Multi-criteria production theory: foundation of non-financial and sustainability performance evaluation

Multi-criteria production theory (MCPT) is a generalization of traditional production theories which has been developed in order to integrate concerns of modern management science and economics, in particular sustainability and environmental protection. Such as traditional production theory lays a foundation for cost (and revenue) theory, MCPT can be utilized to expand the knowledge regarding the theory and practice of non-financial performance evaluation, which is of major importance with distinct, conflicting objectives. Based on decision theory, the main idea behind MCPT is the capability to distinguish technologically determined inputs and outputs of a production system’s activity from its desired or undesired impacts on (artificial or natural) environments. The idea is formalized by multiple value functions. The paper clarifies the basic assumptions of MCPT in comparison to those of traditional production theories. For the special cases of linear and of monotonic value functions, two main theorems of MCPT are proven. Their application provides fruitful insights into some procedures and pitfalls of non-financial performance evaluation, especially those regarding ecological economics and data envelopment analysis. The main topics that are discussed address undesirable products and factors, hierarchies of performance evaluations, problems of non-monotonic value functions as well as the rationality of ‘technically inefficient’ production.     

Analyzing the dependences of multi-category purchases on interactions of marketing variables

We extend the usual specification of the multivariate probit model frequently used to analyze multi-category purchase incidence data by introducing interaction effects between marketing variables. Models are estimated by a Markov Chain Monte Carlo simulation method using 24,047 shopping visits made by a random sample of 1500 households in one specific grocery store over a one year period. Our data refer to a total of 25 food and non-food product categories and include socio-demographic household attributes in addition to purchases and marketing variables. Information criteria agree on the superiority of the extended specification. Estimation results demonstrate that many interaction effects are erroneously attributed to the main effects of marketing variables if one applies the usual specification instead. We derive managerial implications with respect to sales revenue by stochastic simulation. If managers base decisions on the usual specification in spite of its worse statistical performance, they run the risk to overestimate sales revenue increases due to sales promotion activities.     

DEALER INTERMEDIATION BETWEEN MARKETS

We develop a dynamic model of dealer intermediation between a monopolistic customer–dealer market and a competitive interdealer limit order market. Dealers face inventory constraints and adverse selection. We characterize the optimal quote setting and inventory management behavior for both markets in closed form and reveal how price setting in one market segment influences quote behavior in the other. The framework is used to explore market stability issues of the two‐tier market structure and delivers testable predictions about how the dispersion of retail prices is related to the state of the interdealer limit order book. Data from the European sovereign bond market is used to test for inventory related retail price dispersion.     

Rolf Arnold, Sigrid Nolda, Ekkehard Nuissl (Hg.): Wörterbuch der Erwachsenenpädagogik

Ohne Zusammenfassung     

Values with exogenous payments

The aim of cooperative game theory is to suggest and defend payoffs for the players that depend on a coalition function (characteristic function) describing the economic, social, or political situation. We consider situations where the payoffs for some players are determined exogenously. For example, in many countries, lawyers or real-estate agents obtain a regulated fee or a regulated percentage of the business involved. The aim of this article is to suggest and axiomatize two values with exogenous payments, an unweighted one and a weighted one.     

Moderation, contentment, work, and alms—A Buddhist household theory

The paper deals with household theory from the angle of Buddhist thought. We build on the Buddhist terms of tanha versus chanda to express Buddhist preferences and Buddhist household theory in terms of textbook microeconomic terms. We find that preferences of Buddhist (enlightened) people may differ from those of non-Buddhist people in a systematic manner. Among other hypotheses, we deduce that Buddhists work harder than non-Buddhists if we control for meditation time. We argue that any full-grown Buddhist economics (if it is to exist) needs to build on Buddhist preference and household theory, either as presented here or in a different form.     

Delinking of economic growth and materials turnover

National material flow analyses and materials balances are indispensable sources of information with respect to the operationalizalion of sustainable development. Both of these instruments are already employed in official statistics in Germany and Japan, and other countries—especially member slates of the European Union—are likely to follow suit. Because of the preparatory stages of work that have already been carried out, Austria is in an excellent position to assume a leading role in international concerted action. From 1970 to 1990 total materials flow through Austrian society has approximately increased by one third. As can be seen from changes in the amount of primary energy used during this period, economic growth in physical terms and value added in production decoupled slightly, and the same is true for the use of materials. Since 1970, materials input per unit of GDP (material intensity) decreased by 25%. This implies that relative gains in efficiency are compensated by the annual increases in the use of materials which, by and large, are caused by few yet massive ‘strategic’ material flows of steel, cement, wood, paper/pulp, sand, gravel and crushed stone. The empirical findings suggest that delinking of economic growth from the metabolism of human society should be discussed more carefully. The concept of ‘delinking’ involves two alternative perspectives of development differing from each other with respect to their ecological effects. The analysis may either focus upon absolute changes in materials throughput or on the relative changes of materials throughput per unit of output. It is strongly recommended, therefore, to distinguish clearly between relative and absolute productivity of resources. Branch analyses confirmed, once again, that the information contained in material indicators related to value‐added concepts is relatively insignificant when it comes to evaluation of the social ‘pressures upon the environment’.     

Nutzenpotenziale und Effekte betrieblicher Gesundheitsförderung

Research regarding workplace health promotion (WHP) frequently neglects the employees’ perspective. Due to that, assumptions regarding the effects of WHP for employees are typically based on experts’ opinions but not statements from the workforce. The present paper therefore exploratively investigates the effects of WHP as perceived by the staff. The results of problem-centred interviews with 19 employees in three organizations, and the four people there responsible for WHP show that potential effects of WHP from the employees’ perspective can be grouped in five areas: (1) prevention is facilitated, (2) cognitive and affective changes are possible, (3) physical effects are observed, (4) emotional effects can arise, and (5) WHP can lead to social effects. As WHP’s potential positive effects can be hindered in case the employees’ perspective is not sufficiently taken into account, the individuals’ expectations and aims should become more central in WHP design and research.     

Linking Food Security with Household’s Adaptive Capacity and Drought Risk: Implications for Sustainable Rural Development

In spite of green revolution and rapid economic growth, India’s vast population still suffers from hunger and poverty, especially in the rural areas. Moreover, drought adversely affects India’s economy by declining agricultural production and purchasing power. It also escalates rural unemployment which ultimately affects household food security. Our study investigated the food security of drought prone rural households in a broader context by linking the dimensions of food security with dimensions of climate change vulnerability. We used the primary data of 157 drought prone rural households of Odisha state in India for analysis. This study employed polychoric principal component analysis to construct an aggregate food security index. An ordered probit model was used to estimate the determinants of food security. The FSI showed that three-fourth of the respondents were facing food security issues with varying degrees. The estimates of ordered probit model indicated that joint family, education, migration and health insurance are key variables that determine food security, whereas drought adversely affected food security of rural households. Overarching strategies are required to effectively address food security issues in the wake of increased drought risk. This study provides an insight for policy makers in India and in similar south Asian countries who must consider food security in the light of drought.