Factor price

About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.

Factor price distortion and ecological efficiency: the role of institutional quality

Abstract: There is a lack of studies on whether market distortions inhibit the ecological efficiency. This study introduces the ecological efficiency based on the bootstrap-data envelopment analysis (DEA) method as the indicator of environmental performance in China, uses the transcendental logarithmic production function to calculate factor price distortion, and further identifies whether the factor price distortion has a negative impact on the ecological efficiency using the system generalized method of moments (GMM) method. Meanwhile, institutional quality is considered a threshold variable to examine the relationship between factor price distortion and ecological efficiency based on the threshold model. The result shows that factor price distortion significantly inhibits the improvement of ecological efficiency. Moreover, institutional quality is considered to be the threshold of factor price distortion affecting ecological efficiency. Further investigation of heterogeneity effect suggests that the inhibitory impact of factor price distortion on ecological efficiency is more significant in the central and western regions. This study provides a supplement to the study on environmental performance from the perspective of factor distortions and expands the framework of the influence mechanism of factor price distortion affecting ecological efficiency.

Price Setting and Market Structure: An Empirical Analysis of Micro Data

Abstract: Most empirical studies on price setting that use micro data focus on advanced industrial countries. In this paper we analyze the experience of an emerging economy, Slovakia, using a large micro-level dataset that accounts for a substantial part of the consumer price index (about 5 million observations). We find that market structure is an important determinant of pricing behavior. The effect of market structure on persistence of inflation results from two conflicting forces. Increased competition may reduce persistence by increasing the frequency of price changes. In contrast, higher competition may increase persistence through inertial behaviour induced by the strategic complementarity among price setters. In our case study, we find that the latter effects dominate. Indeed, the dispersion of prices is higher while persistence is lower in the non-tradeable sectors, suggesting that higher competition is not conducive to lower persistence. Furthermore, we find that the frequency of price changes depends negatively on the price dispersion and positively on the product-specific inflation. These results seem consistent with predictions of Calvo's staggered price model.

Price-band stabilization programs and risk: an application to the U.S. corn market

Abstract: The impacts of introducing a partial price stabilization scheme in the U.S. corn market are investigated by using a modified version of the bounded price variation model. Specifically, a model is developed and estimated that includes rational expectations of the first three central moments of the (truncated) equilibrium price distribution. The estimated model is used to simulate market equilibrium effects of introducing upper and lower price limits through a taxsubsidy scheme. The results show that corn producers are downside risk averse, and that market feedback effects of price stabilization can, at times, be more important than direct effects.

Regional Factor Price Convergence Across Four Major European Countries

Abstract: W EBBER D. J. and W HITE P. (2003) Regional factor price convergence across four major European countries, Reg. Studies 37 , 773-782. Neo-classical growth models predict that the free movement of goods and factors will result in the spatial convergence of output and an ensuing convergence of factor prices. Based on distribution free statistics, this paper presents an empirical examination of average factor prices for labour across 58 regions of the EU over the period 1980-94. Using methods of concordance and discordance that identify the presence of switching, persistence, stratification and convergence between individual and groups of regions, our results suggest swings in the trend between factor price convergence and factor price divergence, while switching, persistence and stratification characterize the sample's evolution. W EBBER D. J. et W HITE P. (2003) La convergence re gionale des prix des facteurs a travers quatre grands pays europeens, Reg. Studies 37 , 773-782. Les modeles de croissance neo- ...

Capacity-constrained price competition when unit costs differ

Abstract: This paper characterizes the set of NASH equilibria in a price setting duopoly in which firms have limited capacity, and in which unit costs of production up to capacity may differ. Assuming concave revenue and efficient rationing, we show that the case of different unit costs involves a tractable generalization of the methods used to analyze the case of identical costs. However, the supports of the two firms' equilibrium price distributions need no longer be connected and need not coincide. In addition, the supports of the equilibrium price distributions need no longer be continuous in the underlying parameters of the model. Two applications of our characterization are pursued. In the Kreps-Scheinkman model of capacity choice followed by Bertrand-Edgeworth price competition we show that, unlike in the case of identical costs, Cournot equilibrium capacity levels need not arise as subgame-perfect equilibria. The low-cost firm has greater incentive to price its rival out of the market than exists under Cournot behavior. Our second application is to the analysis of the effects of tariffs and quotas in a model in which a domestic market is supplied by a price setting duopoly consisting of a domestic and a foreign firm. We obtain a strong nonequivalence result.