Implications of Consumer Heterogeneity on Price Measures for Technology Goods

Using a new dataset on household purchases of personal computers (PCs), we document positive correlations between buyers' incomes and the prices they pay for seemingly identical PCs. These results suggest that ¯rms may be successful at separating the market and charging di®erent prices to consumers with di®erent levels of willingness to pay. We consider the implications of this kind of market separation for price and quality measurement via a theoretical model based on Mussa and Rosen (1978). The model suggests that, in markets like these, stan- dard methods that do not account for this heterogeneity can understate in°ation in a cost-of-living context. Consistent with the model, our empirical work shows that controlling for income yields indexes that show slower price declines than seen in standard indexes. This understatement of the cost-of-living measure likely mit- igates the unrelated upward biases found in recent studies by Bils (2009), Erickson and Pakes (2010), Broda and Weinstein (2010).

Price discrimination and business-cycle risk

A parsimonious theoretical model of second degree price discrimination suggests that the business cycle will affect the degree to which firms are able to price-discriminate between different consumer types. We analyze price dispersion in the airline industry to assess how price discrimination can expose airlines to aggregate-demand fluctuations. Performing a panel analysis on seventeen years of data covering two business cycles, we find that price dispersion is highly procyclical. Estimates show that a rise in the output gap of 1 percentage point is associated with a 1.9 percent increase in the interquartile range of the price distribution in a market. These results suggest that markups move procyclically in the airline industry, such that during booms in the cycle, firms can significantly raise the markup charged to those with a high willingness to pay. The analysis suggests that this impact on firms' ability to price-discriminate results in additional profit risk, over and above the risk that comes from variations in cost.

Consumer Heterogeneity and Markups over the Business Cycle: Evidence from the Airline Industry

We analyze price dispersion in the airline industry in order to determine the e®ects of the business cycle on markup variations. We ¯nd that the cycle can a®ect the degree to which airlines can price discriminate between di®erent consumer types, ultimately a®ecting the degree of price dispersion. Performing a ¯xed-e®ects panel analysis on 17 years of data covering two business cycles, we ¯nd that price dispersion is highly procyclical. Estimates show that a rise in the output gap of one percentage point increases the interquartile range by 1.6 percent. These results suggest that markups move procyclically in the airline industry, such that during booms in the cycle, the ¯rm can signi¯cantly raise the markup charged to those with high willingness to pay. Our analysis suggests that this impact on the ¯rm's ability to price discriminate imposes extra pro¯t risk to the ¯rm over and above cost variations.

Decomposing the foreclosure crisis: House price depreciation versus bad underwriting

We estimate a model of foreclosure using a data set that includes every residential mortgage, purchase-and-sale, and foreclosure transaction in Massachusetts from 1989 to 2008. We address the identification issues related to the estimation of the effects of house prices on residential foreclosures. We then use the model to study the dramatic increase in foreclosures that occurred in Massachusetts between 2005 and 2008 and conclude that the foreclosure crisis was primarily driven by the severe decline in housing prices that began in the latter part of 2005, not by a relaxation of underwriting standards on which much of the prevailing literature has focused. We argue that relaxed underwriting standards did severely aggravate the crisis by creating a class of homeowners who were particularly vulnerable to the decline in prices. But, as we show in our counterfactual analysis, that emergence alone, in the absence of a price collapse, would not have resulted in the substantial foreclosure boom that was experienced.

Medical Care Expenditure Indexes: A Comparison of Indexes using MarketScan and Pharmetrics Data

In recent years, healthcare service utilization has undergone several shifts, having potentially important implications for the cost of medical care.

An analysis of factors affecting affiliation in the Marine Corps Reserves

MBA Professional ReportThe purpose of this study is to examine key factors in Marine Corps Reserve turnover in order to better understand reservists’ decisions to affiliate in the United States Marine Corps. Across the Marine Force Reserve there are communities, occupational fields, and grades with persistent manning shortfalls in non–obligor populations. Non– obligor reservists are those who serve at their own discretion, with each individual reservist having well–developed rationale and reasons for affiliating with a reserve unit. Monetary incentives are the primary stimulus employed to prompt reservists to affiliate and fill billets in units where there are persistent shortfalls. Money has had a positive impact, but the utilization of monetary incentives is not based upon a deep understanding of the reservists’ underlying motivations. This study explores individual non–obligor reservist motivations and rationales for affiliating to provide initial insights and a framework for future research. This study conducted a conceptual review of academic and military literature and six semi–structured telephone interviews in order to develop a predictive conceptual model of USMCR affiliation, allowing for more efficient targeting of retention methods and the development of non–monetary incentives.http://archive.org/details/annalysisoffacto1094544683Outstanding ThesisLieutenant Commander, United States NavyLieutenant, United States NavyCaptain, United States Marine CorpsApproved for public release; distribution is unlimited

Bottom-up Photonic Crystal Lasers

The directed growth of III–V nanopillars is used to demonstrate bottom-up photonic crystal lasers. Simultaneous formation of both the photonic band gap and active gain region is achieved via catalyst-free selective-area metal–organic chemical vapor deposition on masked GaAs substrates. The nanopillars implement a GaAs/InGaAs/GaAs axial double heterostructure for accurate, arbitrary placement of gain within the cavity and lateral InGaP shells to reduce surface recombination. The lasers operate single-mode at room temperature with low threshold peak power density of ~625 W/cm^2. Cavity resonance and lasing wavelength is lithographically defined by controlling pillar pitch and diameter to vary from 960 to 989 nm. We envision this bottom-up approach to pillar-based devices as a new platform for photonic systems integration