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Recent sports economics literature has focused on 'superstar effects,' or the independent impact of certain exceptional players on fan attendance at live events. This paper investigates the effect of top-drafted rookies on game attendance in the National Basketball Association from the 2012–13 through 2018–19 seasons. Hypothesizing that the nature of modern basketball could lend unique popularity to top draft picks during their rookie seasons, I find that the presence of top-ten draftees on both home and visiting teams is associated with average increases between 150 and 190 spectators per game throughout the second half of their rookie seasons. These marginal effects are statistically indistinguishable from the impact of an additional All-Star player on the visiting team. Unlike previous work, the censored regression model used in this paper accounts for teams' use of standing room to generate attendance beyond their listed arena capacities, a relevant consideration in over a quarter of the 8,594-game sample. [ABSTRACT FROM AUTHOR]

Empirical analyses of multinationals from emerging economies (EMNCs) have been a challenge because of the absence of systematic and consistent data. This study focuses on the impacts of patent examiner added citations on citation‐based measures of EMNC subsidiary knowledge inflows. The US patents of leading innovation‐oriented EMNCs from China and India between 2002 and 2014 are analyzed, with their major competitors from mature industrialized countries as a benchmark group. We find that, subsidiary knowledge inflow variables in the current study are not significantly distorted by examiner added citations. This study offers the validity evidence of employing the US patent and citation data in studying EMNCs. The results also contribute to patent economics literature in general by testing the impacts of examiner added citations on citation‐based measures of knowledge flows. [ABSTRACT FROM AUTHOR]

This paper contributes to the environmental literature by (i) demonstrating that the estimated coefficients and the statistical significance of the non-leading terms in quadratic, cubic, and quartic logarithmic environmental Kuznets curve (EKC) specifications are arbitrary and should therefore not be used to choose the preferred specification and (ii) detailing a proposed general-to-specific type methodology for choosing the appropriate specifications when attempting to estimate higher-order polynomials such as cubic and quartic logarithmic EKC relationships. Testing for the existence and shape of the well-known EKC phenomenon is a hot topic in the environmental economics literature. The conventional approach widely employs quadratic and cubic specifications and more recently also the quartic specification, where the variables are in logarithmic form. However, it is important that researchers understand whether the estimated EKC coefficients, turning points, and elasticities are statistically acceptable, economically interpretable, and comparable. In addition, it is vital that researchers have a clear structured non-arbitrary methodology for determining the preferred specification and hence shape of the estimated EKC. We therefore show mathematically and empirically the arbitrary nature of estimated non-leading coefficients in quadratic, cubic, and quartic logarithmic EKC specifications, being dependent upon the units of measurement chosen for the independent variables (e.g. dependent upon a rescaling of the variables such as moving from $m to $bn). Consequently, the practice followed in many previously papers, whereby the estimates of the non-leading terms are used in the decision to choose the preferred specification of an estimated EKC relationship, is incorrect and should not be followed since it potentially could lead to misleading conclusions. Instead, it should be based upon the sign and statistical significance of the estimated coefficients of the leading terms, the location of turning point(s), and the sign and statistical significance of the estimated elasticities. Furthermore, we suggest that researchers should follow a proposed general-to-specific type methodology for choosing the appropriate order of polynomials when attempting to estimate higher-order polynomial logarithmic EKCs. [ABSTRACT FROM AUTHOR]

Objective: This study aims to connect two strands of the psychology and economics literature, i.e., behavioural finance and agent-based macroeconomics, to assess the impact of managerial overconfidence at the micro and macro levels of the economy as a whole. Method: We build a macroeconomic stock-flow consistent agent-based model that is calibrated for the specific case of Poland to explore whether the overconfidence of top corporate managers in the context of their initial capital structure decisions is detrimental for the firms being managed in this way, the financial market dynamics, and the selected macroeconomic indicators. We model heterogeneous firms with different capital structure decision criteria depending on their degree of managerial overconfidence. Our model also includes a complete macroeconomic closure with aggregated households, capital producers, banking, and a public sector. Results: We find that firms with overconfident managers outperform in terms of investment and size but are also more fragile, thereby making them more likely to default. Finally, we run policy shocks and show that while investors' flight to liquidity creates financial turmoil and increases the probability of default. Conclusions: This paper contributes to the knowledge base by linking behavioural corporate finance and agent-based macroeconomics. In general, the excess overconfidence on the micro level, either an increase in the proportion of overconfident firms or a higher degree of overconfidence among managers, has a strong destabilizing impact on the economy as a whole on the macro level. [ABSTRACT FROM AUTHOR]

There has been a considerable amount of interest in the empirical investigation of social influence in the marketing and economics literature in the last decade or so. Among the many different empirical models applied for such investigations, the most common class of model is the linear-in-means model. These models can be used to examine whether social influence is truly a result of agents affecting each other through their choices simultaneously (endogenous effect) or of having similar taste and characteristics (homophily). However, the two effects are not separately identified in general in the standard linear-in-means model unless data on all members of an individual's network are available. With data on a sample of individuals from a network, these effects are not identified. In this research, we leverage a very natural aspect of social settings, namely that consumers are usually part of multiple—as opposed to single—networks. We discuss the sufficient conditions for identification when the standard linear-in-means model is extended to allow for multiple sources of social influence. We also show how the additional variation generated by more than one source of social influence actually allows estimation of endogenous effects with sample data. We demonstrate the feasibility of our approach via simulation and on the National Longitudinal Study on Adolescent Health data, which has been used in a number of studies examining social influence. Our approach is, therefore, likely to be useful in typical marketing settings. This paper was accepted by Matthew Shum, marketing. [ABSTRACT FROM AUTHOR]

There is a large literature examining the effect of taxes and tax concessions on local economic development. The last comprehensive review of taxes and economic development, however, was Wasylenko's review in 1997, which mostly examined the location response of firms. Subsequent to the last major review of the literature, empirical work in this area sought to address endogeneity concerns that plagued previous studies, resulting in a series of compelling new studies. This article reviews the empirical literature on tax-based economic development incentives produced since Wasylenko's 1997 review and covers property tax (including tax increment financing and business improvement districts); spatially targeted and zone-based tax concessions; firm-specific incentives; and corporate income taxes. The review focuses on academic studies that employ modern program evaluation or quasi-experimental techniques and U.S.-based policies. [ABSTRACT FROM AUTHOR]

A growing literature in economics studies ethical behavior and honesty, as it is imperative for functioning societies in a world of incomplete information and contracts. A majority of studies found more pronounced dishonesty among teams compared to individuals. Scholars identified certain nudges as effective and cost-neutral measures to curb individuals' dishonesty, yet little is known about the effectiveness of such nudges for teams. We replicate a seminal nudge treatment effect, signing on the top of a reporting form vs. no signature, with individuals and confirm the original nudge treatment effect. We further ran the same experiment with teams of two that have to make a joint reporting decision. Our results show the effectiveness of the nudge for teams, which provides further confidence in the applicability of the nudge. [ABSTRACT FROM AUTHOR]

Choice inconsistency has long been studied in behavioral economics. In this article we critically review theories of media choice, showing that they have not explicitly dealt with this phenomenon. Although digitalization has recently made it more salient, the communication literature on inconsistent choice still remains highly fragmented. We draw on behavioral economics literature to address blind spots in our theorization of inconsistent media selection. [ABSTRACT FROM AUTHOR]

Abstract We examine the development of China's environmental regulatory system over nearly 50 years and review economic studies of its effectiveness. China's environmental regulation system has evolved over time into a complex and multilayered labyrinth. However, studies in the economics literature tend to focus on a few policies that span periods for which data are available and that allow causal identification. While the literature suggests that the policies have been generally effective in improving environmental quality, it also reveals several challenges for conducting empirical analyses: a firm's regulatory status is frequently endogenous, data quality is variable, although improving over time, and overlapping policies may undermine traditional identification approaches. Further research is needed to comprehensively evaluate the cost-effectiveness of China's environmental regulations, identify the interactions of multiple policies, and extend the analyses beyond water and air to also include soil and other types of pollution. [ABSTRACT FROM AUTHOR]

There are many factors that affect the attitudes and behaviors of human beings, which have a very complex structure. However, mainstream economic theories have ignored other characteristics, including the role of emotions, by assuming that human beings are "rational" in the economic decision-making process. Although this assumption is actually controversial, it still maintains its strong established position in economic theories. In the study, the history of economic rationality and the objections developed against the rational individual were examined, and whether emotions affect the economic decision-making process was analyzed with a hypothetical experimental study, first based on observation, and then subjected to the Mann Whitney U test. According to the findings, it was determined that people are also affected by their feelings that they do not act solely on the assumption of rationality in the economic decision-making process. This finding is presented both as a unique contribution to the economics literature and as an option to be evaluated for economic policy makers. [ABSTRACT FROM AUTHOR]

This paper analyzes the determining factors of South to Center‐North migration flows in Italy for five different educational groups. We find strong support for the paramount role of total and education‐specific migration networks. Furthermore, we unveil an inverse relationship between the magnitude of the response of migration flows by educational level and the regional endowment of human capital. More generally, it emerges that once migrants educational attainment is explicitly considered, the reaction of migration flows is highly heterogeneous with respect to the push and pull factors that usually determine them. In the economics of migration literature, these results have not yet been documented. [ABSTRACT FROM AUTHOR]

Through a survey of the literature on the economics of the coronavirus (COVID-19) pandemic, this study explores the effects of the pandemic and proposes potential policy directions to mitigate its effects. Our survey reveals that adverse economic effects have been observed due to the COVID-19 pandemic in addition to fatalities. Furthermore, the survey indicates the need for greater coordination at national and international levels. This study concludes by suggesting coordination among monetary, macroprudential, and fiscal policies (trio) to mitigate the adverse economic effects of COVID-19. Finally, this study explores potential directions for future research. [ABSTRACT FROM AUTHOR]

It is a basic consensus that culture affects savings, but the empirical evidence is inadequate. This paper investigates the relationship between culture and savings by using the Hofstede cultural indices, and macro data across 48 countries over the period 1990–2013. The results show that country-fixed effects are highly significant, even if traditional variables are controlled for. We discover that culture can explain much of these individual effects and thus is very important in explaining differences in savings across countries. We use the method of Relative Importance Analysis (RIA) to measure the relative importance of the various cultural dimensions in affecting saving rates. We find that culture-related variables are among the most important saving determinants, along with other variables more commonly used in the economics literature, such as economic growth, social security, and demographics. [ABSTRACT FROM AUTHOR]

• Unethical behavior is usually associated with the risk of negative consequences. • However, the experimental literature so far focused mainly on environments that involve no fines. • We study ethical behavior of individuals and small groups in a compliance setting. • Our results show that groups are clearly less compliant than individuals. • The risk of being detected is the most important aspect in the group communication. Unethical behavior in organizations is usually associated with the risk of negative consequences for the organization and for the involved managers if being detected. The existing experimental literature in economics has so far focused mainly on the analysis of unethical behavior in environments that involve no fines or similar monetary consequences. In the current paper, we use a tax compliance framework to study (un-)ethical behavior of individuals and small groups. Our results show that groups are clearly less compliant than individuals. The risk of being detected is the most important aspect in the group communication process when deciding on compliance. [ABSTRACT FROM AUTHOR]

Economic trade theory suggests that the Belt Road Initiative (BRI) can lead to more trade and increases in welfare. However, this can also lead to various challenges. In this paper, we use recent literature in economics to identify three such challenges. The first is that there is increasing evidence of malinvestment in previous Chinese infrastructure investments, rising corporate debt and corruption. If the BRI worsens this phenomena, the consequent financial and economic crisis in China is likely to have serious contagion effects with global ramifications. Second, trade brings about winners and losers within a country and unless there is adequate redistribution of the gains within an economy it can lead to increased inequality, poverty and structural unemployment. Finally, there are negative consequences to the environment that trade expansion may bring about unless effective legal, political and economic institutions are in place addressing the issue. [ABSTRACT FROM AUTHOR]

We use topic modeling to study research articles in environmental and resource economics journals in the period 2000–2019. Topic modeling based on machine learning allows us to identify and track latent topics in the literature over time and across journals, and further to study the role of different journals in different topics and the changing emphasis on topics in different journals. The most prevalent topics in environmental and resource economics research in this period are growth and sustainable development and theory and methodology. Topics on climate change and energy economics have emerged with the strongest upward trends. When we look at our results across journals, we see that journals have different topical profiles and that many topics mainly appear in one or a few selected journals. Further investigation reveal latent semantic structures across research themes that only the insider would be aware. [ABSTRACT FROM AUTHOR]

Research and development (R&D) activities, which are considered as the important power of economic growth, have an important role for the country's economy. The endogenous growth theories, which have become popular since the 1980s, have revealed the role of R&D in economic growth. The effects of technology and R&D activities on economic growth (GDP) have been studied for a long time in the economics literature. In the new economic order emerging in the globalization process, it is possible to increase the production of products with high added value, especially through R&D activities. Therefore, the shares allocated to R&D and the expenditures made stand out as an important factor in the realization of growth. As the share of R&D expenditures on GDP increases, it is thought that technological innovation and development will increase and contribute to sustainable growth. In this study, the relationship between R&D expenditures and economic growth was examined with a panel data model for 33 OECD countries over the period of 2010- 2018. As a result of the analysis, it has been revealed that R&D expenditures have a positive effect on growth. For this reason, it can be said that countries aiming to accelerate economic growth as a policy recommendation should focus on R&D investments. [ABSTRACT FROM AUTHOR]

The fundamental assumption we base this Special Issue on is that narrow concepts of growth have become the ruling ideas of this age, entrenched both in everyday life and to a considerable extent in the theoretical thinking and traditions of research conducted by organization and management studies scholars. We explain how tacit (or overt) endorsement of unbridled economic growth (the growth imperative) has pernicious practical effects and how it tends to restrict the intellectual base of the field. We argue that notions of degrowth present scholars with challenges as well as opportunities to reframe core assumptions and develop new directions in theory and research. Envisioning a post-COVID 19 world where societies and organizations can flourish without growth is one of the most difficult tasks facing theorists. We approach this challenge first by discussing the hegemonic properties of growth ideology and second by sketching an alternative political economy as a context for reimagining social and economic relations within planetary capacities in a post-growth era. Drawing on degrowth literature in ecological economics, sociology and political ecology, we identify key principles relevant to processes of organizing for a more just and environmentally sustainable future: frugal abundance, conviviality, care, and open relocalization. We conclude by introducing the three articles we feature in this issue along with some thoughts about theorizing policy and regulatory changes needed to generate transformational change and a future research agenda. [ABSTRACT FROM AUTHOR]

This study aims to obtain a general point of view by revealing the existing knowledge on Islamic economics and finance, and thus to create a guideline on possible areas for future studies. In this context, the literature on Islamic economics and finance was examined with bibliometric analysis. The results show that the interest in the subject is increasing. The most important actors of this trend have been identified as Malaysia, USA and UK. Malaysia ranks first in terms of the number of published works and the number of citations. Considering the diversity of subjects in the studies in the field of Islamic finance, it can be said that the concept of Islamic banking will continue to maintain its importance in the forthcoming period. When examined in terms of periods, the first period can be defined as a formation stage in which definitions related to the field are revealed. In this period, the coexistence between Islam and banking and finance was tried to be explained. In the second period that followed, the studies carried out in the field made it possible to transfer the accumulated knowledge to practice by focusing more on applications. In the last period, the association of Islamic finance concepts with different fields indicates that the field has completed a certain development process. By looking at the rate of formation of existing interactions, it can be interpreted that the interactions that will take place in the future will be much more diversified. [ABSTRACT FROM AUTHOR]

Building on the recent surge of interest in understanding the influence of entrepreneurship on individual health and well-being, we ask whether county-level creative destruction is associated with county-level health outcomes. Consistent with regional economics and epidemiology literature our unit of analysis is at the regional (i.e., county) level. Based on a sample of 3072 U.S. counties between 2009 and 2015, we find that creative destruction is negatively associated with the share of fair/poor health, the share of frequent physical distress, the share of frequent mental distress, and age-adjusted mortality. The results further show that creative destruction tamps the negative effects of unemployment, income inequality, and rural areas on health and mortality. The estimates are consistent for commuting zones as an additional unit of geographic analysis. [ABSTRACT FROM AUTHOR]

This article aims to investigate the spatial effect of the quality of human capital and to identify if there is educational spillover from higher education in the proficiencies of elementary students. Although the role of geographical aspects has been studied in several academic areas, in the literature on the economics of education such studies are incipient and the few existing contributions use the stock of education as the object of analysis. The present study differs by using proficiency as a proxy for quality and also by examining the spillover effect of the presence and quality of university courses in the area of education. The results indicate a strong spatial dependence, suggesting the spatial dimension influences school performance. On the other hand, higher education institutions influence school performance in the municipality of origin, but not that of neighboring municipalities. [ABSTRACT FROM AUTHOR]

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Purpose: This paper aims to conceptualize the nexus between the participatory finance and the higher ethical objectives within the Islamic moral economy, also termed as Maqasid al Shari'ah. Design/methodology/approach: Insights from the extant Islamic economics and finance literature are integrated through an interpretative systematic review using the principles from critical interpretative synthesis (CIS). Findings: A coherent framework is synthesized comprising the typology of the Maqasid al Shari'ah, the axioms of participatory finance and their nexus which is formulated by theorizing the common thread of meaning through the axioms of participatory finance and Maqasid al Shari'ah at the interpretative level. This framework postulates that the participatory finance fits well in the ethos and the value system of Islam. Moreover, "social well-being" invariably provides the nexus between the Maqasid al Shari'ah and participatory finance. Originality/value: This study contributes to the Islamic economics and finance literature by integrating the dissenting views from the divergent literature related to the basic philosophy of Shari'ah and participatory finance and provides grounds for policy implications, particularly, for designing the financial products. Moreover, it demonstrates an application of interpretative systematic review in Islamic banking and finance research. [ABSTRACT FROM AUTHOR]

This article utilizes a political economy framework to examine how FDA regulations impacted the U.S. healthcare sector's ability to address COVID‐19. I specifically examine the developing COVID‐19 testing, the approval of the medication remdesivir, and COVID‐19 vaccines. By examining periods before and after the FDA issued Emergency Use Authorizations (EUAs), my analysis finds that the FDA's regulations enacted before the COVID‐19 pandemic began strongly restricted clinician and patient access to COVID‐19 testing, remdesivir treatment, and approving vaccines. After the FDA issued EUAs, the healthcare sector quickly adopted COVID‐19 testing and remdesivir with little evidence of negative consequences. These findings contribute to the economics literature examining the FDA and contemporary COVID‐19 policy research. [ABSTRACT FROM AUTHOR]

In this paper, five of the main design challenges of local flexibility markets (LFMs) for congestion management are identified and discussed based on desirable market properties from economics theory and literature review. The five main design challenges are low market liquidity, reliability, baselines, forecast errors at low aggregation levels, and the high cost of measurements. A comprehensive capacity-limitation based LFM design has been proposed to address the challenges and a simulation example is presented to illustrate the design. The proposed design facilitates market participants' decision making by design elements that improve market liquidity, reliability and handling of forecast errors. Moreover, a new capacity limitation product is proposed that is not defined with respect to a baseline and does not require sub-meter measurements leading to lower costs and conflict-of-interest in delivery validation. Generic algorithms are also proposed for calculating utility and cost of the flexibility product. The proposed design and discussions can contribute to improving the inter-disciplinary area between engineering and economics while helping policy-makers and LFM stakeholders to further understand the problem from a multi-dimensional perspective. • Five common challenges in the design of local flexibility markets are identified. • A product is proposed addressing baseline issues and reducing verfication costs. • Design-related solutions are proposed to increase market liquidity. • An integrated triple-stage market framework is proposed. • Algorithms are proposed for calculating cost and utility of the flexibility product. [ABSTRACT FROM AUTHOR]

This paper investigates whether individuals' cultural background affects their housing investment decisions, drawing inferences from property location choices, and transaction prices in Australia. We propose a novel measure of cultural distance for each homebuyer–neighborhood pair, adopting the six‐dimensional cultural framework of Hofstede. Our measure captures interethnicity similarity and thus measures the cultural similarity of each buyer and neighborhood pair at a more granular level. Utilizing housing transaction data of a culturally diverse city Sydney, Australia, we find that buyers are more likely to buy properties in neighborhoods with a shorter cultural distance to their culture of origin and are willing to pay a premium for properties in those locations, consistent with buyers' preference for cultural proximity. Further, we show that cultural proximity preference is stronger for ethnicities from recent migration waves, particularly Asia. Our findings are generalizable to other regions with ethnic aggregations and offer new insights into the growing literature on culture and household finance as well as the urban economics literature. [ABSTRACT FROM AUTHOR]

This paper provides metaphilosophical reflections on economic methodology by way of discussing the 'Helsinki approach'. This approach combines the study of the practice of economics with an endeavor to retain a normative perspective. It also explains that it is difficult to find explicit espousals of mainstream economics in the methodological literature not because nobody takes a mainstream view, but rather because expressing such a view is inconsistent with the prevalent metaphilosophical approach. [ABSTRACT FROM AUTHOR]

Purpose: This paper analyses the impact of institutional proximity, cognitive proximity and geographical proximity (in the form of agglomeration economies) on the firm-level productivity of foreign-owned firms in Ireland. The analysis of agglomeration economies, consisting of internal economies of scale, localization economies, related variety and urbanization economies, has a strong pedigree in regional economics literature. Increasingly, however, alternative explanations of firm-level productivity performance have been explored with institutional and cognitive proximity often identified as other important determinants of performance. This paper presents an analysis of the importance of agglomeration economies (based on geographical proximity) versus institutional and cognitive proximity (which may be a-spatial). Design/methodology/approach: A series of measures capturing regional level agglomeration economies are generated as well as measures of institutional and cognitive proximity. The impact of these effects on foreign-owned firm-level productivity is analysed using data from the Irish Census of Industrial Local Units 2009. The estimation method employed is general method of moments (GMM) which allows for the potential endogeneity of variables within the system of analysis. Findings: The results reveal that institutional proximity has a positive impact on productivity. A possible reason for this result is that local units of the same nationality are sharing knowledge in relation to successfully conducting business in Ireland. However, cognitive proximity is found to be statistically insignificant. Agglomeration economies are also important with urbanization economies and the availability of skilled labour having a positive effect on productivity. Originality/value: The key contributions of this paper are as follows; firstly, the paper provides the first test of the institutional and cognitive proximity hypotheses on productivity while also controlling for a series of internal and external agglomeration economies. Secondly, the analysis considers, firm level, regional level and national level indicators as determinants of firm's productivity. In combining micro and macro level indicators, the paper attempts to answer the call of Van Oort et al. (2012) for such analyses. Thirdly, the paper provides the first detailed examination of the role of 'proximity' on foreign-owned manufacturing firms in the Irish context. [ABSTRACT FROM AUTHOR]

The Pricing affairs of Initial Public Offerings (IPOs) and their performance in stock market are among the most widely discussed phenomena in economics literature. These two conceptions are critical to an IPO's success or failure. This research paper explores the actual relationship lies between the Pricing of IPOs and their subsequent performance. The study is based on the data of 123 mainstream Indian IPOs which got listed in NSE during 2015 to 2020. The methodical results explain that price adjustment value, percent change in price band value, and offered price value has a significant impact on underpricing/overpricing for selected IPOs. The findings show that, in India, underpricing/overpricing accounts for a higher percentage of IPOs subscription but do not have any impact on the average mean stock. [ABSTRACT FROM AUTHOR]

It is conventional in the sports economics literature to assume that professional sports teams are local monopolists and that stadium attendance below capacity has approximately zero marginal cost, implying that prices should optimally be set at the point of unit elasticity, regardless of whether teams are win maximisers or profit maximisers. The empirical literature has puzzled over the finding that prices appear to be set on the inelastic part of the demand curve. This paper approaches the problem in a different way. If the assumptions are true, then tax theory implies that an ad valorem tax such as VAT should be absorbed in full by the sellers. The paper uses company records that identify attendance and gate revenue for over 6000 English Football League games between 1971 and 1974, to examine the impact of the adoption of 10% VAT in the UK on April 1, 1973. The data suggests that pass through rates varied considerably, averaged around 25%, and were seldom zero. [ABSTRACT FROM AUTHOR]

The growing literature on happiness economics suggests that, together with absolute income, individual well-being is affected by relative income both horizontally (i.e. because of differences between an individual's income and that of others to whom she compares) and vertically (i.e. compared to changes in individuals' own income). Moreover, the way in which individuals value their relative situation and the distribution of income will determine how inequality affects individual well-being. This paper aims to examine the relationship between these variables in the case of China, focusing mainly on how income inequality affects subjective well-being. Using data from the CGSS, the results suggest that both absolute and relative income affect subject well-being, and that an inverted-U shaped relationship between income inequality and individual well-being appears at least for urban residents, whereas this relationship tend to be negative in the case of people living in rural areas. [ABSTRACT FROM AUTHOR]

Objectives: Cost-effectiveness analysis (CEA) embeds an assumption at odds with most economic analysis-that of constant returns to health in the creation of happiness (utility). We aim to reconcile it with the bulk of economic theory.Methods: We generalize the traditional CEA approach, allow diminishing returns to health, and align CEA with the rest of the health economics literature.Results: This simple change has far-reaching implications for the practice of CEA. First, optimal cost-effectiveness thresholds should systematically rise for more severe diseases and fall for milder ones. We provide formulae for estimating how these thresholds vary with health-related quality of life (QoL) in the sick state. Practitioners can also use our approach to account for treatment outcome uncertainty. Holding average benefits fixed, risk-averse consumers value interventions more when they reduce outcome uncertainty ('insurance value') and/or when they provide a chance at positively skewed outcomes ('value of hope'). Finally, we provide a coherent way to combine improvements in QoL and life expectancy (LE) when people have diminishing returns to QoL.Conclusion: This new approach obviates the need for increasingly prevalent and ad hoc exceptions to CEA for end-of-life care, rare disease, and very severe disease (eg, cancer). Our methods also show that the value of improving QoL for disabled people is greater than for comparable non-disabled people, thus resolving an ongoing and mathematically legitimate objection to CEA raised by advocates for disabled people. Our Generalized Risk-Adjusted Cost-Effectiveness (GRACE) approach helps align HTA practice with realistic preferences for health and risk. [ABSTRACT FROM AUTHOR]

Crop diversification is a common agricultural policy objective. However, the determinants and impacts of crop diversification are heterogeneous and depend on a range of crop-specific characteristics. Index-based measurements of crop diversification, common in the agriculture economics literature, are unable to account for this heterogeneity. Using two national panel surveys from Malawi and Zambia, we develop a multinomial treatment effects model to examine the determinants of adopting seven discreet cropping systems and their impacts on maize productivity and crop income stability. The results of this approach are compared to those obtained when using a Gini–Simpsons index. Differences between the two empirical approaches highlight the importance of accounting for cropping system heterogeneity when conducting analyses of crop diversification to inform policy. For example, in Zambia, we show that levels of output market competition have no significant effect on diversification when diversification is measured as an index. However, at a cropping system level increased private trader activity is associated with a reduced probability of adopting subsistence-oriented cropping systems and an increased probability of adopting more productive and commercialised systems. [ABSTRACT FROM AUTHOR]

Geographical indications (GI) certify the geographical origins of a product and delineate the specific area in which the certified product must be produced. Despite a large literature on the economics of GIs, few papers have explored the question of the optimal size of GI regions. This note presents a flexible conceptual framework to explore the economics and politics of the delimitation of a GI. The general framework describes the efficiency and distributional effects of the size of a GI and shows how this affects interest groups' incentives to influence government decision‐making. [ABSTRACT FROM AUTHOR]

This paper reviews experimental studies on the so‐called "hold‐up problem." Common features in the experimental design and results are summarized. Most experimental studies show evidence of the hold‐up problem, but to an extent less severe than what standard self‐interest model predicts. Hold‐up occurs at the individual level, but exhibits a less severe pattern than theoretically predicted at the aggregate level. A positive correlation is found between the investment stage decisions and subsequent bargaining behavior. Social preferences largely influence the results in hold‐up games. Remedies that enhance the effect of social preferences can effectively alleviate the hold‐up problem. These laboratory findings are also relevant to real‐life hold‐up situations, but differences in the specific institution and environment may require more variations in the experimental design. [ABSTRACT FROM AUTHOR]

Offshoring, either as FDI or offshore outsourcing, is a phenomenon of increasing importance that has been widely studied in the economics literature. Studies analysing the impact of offshoring on the labour market report divergent results. In this paper we develop a meta-analysis of the empirical literature that estimates the effect of offshoring on wages. We find that, after correcting for the presence of publication bias, the average effect is not significantly different from zero in either the origin or the destination countries. We also find that the wage impact of offshoring depends on methodological characteristics of the primary studies, such as the way offshoring is measured, the nature of goods/services that are offshored, the workers' skill level, the unit of analysis, the structure of the data, and the estimation technique. [ABSTRACT FROM AUTHOR]

When the 1968 Merger Guidelines were drafted, both the economics and antitrust literatures addressed how competition could be softened when oligopolists anticipated the natural and predictable responses of their rivals to their competitive moves, such as price cuts or output expansion. But when economists developed new models of oligopoly behavior, and of coordinated effects in particular, the older ideas were dropped—until the 2010 Guidelines, when the older ideas were reincorporated along with the newer ones. Our article points out limitations of the workhorse repeated game model of oligopoly conduct for analyzing coordinated effects of mergers, and suggests ways to make that model more realistic. We also identify important research questions that are raised when attempting to account for oligopolists' natural and predictable responses in evaluating the consequences of mergers, and suggest studying Stackelberg reactions as a way to make progress in doing so. [ABSTRACT FROM AUTHOR]

Most of the literature on the economics of catastrophes assumes that such events cause a reduction in the stream of consumption, as opposed to widespread fatalities. Here we show how to incorporate death in a model of catastrophe avoidance, and how a catastrophic loss of life can be expressed as a welfare-equivalent drop in consumption. We examine how potential fatalities affect the policy interdependence of catastrophic events and 'willingness to pay' (WTP) to avoid them. Using estimates of the 'value of a statistical life' (VSL), we find the WTP to avoid major pandemics, and show that it is large (10% or more of annual consumption) and partly driven by the risk of macroeconomic contractions. Likewise, the risk of pandemics significantly increases the WTP to reduce consumption risk. Our work links the VSL and consumption disaster literatures. [ABSTRACT FROM AUTHOR]

State support remains a leading cause of tension in international commercial relations. Governments see trade distortions that look like they were caused by industrial subsidies, but lack data to illuminate that state support. In the 1980s, the Organisation for Economic Co‐operation and Development (OECD) developed an index that helped countries to see the overall incidence of agricultural subsidies, initially called the Producer Subsidy Equivalent (PSE) and the Consumer Subsidy Equivalent (CSE). Are there lessons for today in the PSE approach? I try to answer that question from the standpoint of economics: how did the PSE evolve, what is it, is the concept relevant to industrial subsidies? And of politics: how was OECD able to create the tool, and do present conditions permit something similar? The PSE was a response to a shared perception of crisis. It drew on well‐established concepts in the agricultural economics and trade literatures. And it works best in a context where market power is sufficiently diffuse that a price gap between domestic and world prices can be calculated. Only some of those conditions can be met when applying the approach to concentrated industries dominated by large firms that operate in multi‐country supply chains. [ABSTRACT FROM AUTHOR]

I model the dynamics of the amount of knowledge being learnt and created in the co-invention process between two inventors, by highlighting interpersonal knowledge similarity. Further, I employ U.S. inventor-dyad-level patent data (including 250,546 inventor-dyads) to examine the relationship between knowledge similarity and co-invention performance of the two-inventor teams. The preliminary findings are consistent with the model that predicts a left-skewed inverted U-shaped relationship, suggesting that co-invention performance measured by number of patents is better in teams that consist of inventors with a medium level of similarity in technological knowledge prior to the co-invention process, and that the performance measured by weighted patents is better in teams with more technologically dissimilar members. The study enriches the literature on economics of innovation by explicating knowledge production of inventors in the co-invention process and revealing the left-skewed inverted U-shaped relationship between knowledge similarity and knowledge production performance. In practices, the study suggests assembling teams with technologically dissimilar members for optimal knowledge production performance, especially for the purpose of producing high-quality inventions. [ABSTRACT FROM AUTHOR]

A theory of value is an analytical description of how value of economic variables is determined. Complexity economics is a school of thought that, using complexity science conception achievements, is intended to establish a new approach to economics, compared with conventional economic theory, i.e., neoclassical economics. The view of economic reality expressed by complexity economics literature so far, however only elaborated a different formulation of the premises from which the theory of value dominating economic science since a century and a half, actually proceeds. After pointing out the current position of complexity economics and neoclassical economics literature, the article indicates how, in order to constitute itself as an alternative economic theory, complexity economics should also produce a new theory of value: an explanation of the way economic variables values are determined, based on a view of the world as a complex system and constantly evolving reality. The concluding part of the paper, therefore, hints at a theory of value in which the value of economic variables is determined during all the phases of the unfolding of an economic system, considered as part of a larger natural complex. [ABSTRACT FROM AUTHOR]

Employing tick-by-tick maximum likelihood estimation on several leading models from the financial economics literature, we find that the market microstructure noise is mostly explained by a linear model where the trade direction, that is, whether the trade is buyer or seller initiated, is multiplied by the dynamic quoted bid-ask spread. Although reasonably stable intraday, this model manifests variability across days and stocks. Among different observable high frequency financial characteristics of the underlying stocks, this variability is best explained by the tick-to-spread ratio, implying that discreteness is the first residual source of noise. We determine the bid-ask bounce effect as the next source of noise. [ABSTRACT FROM AUTHOR]

Consumer-generated online reviews of credence service providers, such as doctors, have become common on platforms such as Yelp and RateMDs. Yet doctors have challenged the legitimacy of these platforms on the grounds that consumers do not have the expertise required to evaluate the quality of the medical care they receive. This challenge is supported by the economics of information literature, which has characterized doctors as a credence service, meaning that consumers cannot evaluate quality even after consumption. Are interventions needed to ensure that consumers are not misled by these reviews? Data from real online reviews shows that many of the claims made in real reviews of credence service providers focus on experience attributes, such as promptness, which consumers can typically evaluate, rather than credence attributes, such as knowledge. Follow-up experiments show that consumers are more likely to believe experience claims (vs. credence claims) made by other consumers, claims that are supported by data, and longer reviews even if they are not more informative. The authors discuss implications for consumers and credence service providers and possible policy interventions. [ABSTRACT FROM AUTHOR]

Purpose: This paper explores the effect of financial support on farmer cooperative development in the Chinese context, aiming to evaluate the effectiveness of public inputs and draw implications for the sustainable development of cooperatives. The variance of the effect in different sectors, i.e. crop, forestry, husbandry, fishery and services, is investigated. Design/methodology/approach: Provincial-level panel data from 2007 to 2017 are used for this study. A linear dynamic panel regression model is estimated using multiple estimation methods, i.e. the generalized method of moments (GMMs), fixed-effect model and ordinary least squares (OLS) are applied. Findings: The empirical analyses indicate that the role of the government is important for the development of farmer cooperatives but limited in some specific aspects. First, the coverage of financial support is positively associated with the growth of cooperative population and membership size, but the strength of financial support, measured by the total amount of financial support divided by local agricultural gross domestic product (GDP), has no statistically significant effects on the development of cooperatives. Second, financial support does not exhibit significant influence on the revenue of cooperatives. Third, the magnitude of the effect of government support on cooperative development is heterogeneous across different sectors. Originality/value: The research study adds to the institutional economics literature on the association between institutional environment and organization development by focusing on a particular and an important type of organization, i.e. farmer cooperatives. It is one of the attempts and a most extensive study to empirically investigate the role of financial support in the development of farmer cooperatives. [ABSTRACT FROM AUTHOR]

Although there are theoretical researches on the interactions between four shipping sub-markets, empirical studies examining four to cover are rare. Also, market interactions may differ in positive or negative environments. Accordingly, the purpose of this study is to examine the hierarchical structure among the 4 sub-maritime markets by providing a methodological proposition. This study integrates the Interpretive Structural Modelling (ISM) method with the asymmetric causality analysis and examines the hierarchical structure between the four markets in terms of positive and negative shocks through the Capesize markets. The dataset used in the study covers the period between 07.01.2013 - 18.07.2019 and consists of 342 weekly observations. The results show that the hierarchical flow of positive and negative shocks differs in the Capesize market. In terms of positive shocks, the demolition market stands out as the starting point of the shocks, while in terms of negative shocks, freight and new building markets come to the fore. Our study reveals hierarchical structures for maritime markets by testing their relationships empirically and contributes to the maritime literature where the freight market is theoretically considered a pioneer. A new methodical perspective is thought to be presented to the maritime economics literature. [ABSTRACT FROM AUTHOR]

This paper reviews the recent literature on economics and culture to investigate whether and how it considers the context. It first describes how culture reentered the economic literature from 1990s onwards. It then presents empirical studies on the relation between culture, institutions and economic performance. Thereafter, the role of culture for economic change as well as the historical roots of cultural differences are investigated. Finally, the question whether these approaches are contextual is answered, and recommendations are made for enhancing a cultural/contextual view on economics when appropriate. [ABSTRACT FROM AUTHOR]

The earned income tax credit (EITC) is the cornerstone US anti-poverty program for families with children, typically lifting millions of children out of poverty each year. Targeted to low-income households with children and only available to those who work, the EITC contains strong incentives for nonworkers to become employed. Most of the existing economics literature focuses on federal EITC expansions in the 1980s and 1990s. This paper takes a longer view, studying all federal expansions since the program's inception in 1975. We find robust evidence that EITC expansions increase the extensive margin of labor supply. [ABSTRACT FROM AUTHOR]