A Simultaneous Equation Model of the Demand for Academic and Professional Journals

摘要

The objective of the project has been to investigate the determinants of journal demand (circulation) within a framework in which journal demand, price, quality, average cost, and size vary simultaneously and are explained by variables that are truly independent. A simultaneous equation model has been developed and this model has been estimated using data on 34 major economics journals. The results suggest the presence of simultaneity in the relationship between demand and price, and demand and quality. While a higher price tends to reduce journal demand (especially individual demand), higher demand also tends to reduce price. The latter is so because the economics journals industry is characterized by economies of scale, with higher-circulation journals experiencing lower average costs of production. These lower average costs enable journals with greater demand to charge lower prices. The demand-quality higher circulation levels, but also higher demand tends to increase journal quality. The project also develops and implements a procedure for measuring potential journal demand, which influences both journal demand and journal size.