Farmland prices, structural breaks and panel data

Previous time series evidence has indicated that farmland prices and cash rents are not cointegrated, a finding at odds with the present value model of farmland prices. We argue that this failure to find cointegration may be due to low power of tests and to the presence of structural change representing a shifting risk premium on farmland investments. To accommodate this possibility, we use panel unit root and cointegration methods that are more powerful than conventional time series methods and allow for breaks in the cointegration relationship. Our results, based on a large panel covering 31 US states between 1960 and 2000, suggest that the present value model of farmland prices cannot be rejected. © Oxford University Press and Foundation for the European Review of Agricultural Economics 2007; all rights reserved.

Towards a resilience management framework for complex enterprise systems upgrade implementation

The lack of knowledge of how resilience management supports enterprise system (ES) projects accounts for the failure of firms to leverage their investments in costly ES implementations. Using a structured-pragmatic- situational (SPS) case study research approach, this paper reports on an investigation into the resilience management of a large utility company as it implemented an ES upgrade. Drawing on the literature and on the case study findings, we developed a process-based resilience management framework that involves three strategies (developing situation awareness, demystifying threats, and executing restoration plans) and four organisational capabilities that transform resilience management concepts into practices. We identified the crucial phases of ES upgrade implementation and developed indicators for how different strategies and capabilities of resilience management can assist managers at different stages of an ES upgrade. This research advances the state of existing knowledge by providing specific and verifiable propositions for attaining a state of resilience, the knowledge being grounded in the empirical reality of a case study. Moreover, the framework offers ES practitioners a roadmap to better identify appropriate responses and levels of preparedness.

Comparing bargaining solutions in the shadow of conflict: how norms against threats can have real effects

In many economic environments agents make costly and irreversible investments (in ``guns'') that may enhance their respective threat payoffs but also shrink the utility possibilities set. In such settings, with variable threats and a variable utility possibilities set, it becomes possible to rank different bargaining solutions in terms of efficiency. We compare bargaining solutions within a class in which the influence of the threat point on the bargaining outcome varies across solutions. Under symmetry, we find that the solution in which the threat point is least influential the equal sacrifice solution Pareto-dominates the other solutions. Since the equal sacrifice solution puts the least weight on the threat point, norms against threats (that can be seen in many seemingly rhetorical pronouncements in adversarial relations) can mitigate some of the costs of conflict and therefore have efficiency- enhancing effects.

Creating cycling-friendly environments for children: which micro-scale factors are most important? An experimental study using manipulated photographs

BACKGROUND: Increasing participation in transportation cycling represents a useful strategy for increasing children's physical activity levels. Knowledge on how to design environments to encourage adoption and maintenance of transportation cycling is limited and relies mainly on observational studies. The current study experimentally investigates the relative importance of micro-scale environmental factors for children's transportation cycling, as these micro-scale factors are easier to change within an existing neighborhood compared to macro-scale environmental factors (i.e. connectivity, land-use mix, …). METHODS: Researchers recruited children and their parents (n = 1232) via 45 randomly selected schools across Flanders and completed an online questionnaire which consisted of 1) demographic questions; and 2) a choice-based conjoint (CBC) task. During this task, participants chose between two photographs which we had experimentally manipulated in seven micro-scale environmental factors: type of cycle path; evenness of cycle path; traffic speed; traffic density; presence of speed bumps; environmental maintenance; and vegetation. Participants indicated which route they preferred to (let their child) cycle along. To find the relative importance of these micro-scale environmental factors, we conducted Hierarchical Bayes analyses. RESULTS: Type of cycle path emerged as the most important factor by far among both children and their parents, followed by traffic density and maintenance, and evenness of the cycle path among children. Among parents, speed limits and maintenance emerged as second most important, followed by evenness of the cycle path, and traffic density. CONCLUSION: Findings indicate that improvements in micro-scale environmental factors might be effective for increasing children's transportation cycling, since they increase the perceived supportiveness of the physical environment for transportation cycling. Investments in creating a clearly designated space for the young cyclist, separated from motorized traffic, appears to be the most effective way to increase perceived supportiveness. Future research should confirm our laboratory findings with experimental on-site research.

Environmental migration and capital mobility

Based on utility equalization, this paper considers a developing economy with labor migration. Pollution and capital taxes are imposed on producers in the polluted sector. The optimal policy combinations of capital taxes and pollution taxes for the host economy are examined. A zero capital tax is required for increasing mobility of capital to raise real GDP, while a larger than Pigovian pollution tax is needed for enhancing environmental amenities. The impacts on those two optimal tax rates are examined theoretically and numerically if foreign countries adopt higher environmental standards or if foreign countries impose tax credits on foreign investments.