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on Marketing |
| By: | Costas Arkolakis |
| Abstract: | I develop a new theory of marketing costs and introduce it into a model of trade with product differentiation and firm productivity heterogeneity. In this model, a firm enters a market if it makes profits by reaching a single consumer there and pays an increasing marginal cost to access additional consumers. This market penetration cost introduces an extensive margin of new consumers in firms' sales. I calibrate the key parameters of the model to match data on French firms from Eaton, Kortum and Kramarz, in particular the higher sales in France of firms that choose to export to more destinations. The model predicts that most firms do not export, and that a large proportion of firms that export in particular markets do so in small amounts. These predictions are in line with the French data, but together create a puzzle for models with a fixed cost of exporting, such as those of Melitz and Chaney. Looking at the comparative statics of trade liberalization, I find that the model predicts large increases in trade in goods with positive but little previous trade, in line with Kehoe and Ruhl. The model implies that these increases can contribute to new trade significantly more than the corresponding increases due to new exporters. |
| JEL: | F12 F15 L11 M3 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14214&r=mkt |
| By: | Rachel Griffith (Institute for Fiscal Studies and University College London); Lars Nesheim (Institute for Fiscal Studies) |
| Abstract: | <p><p>We use hedonic prices and purchase quantities to consider what can be learned about household willingness to pay for baskets of organic products and how this varies across households. We use rich scanner data on food purchases by a large number of households to compute household specific lower and upper bounds on willingness to pay for various baskets of organic products. These bounds provide information about willingness to pay for organic without imposing restrictive assumptions on preferences. We show that the reasons households are willing to pay vary, with quality being the most important, health concerns coming second, and environmental concerns lagging far behind. We also show how these methods can be used for example by stores to provide robust upper bounds on the revenue implication of introducing a new line of organic products. </p></p> |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:18/08&r=mkt |
| By: | Sanja Lutzeyer (Department of Economics, University of Stellenbosch) |
| Abstract: | This paper estimates a hedonic price function for Stellenbosch wines to determine the association between market value and different characteristics of these wines. In such a hedonic price function, the price of a bottle of wine is ascribed to the implicit value of its attributes. Besides contributing to both South African and international wine pricing literature, the benefits of developing a hedonic wine pricing model extend to numerous players in the wine industry. Consumers are provided with guidelines on how to utilize their wine purchasing budget more efficiently, while producers are able to use estimates of the function to guide future investment decisions. The hedonic price function estimated in this paper includes numerous ‘objective’ characteristics, appearing on the label of the bottle, as well as subjective characteristics in the form of expert wine ratings. In an effort to address possible heterogeneity of wine as a product, separate regressions are run for red and white wines. The estimation of the hedonic price equation shows that, in general, wine quality (as modelled by blind and sighted wine ratings) and age of the wine are relevant in accounting for price deviations from average red wine prices. Further, it is found that only limited numbers of red wine varieties and sub-districts of production significantly influence the average price of Stellenbosch red wines. For white wines, only sighted wine ratings as well as age of the wine were found to significantly account for deviations from average white wine prices. While blind wine ratings and white wine varieties were not found to significantly influence average white wine prices, certain regions of production where found to be relevant in accounting for deviations from average white wine prices. |
| Keywords: | Hedonic pricing, Wine, Stellenbosch, South Africa |
| JEL: | Q11 C13 C21 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers63&r=mkt |
| By: | Carlos Arango; Varya Taylor |
| Abstract: | Using the results of a survey on accepted means of payment, the authors examine merchant preferences and perceptions of retail payment reliability, risk, and costs; the share of each type of payment method over total sales; and the costs involved in accepting payments. Models are developed for each means of payment in order to determine how merchant characteristics may influence their responses. The authors find that the average transaction value, total transaction volume, and/or number of point-of-sale terminals influence merchant perceptions. The authors confirm that merchant preferences are determined by their perceptions and that the intensity of payment use is also important. Furthermore, the authors find that, aside from the initial decision to accept a payment method, merchants have little influence over the payment decisions made by consumers. These last two findings are indicative of the two-sided nature of payments. The marginal costs of accepting payment methods are also estimated and compared, and payment card processing fees are examined. |
| Keywords: | Bank notes |
| JEL: | E41 L2 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:08-12&r=mkt |
| By: | G. Carvalho, Pedro; Lourenço, Rui |
| Abstract: | Sport Tourism represents the knowledge and the group of practices where Sport and Tourism became interdependent. This overlapping area turns clearly at two levels that might be named by Sport Tourism Spectacle and Sport Tourism Practice. According to Pigeassou [9] the foundations of sport tourism do not consist purely of classifying sport tourism activities using categories employed in sport activities. In this article we provide a theoretical framework for the understanding of the market segment in Sport Tourism Practice, looking at their client behaviour typology (enthusiastic and casual), their motivations and high lightening the role this framework plays on the tourist destiny development. Furthermore we present some empirical results of a seminal experimental design. |
| Keywords: | Sport; Sport Tourism; Sport Tourism Practice; Sport Tourism Spectacle |
| JEL: | A12 L83 |
| Date: | 2008–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10096&r=mkt |