nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2012‒03‒08
twenty-one papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Total Work and Gender: Facts and Possible Explanations By Michael Burda; Daniel S. Hamermesh; Philippe Weil
  2. Behavioural Economics and Policymaking: Learning from the Early Adopters By Lunn, Pete
  3. New research methods of business history By Lepore, Amedeo
  4. Considering adoption: Towards a consumption-oriented approach to innovation By Rekers, Josephine V.
  5. From Property Rights and Institutions, to Beliefs and Social Orders: Revisiting Douglass North’s Approach to Development. By Dellepiane-Avellaneda, Sebastian
  6. The Impact of State Marketing Board Operations on Smallholder Behavior and Incomes: The Case of Kenya By Mather, David; Jayne, T.S.
  7. Negative publicity on the endorsement process does it influence for-profit and not for-profit print advertisements? By Roozen, Irene
  8. Electrical Appliance Ownership and Usage in Ireland By Leahy, Eimear; Lyons, Seán; Walsh, Sharon
  9. Service innovation in manufacturing firms : evidence from Spain. By Santamarmía, Lluís; Nieto, María Jesús; Miles, Ian
  10. Assessing Bank Competition within the East African Community By Matthew Gaertner; Sarah Sanya
  11. Coalitions in the airline industry: an empirical approach By David Bartolini; Alberto Gaggero
  12. The Rise and Fall of Unions in the U.S. By Emin Dinlersoz; Jeremy Greenwood
  13. Trends in Income and Price Elasticities of Transport Demand (1850-2010) By Roger Fouquet
  14. Innovating global value chains : creation of the netbook market by Taiwanese firms By Kawakami, Momoko
  15. Understanding Neoliberalism as Economization: The Case of the Ecology By Fikret Adaman; Yahya M. Madra
  16. Vertical Integration and Market Structure By Timothy F. Bresnahan; Jonathan D. Levin
  17. Engines of Growth: Farm Tractors and Twentieth-Century U.S. Economic Welfare By Richard H. Steckel; William J. White
  18. The law of one price and the role of market structure By Caglayan, Mustafa; Filiztekin, Alpay
  19. Culture and the Historical Process By Nathan Nunn
  21. Family Control and Executive Compensation By Palmberg, Johanna

  1. By: Michael Burda; Daniel S. Hamermesh; Philippe Weil
    Abstract: Time-diary data from 27 countries show a negative relationship between real GDP per capita and female-male differences in total work time—work for pay and work at home. In rich non-Catholic countries on four continents men and women do about the same average amount of total work. Survey results demonstrate, however, that labor economists, macroeconomists, sociologists and the general public believe that women work more. The widespread average equality does not arise from gender differences in the price of time, from intra-family bargaining or from spousal complementarity. Several theories, including ones based on social norms, might explain these findings and are consistent with cross-national evidence from the World Values Surveys and sets of microeconomic data from Australia and Germany.
    Keywords: time use, gender differences, household production, paid work
    JEL: J22 J16 D13
    Date: 2012–02
  2. By: Lunn, Pete
    Abstract: This paper critically examines initial applications of Behavioural Economics (BE) to policymaking. It focuses primarily but not exclusively on what can be learnt from the early adopters of policies inspired by BE, notably America and Britain. BE is defined by its inductive scientific approach to economics, which results in empirical demonstrations that are persuasive to policymakers facing practical problems. The analysis identifies three routes via which BE has influenced policy: (1) the theory of libertarian paternalism ("nudges"), (2) the provision of toolkits for policymakers seeking behavioural change, and (3) the expansion of the skill-set of applied economists (and scientists in related disciplines). The effectiveness of each route is assessed, in terms of the likelihood of successfully integrating scientific advances with policy development. The analysis concludes that route (3) is the only one that can adapt to the ongoing and rapid evolution of what is a young science. Successful policy applications are most likely where there is expert input to policy development and the capacity to engage in applied experimentation and piloting of policy ideas. The implication is that countries, including Ireland, are more likely to reap the benefits of BE if they create an effective interface between applied economists and policymakers.
    Keywords: Policy/policy development/Ireland
    Date: 2012–02
  3. By: Lepore, Amedeo
    Abstract: Business history, while not clearly established or widely recognized, is an open framework that can include in addition to issues related to the evolving economy, business, market and business, other areas of institutional, cultural and social, related to contemporary events resulting from the long process of industrialization. The first industrial revolution began in the late eighteenth century, the next highest industrial processing of the second half of the nineteenth century, the mass industrialization of the twentieth century and the new post-Fordist landscape of the twenty-first century are the historical landmarks that anchor the activities of a phenomenon that has accompanied the various stages of development of the world economy and, over time characterized by the primacy of capitalist production Buoyancy. Not to deny that in earlier times there have been significant events or structures and there were also areas of significant value to the business history, but want to say that the central focus for the growth of this area is the spread of the capitalist system within industry, agriculture, services, accounting and finance. In summary, business history is an essential element, in terms of quality, for understanding the economic fabric of a country, consistently dynamic and comparative.
    Keywords: Business History; Traditional methods of study; New methodologies for research; Open Innovation; Long Tail;
    JEL: N8 N01 N00
    Date: 2012–02–07
  4. By: Rekers, Josephine V. (CIRCLE, Lund University)
    Abstract: What are the forces that shape the adoption of innovations? This question has been sidelined in a largely production-centric literature on the economic geography of innovation. Inspired by Weber’s dual concern with procurement and distribution activities in the location of industry, this paper examines the new nature of distances products must overcome en route to the market, and the resources that are necessary to do this successfully. Building on findings in sociology, this paper suggest a consumption-centric perspective and future research on innovation in the knowledge-based economy, which foregrounds the significance of actors that are able to validate new products.
    Keywords: innovation adoption and diffusion; consumption; sociology of scientific knowledge; Alfred Weber; knowledge economy
    JEL: O30
    Date: 2012–02–27
  5. By: Dellepiane-Avellaneda, Sebastian
    Abstract: Douglass North is a uniquely creative and inspiring social scientist. The impact of North’s ideas in the area development cooperation can hardly be overstated. By stressing the role of institutions, this scholar has immensely influenced development thinking and practice, providing intellectual underpinnings to the dominant good governance paradigm. North’s landmark Institutions, Institutional Change and Economic Performance is one of the most cited books in the social sciences. This paper contends, however, that North’s ideas are widely cited, but not always properly understood. Moreover, some of his core arguments have been overlooked, ignored, or misrepresented, not least by the aid community. This paper provides a systematic assessment of the content and evolution of North’s writings, from his pioneering works on property rights and institutions in the 1970s, to his recent scholarship on beliefs and political violence. The focus is on identifying the key analytical problems and remaining challenges of the institutional approach to development. The paper also takes issue with the inconsistencies and policy gaps of the good governance consensus. In doing so, it also reflects upon the future of the research program on institutions and development. Would the renewed emphasis on politics, conflict, inequality, and context lead to an improved governance agenda or to a shift towards a post-institutionalist paradigm?
    Date: 2012–01
  6. By: Mather, David; Jayne, T.S.
    Abstract: Despite the resurgence of parastatal marketing boards and strategic grain reserves over the last decade in eastern and southern Africa, there is little empirical evidence about how their activities affect smallholder input use and cropping decisions. This paper uses panel survey data from 1997-2007 on Kenyan smallholders to investigate the effect of Kenyaâs National Cereal Produce Board (NCPB) activities on farm-gate maize price expectations, output supply, and factor demand.
    Keywords: Kenya, Marketing, Smallholder, Agribusiness, Demand and Price Analysis, Food Security and Poverty,
    Date: 2011–11
  7. By: Roozen, Irene (Hogeschool-Universiteit Brussel)
    Abstract: This paper describes an experiment which tested the effectiveness of warm and cold appearance endorsers for for-profit and not-for-profit print advertisements. Moreover, the effects of positive/negative publicity surrounding the endorser have also been evaluated. The research results show that the use of relatively warm appearance female endorsers is significantly more effective for for-profit products whilst ‘warm’ appearance male endorsers are more effective for not-for-profit products. The gap between positive-negative publicity of the same endorser is significantly bigger for the for-profit products than for the not-for-profit. This suggests that the risk of negative publicity is more important for the endorsement process of for-profit products than for not-for-profit products.
    Keywords: Celebrity endorsement, negative publicity, not for-profit products
    Date: 2012–01
  8. By: Leahy, Eimear; Lyons, Seán; Walsh, Sharon
    Abstract: Past research into the determinants of appliance ownership has identified associations with socioeconomic characteristics of households. Few studies have examined the intensity with which different sorts of households use the appliances they have. This paper uses microdata to examine the factors influencing ownership and usage of electrical appliances in Irish households. We also consider the factors influencing the ownership of different cooker types, space and water heating systems and energy saving features. We find that appliance ownership and usage is related to the socio-economic characteristics of the household's chief income earner as well as household characteristics such as the type and age of accommodation, tenure and the number of bedrooms. The number of people living in the household has a positive association with both ownership and usage of electrical appliances. However, it does not increase ownership of energy saving features, with the exception of CFLs. The highest earning households are more likely to own electrical appliances but they do not necessarily use them more often, nor are they more likely to purchase energy saving features.
    Keywords: appliance ownership/Ireland
    Date: 2012–02
  9. By: Santamarmía, Lluís; Nieto, María Jesús; Miles, Ian
    Abstract: The ways in which manufacturing firms come to offer services to customers – servitisation or servicisation – are attracting considerable attention. This paper examines an innovation survey of Spanish firms in order to investigate one aspect of this phenomenon: the introduction of new or improved services by manufacturers. Specifically, the paper analyses the determinants of service innovations in manufacturers and determines whether they differ from those of product or process innovations in these same firms. The study finds that almost 20 percent of the firms in the sample have introduced such services in the recent past and that important differences exist between service and product (goods) innovations, with service innovations being particularly related to human resource development and closer links to customers. This suggests that service innovation by manufacturers has much in common with the innovation patterns detected in service sector firms. Intriguing differences across manufacturing sectors are also noted, with the lowest- and highest-tech sectors reporting more service innovations than the medium-tech sectors
    Keywords: Innovation; Manufacturing; Service; Servitisation;
    Date: 2012–02
  10. By: Matthew Gaertner; Sarah Sanya
    Abstract: This paper is an empirical analysis of competitiveness in the banking system of four out of the five East African Community (EAC) countries2. The results show that the degree of competition is low due to a combination of structural and socio-economic factors. By way of preview, the analysis ranks the countries in terms of banking sector competitiveness in the following order: Kenya, Tanzania, Uganda and Rwanda.
    Keywords: Banking systems , Competition , Cross country analysis , East Africa , Markets ,
    Date: 2012–01–26
  11. By: David Bartolini (Department of Economics, Università Politecnica delle Marche.); Alberto Gaggero (Department of Economics, University of Pavia)
    Abstract: This paper conducts an empirical analysis of the determinants of airline alliances. Well established airlines with large passengers' volumes are more likely to participate in an alliance and are also essential for alliance survivability. In line with this finding, older air-lines have a higher probability of being part of an alliance. Airlines operating with high load factors consider alliance participation as a significant alternative to fleet capacity expansion. As their market share grows, alliances become more appealing to airlines. Competitors' decision to enter an alliance tends to have a positive impact on alliance participation. The relatively similar magnitude and effect of the regressors' coefficients across different alliance choices, suggests that the airline's major decision is not to choose a specific alliance, but rather considering whether to enter into an alliance, as a possible strategy within its business model.
    Keywords: Discrete choice model, Oneworld, Sky Team, Star Alliance.
    JEL: C23 L10 L93
    Date: 2012–02
  12. By: Emin Dinlersoz (Bureau of the Census); Jeremy Greenwood (University of Pennsylvania)
    Abstract: Union membership displayed an inverted-U-shaped pattern over the 20th century, while the distribution of income sketched a U. A model of unions is developed to analyze these phenomena. There is a distribution of firms in economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union decides how many firms to organize and its members' wage rate. Simulation of the developed model establishes that skilled-biased technological change, which affects the productivity of skilled labor relative to unskilled labor, can potentially explain the above facts. Statistical analysis suggests that skill-biased technological change is an important factor in de-unionization.
    Keywords: Computers; Distribution of Income; Flexible Manufacturing; Mass Production; Numerically Controlled Machines; Panel-Data Regression Analysis; Relative Price of New Equipment; Skill-Biased Technological Change; Simulation Analysis; Union Coverage; Union Membership; Deunionization
    JEL: J51 J24 L23 L11 L16 O14 O33
    Date: 2012–02
  13. By: Roger Fouquet
    Abstract: The purpose of this paper is to estimate trends in income and price elasticities and to offer insights for the future growth in transport use, with particular emphasis on the impact of energy and technological transitions. The results indicate that income and price elasticities of passenger transport demand in the United Kingdom were very large (3.1 and -1.5, respectively) in the mid-nineteenth century, and declined since then. In 2010, long run income and price elasticity of aggregate land transport demand were estimated to be 0.8 and -0.6. These trends suggest that future elasticities related to transport demand in developed economies may decline very gradually and, in developing economies, where elasticities are often larger, they will probably decline more rapidly as the economies develop. Because of the declining trends in elasticities, future energy and technological transitions are not likely to generate the growth rates in energy consumption that occurred following transitions in the nineteenth century. Nevertheless, energy and technological transitions, such as the car and the airplane, appear to have delayed and probably will delay declining trends in income and price elasticity of aggregate land transport demand.
    Keywords: Energy Services, Demand, Transport, Economic Development, Rebound Effect.
    Date: 2012–02
  14. By: Kawakami, Momoko
    Abstract: This paper explores the process of creation of the netbook market by Taiwanese firms as an example of a disruptive innovation by latecomer firms. As an analytical framework, I employ the global value chain perspective to capture the dynamics of vertical inter-firm relationships that drive some firms in the chain to change the status quo of the industry. I then divide the process of the emergence of the netbook market into three consecutive stages, i.e. (1) the launch of the first-generation netbook by a Taiwanese firm named ASUSTeK, (2) the response of the two powerful platform leaders of the industry, Intel and Microsoft Intel, to ASUSTeK’s innovation, and (3) the market entry by another powerful Taiwanese firm, Acer, and explain how Taiwanese firms broke the Intel-centric market and tapped into the market-creating innovation opportunities that had been suppressed by the two powerful platform leaders. I also show that the creation of the netbook industry was an evolutionary process in which a series of responses by different industry players led to changes in the status quo of the industry.
    Keywords: Taiwan, Information services industry, Computer, Industrial technology, Marketing, Market share, Industrial management, Disruptive innovation, Latecomer firms, Global value chains, The PC industry
    JEL: L63 O51 O53
    Date: 2012–02
  15. By: Fikret Adaman; Yahya M. Madra
    Date: 2012–04
  16. By: Timothy F. Bresnahan; Jonathan D. Levin
    Abstract: Contractual theories of vertical integration derive firm boundaries as an efficient response to market transaction costs. These theories predict a relationship between underlying features of transactions and observed integration decisions. There has been some progress in testing these predictions, but less progress in quantifying their importance. One difficulty is that empirical applications often must consider firm structure together with industry structure. Research in industrial organization frequently has adopted this perspective, emphasizing how scale and scope economies, and strategic considerations, influence patterns of industry integration. But this research has paid less attention to contractual or organizational details, so that these two major lines of research on vertical integration have proceeded in parallel with only rare intersection. We discuss the value of combining different viewpoints from organizational economics and industrial organization.
    JEL: D23 L14 L22 M20
    Date: 2012–03
  17. By: Richard H. Steckel; William J. White
    Abstract: The role of twentieth-century agricultural mechanization in changing the productivity, employment opportunities, and appearance of rural America has long been appreciated. Less attention has been paid to the impact made by farm tractors, combines, and associated equipment on the standard of living of the U.S. population as a whole. This paper demonstrates, through use of a detailed counterfactual analysis, that mechanization in the production of farm products increased GDP by more than 8.0 percent, using 1954 as a base year. This result suggests that studying individual innovations can significantly increase our understanding of the nature of economic growth.
    JEL: N52 O30 Q16
    Date: 2012–03
  18. By: Caglayan, Mustafa; Filiztekin, Alpay
    Abstract: This paper examines the role of market structure on the persistence of price deviations from the LOP using monthly actual product prices of 47 items collected from three different types of markets in Istanbul over 1993:01-2008:12. After showing the importance of market structure on the distribution of relative prices, we implement threshold autoregressive models. We find significant differences in average threshold estimates across markets which we explain referring to differing menu costs in each market. Yet, we find no differences in average half-life estimates across markets. We argue that this is due to low search costs in Istanbul. Robustness checks verify our findings.
    Keywords: Law of one price; Nonlinearity; TAR models; Market segmentation; Menu and search costs
    JEL: E31 F30 C23
    Date: 2012–02–27
  19. By: Nathan Nunn
    Abstract: This article discusses the importance of accounting for cultural values and beliefs when studying the process of historical economic development. A notion of culture as heuristics or rules-of-thumb that aid in decision making is described. Because cultural traits evolve based upon relative fitness, historical shocks can have persistent impacts if they alter the costs and benefits of different traits. A number of empirical studies confirm that culture is an important mechanism that helps explain why historical shocks can have persistent impacts; these are reviewed here. As an example, I discuss the colonial origins hypothesis (Acemoglu, Johnson and Robinson, 2001), and show that our understanding of the transplantation of European legal and political institutions during the colonial period remains incomplete unless the values and beliefs brought by European settlers are taken into account. It is these cultural beliefs that formed the foundation of the initial institutions that in turn were key for long-term economic development.
    JEL: B52 N00
    Date: 2012–02
  20. By: Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: We use longitudinal data based on administrative archives from 1985 to 2002 to estimate the relationship between wages and firm size for Italy. Controlling for individual fixed effects we find that larger firms pay significantly higher wages, although the individual unmeasured ability component accounts for about one half of the uncovered size-wage premium. To reduce potential self-selection problems arising from endogenous job changes, we focus on a sample of workers displaced by plant closings. Using this sample, we confirm that larger firms pay higher wages in part for unmeasured workers’ abilities and in part for true size effects.
    Keywords: Firm Size, Wage Differentials, Panel Data, Exogenous Job Changes
    JEL: J41 M51 J45
    Date: 2012–01
  21. By: Palmberg, Johanna (The Ratio Institute)
    Abstract: This paper examines the effect of family ownership and control on executive compensation in listed firms during the period 2003-2008. The descriptive statistics show that CEOs in non-family-controlled firms have a significantly higher share of variable compensation than CEOs in family-controlled firms, they also receive remuneration in stock options relatively more often. The econometric analysis shows that family control and ownership concentration reduce CEO compensation whereas multiple-class shares increase the level of compensation. In line with the findings of previous research, firm size and performance are positively related to CEO compensation.
    Keywords: Corporate governance; executive compensation; family ownership
    JEL: G30 L20 L21 L22 L25
    Date: 2012–02–28

This nep-hme issue is ©2012 by Frederic S. Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.