Real estate markets and the macroeconomy: a dynamic coherence framework

This paper analyzes the dynamic interactions between real estate markets, in the US and the UK and their macroeconomic environments. We apply a new approach based on a dynamic coherence function (DCF) to study these interactions bringing together different real estate markets (the securitized market, the commercial market and the residential market). The results suggest that there is a common trend that drives the different real estate markets in the UK and the US, particularly in the long run, since they have a similar shape of the DCF. We also find that, in the US, wealth and housing expenditure channels are very conductive during real estate crises. However, in the UK, only the wealth effect is significant as a transmission channel during real estate market downturns. In addition, real estate markets in the UK and the US react differently to institutional shocks. This brings some insights on the conduct of monetary policy in order to avoid disturbances in real estate markets.

Lord Kelvin’s atmospheric electricity measurements

Lord Kelvin (William Thomson) made important contributions to the study of atmospheric elec- tricity during a brief but productive period from 1859–1861. By 1859 Kelvin had recognised the need for “incessant recording” of atmospheric electrical parameters, and responded by inventing both the water dropper equaliser for measuring the atmospheric potential gradient (PG), and photographic data logging. The water dropper equaliser was widely adopted internationally and is still in use today. Following theoretical consid- erations of electric field distortion by local topography, Kelvin developed a portable electrometer, using it to investigate the PG on the Scottish island of Arran. During these environmental measurements, Kelvin may have unwittingly detected atmospheric PG changes during solar activity in August / September 1859 associated with the “Carrington event”, which is interesting in the context of his later statements that solar magnetic influ- ence on the Earth was impossible. Kelvin’s atmospheric electricity work presents an early representative study in quantitative environmental physics, through the application of mathematical principles to an environmental problem, the design and construction of bespoke instrumentation for real world measurements and recognising the limitations of the original theoretical view revealed by experimental work

Analysis and modeling of active occupancy of the residential sector in Spain: an indicator of residential electricity consumption

The growing energy consumption in the residential sector represents about 30% of global demand. This calls for Demand Side Management solutions propelling change in behaviors of end consumers, with the aim to reduce overall consumption as well as shift it to periods in which demand is lower and where the cost of generating energy is lower. Demand Side Management solutions require detailed knowledge about the patterns of energy consumption. The profile of electricity demand in the residential sector is highly correlated with the time of active occupancy of the dwellings; therefore in this study the occupancy patterns in Spanish properties was determined using the 2009–2010 Time Use Survey (TUS), conducted by the National Statistical Institute of Spain. The survey identifies three peaks in active occupancy, which coincide with morning, noon and evening. This information has been used to input into a stochastic model which generates active occupancy profiles of dwellings, with the aim to simulate domestic electricity consumption. TUS data were also used to identify which appliance-related activities could be considered for Demand Side Management solutions during the three peaks of occupancy.

How do markets manage water resources? An experiment

We experimentally test how a private monopoly, a duopoly and a public utility allocate water of differing qualities to households and farmers. Most of our results are in line with the theoretical predictions. Overexploitation of the resources is observed independently of the market structure. Stock depletion for the public utility is the fastest, followed by the private duopoly and private monopoly. On the positive aspects of centralized public management, we find that the average quality to price ratio offered by the public monopoly is substantially higher than that offered by the private monopoly or duopoly.

Electricity use in the commercial kitchen

Academic and industrial literature concerning the energy use of commercial kitchens is scarce. Electricity consumption data were collected from distribution board current transformers in a sample of fourteen UK public house-restaurants. This was set up to identify patterns of appliance use as well as to assess the total energy consumption of these establishments. The electricity consumption in the selected commercial kitchens was significantly higher than current literature estimates. On average, 63% of the premises’ electricity consumption was attributed to the catering activity. Key appliances that contributed to the samples average daily electricity consumption of the kitchen were identified as refrigeration (70 kWh, 41%), fryers (11 kWh, 13%), combination ovens (35 kWh, 12%), bain maries (27 kWh, 9%) and grills (37 kWh, 12%). Behavioural factors and poor maintenance were identified as major contributors to excessive electricity usage with potential savings of 70% and 45% respectively. Initiatives are required to influence operator behaviour, such as the expansion of mandatory energy labelling, improved feedback information and the use of behaviour change campaigns. Strict maintenance protocols and more appropriate sizing of refrigeration would be of great benefit to energy reduction.

Buyer–seller interaction in experimental spatial markets

We report results from experimental spatial markets with endogenous buyer location on a discrete version of Hotelling's linear city. Buyer locations favor more often the hypothesis of transportation cost minimization than that of strategic location aimed at increasing price competition between sellers. However, the latter of the two hypotheses receives systematic support too. Differentiation by seller-subjects is substantially less than the theory would predict for the specific framework used. Our results suggest that location strategies adopted by subjects can be seen as a rational process favoring conservative product design and spatial agglomeration of economic activities.

Endogenous retailer preferences in intermediate good markets

We model strategic interaction in a differentiated input market as a game among two suppliers and n retailers. Each one of the upstream firms chooses the specification of the input which it will offer.Then, retailers choose their type from a continuum of possibilities. The decisions made in these two first stages affect the degree of compatibility between each retailer's ideal input specification and that of the inputs offered by the two upstream firms. In a third stage, upstream firms compete setting input prices. Equilibrium may be of the two-vendor policy or of the technological monopoly type.

Controlling market power of vertically integrated firms in electricity networks: demand response of aggregator agents

This article reports the results of an experiment that examined how demand aggregators can discipline vertically-integrated firms - generator and distributor-retailer holdings-, which have a high share in wholesale electricity market with uniform price double auction (UPDA). We initially develop a treatment where holding members redistribute the profit based on the imposition of supra-competitive prices, in equal proportions (50%-50%). Subsequently, we introduce a vertical disintegration (unbundling) treatment with holding-s information sharing, where profits are distributed according to market outcomes. Finally, a third treatment is performed to introduce two active demand aggregators, with flexible interruptible loads in real time. We found that the introduction of responsive demand aggregators neutralizes the power market and increases market efficiency, even beyond what is achieved through vertical disintegration.

Adaptive behavior by single-product and multiproduct price setting firms in experimental markets

We focus on the learning dynamics in multiproduct price-setting markets, where firms use past strategies and performance to adapt to the corresponding equilibrium.

The level of compliance with the International Code of marketing of breast-milk substitutes: does it matter to stock markets?

The present paper explores, theoretically, and empirically, whether compliance with the International Code of marketing of breast-milk substitutes impacts on financial performance measured by stock markets. The empirical analysis, which considers a 20-year period, shows that stock markets are indifferent to the level of compliance by manufacturers with the International Code. Two important issues emerge from this result. Based on our finding that financial performance as measured by stock markets cannot explain the level of compliance, the first issue refers to what alternative types of mechanisms drive manufacturers who comply the least with voluntary codes such as the International Code. Conversely, from our finding that stock markets do not reward the most compliant, the second issue raised is an inherent weakness of stock markets to fully incorporate social and environmental values.

Nonlocal office investors: anchored by their markets and impaired by their distance

Nonlocal investors purchase and sell investment property in a distant metropolitan area. In this study, we identify capital value underperformance for nonlocal investors on both sides of the transaction, when they purchase and when they sell. The commercial real estate transactions data include a national sample of office property occurring in more than 100 U.S. markets. Using propensity-score matched sample to control for selection bias, we find that nonlocal investors overpay on the purchase by an estimated 13.8 % and sell at an estimated 7 % discount. These disadvantages relative to local investors expand with the geographic distance separating investor and asset. Nonlocal investors fundamentally overvalue similar assets sold to each other relative to assets transacted between locals, and are less patient as sellers. The positive bias in overpayment is directly tied to office rent differentials between the asset and investor markets.

The STRATADAPT scale: a measure of marketing strategy adaptation to international business markets

Purpose – The development of marketing strategies optimally adjusted to export markets has been a vitally important topic for both managers and academics for about five decades. However, there is no agreement in the literature about which elements integrate marketing strategy and which components of domestic strategies should be adapted to export markets. The purpose of this paper is to develop a new scale – STRATADAPT. Design/methodology/approach – Results from a sample of small and medium-sized industrial exporting firms support a four-dimensional scale – product, promotion, price, and distribution strategies – of 30 items. The scale presents evidence of composite reliability as well as discriminant and nomological validity. Findings – Findings reveal that all four dimensions of marketing strategy adaptation are positively associated with the amount of the firm's financial resources allocated to export activity. Practical implications – The STRATADAPT scale may assist managers in developing better international marketing strategies as well as in planning more accurate and efficient marketing programs across markets. Originality/value – This study develops a new scale, the STRATADAPT scale, which is a broad measure of export marketing strategy adaptation.