile τ of the payoff distribution, while the EIS and the discount factor are related to the utility function describing individual's intertemporal behaviour, hence allowing for complete separability between risk, EIS and discount factor. The estimation of the parameters of interest uses a structural maximum likelihood method. Individual's risk aversion is estimated below the median. The discount factor is marginally smaller than estimates reported in the literature, and the EIS is slightly larger than one, which suggests that utility over time is concave. The estimates for the elasticity contrast with those reported by the existing studies using observational disaggregated data, which in general find an elasticity smaller than one. [ABSTRACT FROM AUTHOR]

Summary: China's labor share has declined since late 1990s. Using the methodology developed by Oberfield and Raval, this paper estimates China's aggregate capital‐labor elasticity of substitution, leveraging the estimated micro‐level elasticities. The findings indicate that China's aggregate capital‐labor elasticity falls within the range of 0.9 to 1. Utilizing this estimated aggregate elasticity for labor share decomposition, we find that the bias of technical change emerges as the predominant factor driving the decline in labor share. [ABSTRACT FROM AUTHOR]

This paper studies the effect of factor substitution on long‐run growth and the convergence speed in the one‐sector endogenous‐growth model. We consider a general production function that encompasses the most commonly used specifications as particular cases. For two economies with the same initial conditions and parameter values, including the baseline elasticity of substitution (EOS), the one with the higher asymptotic EOS has the higher long‐run growth and convergence speed. If the asymptotic EOS is a nondecreasing function of its baseline value, an increase in the baseline EOS entails a higher long‐run growth and convergence speed. [ABSTRACT FROM AUTHOR]

This paper analyzed farmers' willingness to accept (WTA) payment and uncertainties toward carbon market through a 2021 U.S. Midwest farmer survey. The findings showed that farmer carbon supply was elastic at intermediate prices ($20–50/Mg), but inelastic at low ($10–20/Mg) and high ($50–70/Mg) price levels. While perceived co‐benefits play significant roles in promoting participation at low‐price levels, variables such as age, education, farm size, and soil quality are more likely to influence producers' choices at intermediate‐ and high‐price levels. To enhance farmers' support for carbon programs, measures should be taken to improve benefit, while reducing cost and uncertainty. [ABSTRACT FROM AUTHOR]

Bilateral trade relationships between countries vary across products. Such heterogeneity poses challenges when assessing the economic impacts of trade agreements. This paper estimates bilateral trade elasticities at the product level and explores these impacts using a hypothetical no‐deal Brexit as an example. Our findings indicate that the European Union's demand for the United Kingdom products is often less elastic compared to products from other trading partners. We also observed substantial heterogeneity in the elasticities across products and a negative correlation between these elasticities and tariffs. These factors mitigate extent of trade welfare losses compared to a scenario using homogeneous elasticities. [ABSTRACT FROM AUTHOR]

The wage elasticity to corporate income tax (CIT) is an essential parameter for assessing tax policy reforms. This paper applies meta‐regression analysis to quantitatively review the growing empirical tax incidence literature that indicates a substantial shift of the tax burden onto employees. While most studies report a large wage‐reducing effect of the CIT, our findings suggest that estimates with positive values are published less often than they should. After accounting for the bias, we find no significant average association between wage rates and corporate taxation. We document that the tax variable, econometric method, type of tax variation, and underlying time and country coverage of studies drive the heterogeneity among reported effects. The implied best‐practice estimates suggest that the tax elasticity of wages is systematically larger for emerging countries and smaller when tax changes at the subnational level are exploited. [ABSTRACT FROM AUTHOR]

This paper provides a theoretical framework and empirical support for an examination of corporate financial performance (CFP) from the perspective of an effect that is analogous to corporate social responsibility (CSR) advertising. We propose that not all companies are capable of "doing well by doing good." Through an analytic model, we identify three key elements for determining a company's CSR advertising‐analogous effect on CFP: the incremental margin (gross profit rate), the sales–CSR elasticity and sales demand in the market (market share). By re‐examining the equivocal relationship between CSR and CFP based on a sample of publicly held US companies from 1991 to 2018, we document that companies in the best position to undertake CSR activities (with gross profit rates, sales–CSR elasticities and market shares above the industry medians) have a superior advertising‐analogous effect to other companies. Moreover, our empirical results show that companies in the best position to undertake CSR activities face less severe agency problems when they conduct more CSR activities than other companies. Finally, in a test of whether regular advertising expenditures and CSR devotion could jointly enhance current CFP, the results show that the positive joint effect is more pronounced for companies in the best position to undertake CSR activities than for other companies. [ABSTRACT FROM AUTHOR]

This paper examines the role of a 'green' value‐added tax in the competitive environment of firms. Using data on firms in Romania and leveraging the introduction of a tax reduction on organic products in 2019, I show that although the overall market for organic goods grows and potential to generate windfall profit exists, the market share of incumbent firms decreases because of intensified competition post‐reform driven by new entrants competing for profits in the market. The market share decreases by about 2 percentage points after the reform. The effect depends on the relative elasticity of demand vis‐à‐vis supply in the market and the ability of a firm to protect its sales from new market entrants. Firms operating geographically further from the main consumer (i.e., more rural firms) and further upstream from the retail sector are more vulnerable to losing market share because urban demand is less elastic than rural demand and retail demand is less elastic than primary demand. Firms that are in markets where it is easier to switch from non‐organic to organic and that are less capital intensive (i.e., have fewer fixed costs) are more vulnerable to losing market share to new market entrants. [ABSTRACT FROM AUTHOR]

Returnable packaging systems (RPS) related to consumer products help to reduce problematic plastic and glass waste in supply chains. The purpose of this paper is to investigate distribution and return processes and the related cost drivers and benefits of returnable packaging with a deposit refund system in retail stores. Through the lens of the actor–network theory and based on 30 interviews with store managers, including on‐site observations, we develop a research model that structures key processes of RPS and their input and output factors. By subsequently applying system dynamics modeling, we find that: (1) customers' process satisfaction, (2) price elasticity of demand, and (3) time between repeat purchases are key variables that impact RPS' attractiveness and performance. This research contributes to an in‐depth understanding of processes within RPS as well as interdependencies between cost drivers and benefits for retailers. From a managerial perspective, these insights can enable retailers to take action based on the influencing factors for efficient operations related to RPS. Finally, this research has policy implications as it provides argumentation for the commercial benefits of RPS for retailers aside from the overemphasized cost perspectives. [ABSTRACT FROM AUTHOR]

This paper studies the impact of relative performance evaluation (RPE) on skilled‐unskilled wage inequality. We find that in an economy with full employment, skilled‐unskilled wage inequality will be expanded when the strength of RPE increases. However, when the urban sector is under the minimum wage restriction, the impact of RPE on skilled‐unskilled wage inequality depends on the substitution elasticity between land and unskilled labor in the rural sector. If this substitution elasticity is sufficiently large (resp. small), skilled‐unskilled wage inequality will be expanded (resp. narrowed down) when the strength of RPE rises. [ABSTRACT FROM AUTHOR]

This paper incorporates reference‐dependent preferences into a consumption‐based asset pricing model featuring Epstein–Zin utility. Three relevant results emerge from this extension. First, agents prefer the late resolution of uncertainty in recursive utility. Second, the late resolution of uncertainty helps replicate the downward‐sloping term structure of market excess return. Third, the intertemporal substitution elasticity is more sensitive to asset prices through increasing precautionary saving motivations. A closed‐form solution for the proposed model largely explains (i) high, volatile, and countercyclical equity premiums; (ii) low risk‐free rates; and (iii) the downward‐sloping term structure of equity premiums and variance ratios. [ABSTRACT FROM AUTHOR]

This paper investigates how scanner data affect demand elasticity estimates and develops methods for scientists to adapt estimated elasticities to analyses of specific policies. We conduct a meta‐analysis of U.S. demand elasticities and find evidence that scanner data generate statistically different elasticities, with more elastic demand than other data types. Own‐price elasticity estimates from household scanner quantity data appear to be more elastic than other quantity types. Household‐level estimates using retail scanner price data, as proxies for prices, tend to be more price‐elastic than other price types. These results suggest caution or adjustment when selecting elasticities for policy analysis. [ABSTRACT FROM AUTHOR]

As a core functional material in acoustic resonators and filters, the elasticity of aluminum nitride (AlN) piezoelectric thin film and its correlated intrinsic properties deserve priority attention. This paper presents an in‐depth investigation of elastic softening and stiffening effect induced by stress loading in AlN piezoelectric thin film. Based on the Born‐Lande equation, the physical mechanism of such new intrinsic elastic property is revealed and predicted quantitatively for the first time from the perspective of atomic interaction forces. It is found that a maximum 6.7% modulation range of elasticity coefficient can be achieved under ultimate stress loading conditions from (−2.5, −2.5) to (2.5, 2.5) GPa. © 2023 Institute of Electrical Engineer of Japan and Wiley Periodicals LLC. [ABSTRACT FROM AUTHOR]

In recent years, manufacturing firmsin the United States have faced increasing import competition from low-wage countries, especiallyChina. Doesthis competition hurt or help firm innovation? This paper studies the effect of the surge in imports from China on innovation by US manufacturing firms. We first propose a theoretical framework that generates an inverted-U-shaped curve of innovation on imitation, which is based on the endogenous price elasticity of demand for the product in a Cournot model. We then take the theoretical prediction to data on publicly listed firms in the Compustat data set from 1990 to 2010. We find consistent evidence that Chinese import competition had an inverted-U effect on firm innovation, as measured by patent counts and citation-weighted patents. Our result suggests that when import penetration is less than 60% it positively affects firm innovation, but when it is more than 60%, this positive effect is inverted. This inverted-U relation persists when we instrument import competition in the United States by using Chinese import penetration in the United Kingdom and when we test the robustness of the results by including sector-specific trends. We find that the inverted-U relationship is steeper for firms in high-tech industries. [ABSTRACT FROM AUTHOR]

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This paper leverages a rich dataset of 1.24 billion traffic flow observations across 36,666 vehicle detectors to estimate the price elasticity of traffic flow with respect to fuel prices in Melbourne, Australia. I find that a 1% increase in fuel prices leads to a 0.0556% decrease in traffic flow across Melbourne, where traffic flow is defined as the number of vehicles passing a vehicle counter per hour. I find significant regional heterogeneity across Melbourne, with evidence of positive own‐price elasticities in regions in the centre of the city, and in peak commute times on both weekdays and weekends, which I argue is evidence of a congestion‐speed effect. Moreover, regions near the CBD with high incomes tend to be less elastic than regions further away with reduced access to public transport. These findings can be used to determine the optimal tax or charge to internalise the externalities produced by motor vehicles. [ABSTRACT FROM AUTHOR]

Sin tax is essential to reduce the harm caused by products like cannabis. However, excessive taxation may facilitate illicit markets. We examine sin tax policies' impact on legal and illicit cannabis markets in the selected US states. Using a Constant Elasticity of Substitution utility framework, we assess scenarios like sin tax increase and anti‐illicit cannabis policies. Our findings indicate high sin taxes may drive consumers to illicit markets, but anti‐illicit market policies could control its extent. However, there is a trade‐off between market size, tax revenue, consumers' utility, and illicit market control. Thus, optimizing sin tax policies is challenging, necessitating a second‐best approach. [ABSTRACT FROM AUTHOR]

We analyzed the mechanism of urban food desert expansion based on data at the block level. According to the food demand curve, elasticity was high, and the nutritional food dietary decreased as store prices increased. The store prices within 500 m of the redevelopment site would tend to increase because luxury supermarkets would dominate, while over 500 m they would often tend to decrease because new non‐luxury supermarkets would compete for opening. There are two types of blocks with a high risk of food desert: A block surrounded by multiple redevelopments or a block whose store price has gone up considerably. [ABSTRACT FROM AUTHOR]