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## Über dieses Buch

Empirical Studies In Applied Economics presents nine previously unpublished analyses in monograph form. In this work, the topics are presented so that each chapter stands on its own. The emphasis is on the applications but attention is also given to the econometric and statistical issues for advanced readers. Econometric methods include multivariate regression analysis, limited dependent variable analysis, and other maximum likelihood techniques. The empirical topics include the measurement of competition and market power in natural gas transportation markets and in the pharmaceutical market for chemotherapy drugs. Additional topics include an empirical analysis of NFL football demand, the accuracy of an econometric model for mail demand, and the allocation of police services in rural Alaska. Other chapters consider the valuation of technology patents and the determination of patent scope, duration, and reasonable royalty, and the reaction of financial markets to health scares in the fast-food industry. Finally, two chapters are devoted to the theory and testing of synergistic health effects from the combined exposure to asbestos and cigarette smoking.

## Inhaltsverzeichnis

### Chapter 1. The Revealed Market Power of a Natural Gas Pipeline

Abstract
A natural gas pipeline operates in a regulated market environment in which transportation rates are set by regulators. Transportation rates are set using a fixed plus variable changing scheme in order to achieve a revenue path that covers the cost of providing service. Regulators have allowed pipelines to discount their rates from the maximum allowed by regulation in order to meet the competition in the market place. While isolated incidents exists, full deregulation of the natural gas transportation market has not been allowed by regulators. The discounting behavior of a pipeline in a regulated environment provides indirect evidence of the competitiveness in the market place.
Jeffrey A. Dubin

### Chapter 2. The Demand for NFL Football

Abstract
This chapter considers the demand for NFL football. Football demand is unusual as compared with many goods and services. Rather than market clearing at competitive price levels or limited demand induced by monopoly pricing, the equilibrium position for many football teams is one of excess demand. Football attendance is characterized by excess demand and generally tight market. A theory of Becker (1991) helps explain the demand for football. Becker’s theory is that demand in some situations depends on social interaction and the size of the crowd. DeSerpa (1994) has adapted this theory for NFL football and other situations where the crowd composition is as important as the crowd size. Using data from 1995 through 1999 for all NFL teams during their regular season, I construct an econometric model of the demand for NFL football. I use this model to test the Becker/DeSerpa theory and conclude that the demand curve slopes upward in the relevant range as anticipated by the theoretical model. The next section of this chapter discuss NFL football demand. In Section 2.3, I discuss bandwagons, social influences, and group demand behavior. In Section 2.4, I discuss the Becker model and DeSerpa’ extensions. Section 2.5 presents the econometric model while Section 2.6 provides conclusions.
Jeffrey A. Dubin

### Chapter 3. Detecting and Measuring Shifts in the Demand for Direct Mail

Abstract
This chapter evaluates the forecast accuracy of a structural econometric demand model for direct mail in Canada. Direct mail also known as advertised admail is used to provide advertising to consumers through the mail system. My original model was developed in March 1986 and was based on the period ending January 1996 using twelve years of historical monthly data. A complete discussion of the original regression model “original” is provided in Dubin (1998). In this chapter, I update the regression results for the April 1989 through January 1996 period “revised” and provide new results from twenty additional monthly observations for the period of February 1996 through September 1997 “updated”.
Jeffrey A. Dubin

### Chapter 4. Valuation of a Technology Patent-Scope, Duration, and Royalty

Abstract
The owner of a patent receives value from his patent in several ways. First, the patent owner can exploit the patent themselves to the legal exclusion of others. Second, the patent owner may sell all rights to the patented invention. Third, he may license the patent to others. The value of the patent depends on several factors including its scope of application (economic, technological, and legal), its duration of application (legally limited to a fixed period of time but often constrained by non-infringing superior substitutes, and by its royalty or profit rate. The value of a patent to its owner is clearly constrained by the availability of substitutes. Substitutes limit the value of the patent by affecting the scope, duration, and royalty a patent owner may expect to receive. The determination of these influences on a particular patent is hardly ever a generic exercise. More often than not the value of a patent is determined on a case by case basis.
Jeffrey A. Dubin

### Chapter 5. Statistical Analysis of the Additive and Multiplicative Hypotheses of Multiple Exposure Synergy for Cohort and Case-Control Studies

Abstract
In epidemiological studies, where there are multiple causes of a particular disease, the issue arises as to whether the multiple causes have a synergistic relationship so that their combined effect is both greater than that of either activity alone, and greater than what one would expect by the sum of their individual risk contributions. Two hypotheses are frequently tested. The first hypothesis states that when the sources of disease act independently, the relative risk of disease, given exposure, is an additive relationship. Thus, the relative risk of dying from cause A adds to the relative risk of dying from cause B to determine the combined relative risk of dying when exposed to both A and B. A second hypothesis states that the relationship between disease and the two causal factors is multiplicative. In this case, the combined risk is the product of the individual risks. Of course synergism is itself a concept that is model dependent. For instance, a lack of synergism in a logit model of risk, as demonstrated by the statistical insignificance of an interaction term, leads to a multiplicative model of relative risk. Consider the following example. Suppose that the probability of dying from a disease depends on two factors, A and B. Let δA denote exposure to A, and δB denote exposure to B.Suppose further that the probability of dying is logistic and given by:
$$P\left[ {D|{\delta_A},{\delta_B}} \right] = 1/\left( {1 + {e^{{ - \left( {{X_0}{\beta_0} + {\delta_A}{X_A}{\beta_A} + {\delta_B}{X_B}{\beta_B} + {\delta_A}{\delta_B}{X_C}} \right)}}}} \right)$$
where XA, XB, XC are vectors of explanatory factor, and β are true but unknown coefficient vectors.
Jeffrey A. Dubin

### Chapter 6. Tests of the Additive and Multiplicative Hypotheses of Multiple Exposure

Abstract
In this chapter, I consider the possible synergistic relationship between tobacco smoking and asbestos exposure. Asbestos refers to a group of naturally occurring flexible fibers that may be separated and woven. There are two major types of asbestos. The first type is amphibole fibers and appears commercially as amosite and crocidolite. The second type is chrysotile. Studies have demonstrated that amphibole fibers are much more dangerous to humans than chrysotile fibers. The fibers are resistant to heat and fire and do not conduct electricity. Asbestos fibers break easily if separated from their bonded finished products and can turn into dust particles that float in the air or stick to clothing.
Jeffrey A. Dubin

### Chapter 7. Concentration and Competition in the Chemotherapy Drug Market

Abstract
The pharmaceutical industry is comprised of companies that discover and sell drugs that require a doctor’s prescription. The pharmaceutical industry ranks among the top industries in the United States in sales and research and development. This chapter considers competition in this industry and investigates the relationship between market structure, patent protection, and concentration.
Jeffrey A. Dubin

### Chapter 8. The Allocation of Police Services in Rural Alaska

Abstract
In this chapter I examine whether the State of Alaska allocates scarce police resources in a race-based manner. My analysis explores this hypothesis by developing an econometric model to explain the provisions of police services in rural Alaska.
Jeffrey A. Dubin

### Chapter 9. Financial Market Reaction to the Fast Food Hamburger Health Scare of 1993

Abstract
In 1993 a bacteria epidemic killed several children in the Pacific Northwest. The bacteria was a virulent strain of E. coli and was traced to undercooked hamburgers at Jack-in-the-Box restaurants. The outbreak was the largest and most serious for E. coli with a total of 400 confirmed or probable instances. Ultimately the tainted hamburgers forced 125 people to be admitted to a hospital and led to kidney failure in 29 people.
Jeffrey A. Dubin

### Backmatter

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