A robust ﬁnding in this paper is that extreme movements in stock prices and temperature are usually preceded by large average daily movements during the preceding three-day period. This suggests that investors might fashion a market timing strategy, switching from...
We examine the economic implications of pure bundling under the settings of monopoly and duopoly. We show that under monopoly and pure bundling of goods with independent demands, the bundled price is strictly less than the sum of the unbundled prices. In the setting...
We develop a simultaneous equations estimation framework to understand the interactions among generic entry, prices, and market shares. We base our estimates on a panel data sample of 40 brand-name drugs that first experienced generic competition during the period...
Damage estimation in mass torts involving hazardous or defective products is often complicated by the unknown time-profile of disease incidence or failure rate. Because these cases involve diseases with long latencies or involve products that fail after years of...
We have recently been involved in estimating a number of Asymptotically Ideal Model (AIM) forms on multiple data sets, and the experience has led us to consider the connection between theory and practice in some detail. The AIM has a number of claimed advantages that...
Curvature properties of the indirect utility function are shown to be necessary and sufficient for refutable behavioral postulates in the form of comparative static results, reciprocity relations, and restrictions on output and input responses for firm models under...
The innovation adoption literature has focused primarily on a producer’s decision of whether and how much to adopt. An equally pertinent question is when to adopt, because in the case of new technologies it often ‘pays to wait’ for more information....
Concern for the potentially harmful side effects of agricultural chemical inputs, especially pesticides, highlights the need to accurately determine the economic levels of their use. We consider three model specification issues: interaction of direct production inputs...
Using the Heckman approach, either in single-equation or multi-equation settings, general expressions are derived for calculating marginal effects and elasticities. In the conventional calculation of marginal effects, terms related to the change in the inverse of...
Risk preferences and technology are jointly estimated in the nonlinear mean standard deviation framework for a competitive firm model under price risk. A utility function is proposed that nests various risk preference structures and risk neutrality as empirically...
In many economic settings, individual decisions can be viewed as a sequential process where a dichotomous choice is followed by a continuous choice. These processes are frequently encountered in consumption demand studies, where the decision of whether or not to...
Just – Pope production functions have been traditionally estimated by feasible generalized least squares (FGLS). This paper investigates the small-sample properties of FGLS and maximum likelihood (ML) estimators in heteroscedastic error models. Monte Carlo experiment...
Existing computationally tractable duration models impose onerous restrictions on the hazard function’s shape. A theoretically consistent, tractable and yet flexible hazard function capable of exhibiting constant, monotonically increasing or decreasing....
Count data models have found a wide variety of applications not only in applied economics and finance but also in diverse fields ranging from biometrics to political science. Poisson and negative binomial (NB) models have been extensively used in count data analysis....
The two-step decision process for food-away-from-home (FAFH) consumption is empirically estimated using a generalization of the Heien and Wessells approach. Household information gathered by the National Panel Diary Group is used for the analysis. Marginal effects are...
Bovine somatotropin, a naturally-occurring hormone that enhances milk production in cows, can now be produced in large quantities using recombinant DNA technologies. Recent research suggests that the use of recombinant bovine somatotropin (rbST) could increase milk...
This study derives the qualitative properties of a household’s optimal consumption, family labor, hired labor and non-labor input choices under price and/or output risk through a Slutsky-type compensation without imposing any restriction on risk preference...
A method is developed to permit joint estimation of risk preference structure, degree of risk aversion, and production technology. The method is implemented using the Expo-Power utility function, which imposes no restrictions on risk preference structure. The...
We present an agricultural household model of consumption, storage, savings, and labor decisions and argue that food crop storage under price risk cannot be fully explained by “risk taking” or speculative behavior alone, as the commodity storage literature...
A model of divisible technology adoption under incomplete information dissemination and output uncertainty is developed. We identify economic and subjective factors affecting technology adoption and its intensity. Empirical estimation employs a mixed...
This paper presents a two-season model of a household’s production, consumption, labor supply, and storage decisions in an environment of output and price risk. The analytical results in this study are markedly different from those of models prevalent in the...
This paper studies an integrated model of production and savings under uncertainty in which production inputs and the amount of savings are jointly chosen. The analysis shows that if the agent’s risk preferences exhibit constant absolute risk aversion, then all...
A new utility function, which I call expo-power, is proposed that exhibits decreasing, constant, or increasing absolute risk aversion and decreasing or increasing relative risk aversion, depending on parameter values. Numerical analysis suggests that the expo-power...