This paper examines whether there is an ‘insular rent’ for Spanish hotels. The authors look at whether the hotels located in the Balearic and Canary Islands establish higher prices once quality has been controlled. They use quantile regression because it has informational advantages, given that independent variable effects are not constant along the hotel price distribution. The main result is that, once quality is taken into account, it seems there is a positive rent for island hotels. However, this rent is highly related to a hotel brand name effect. It seems that the hotel brand name reduces consumer information asymmetry problems by signalling higher quality standards or reducing the variance in the quality of a hotel given its ex ante known characteristics.
BaileyR.BallS. (2006), ‘An exploration of the meanings of hotel brand equity’, The Service Industries Journal, Vol 26, No 1, pp 15–38.
6.
BakerG.P.HubbardT.N. (2003), ‘Make versus buy in trucking: Asset ownership, job design, and information’, American Economic Review, Vol 93, No 3, pp 551–572.
7.
BarneyJ. (1986), ‘Strategic factor markets: Expectations, luck, and business strategy’, Management Science, Vol 32, No 10, pp 1231–1241.
8.
BarneyJ. (1991), ‘Firm resources and sustained competitive advantage’, Journal of Management, Vol 17, No 1, pp 99–120.
9.
GonzálezBarroso M.RuizFlores D. (2006), ‘La competitividad internacional de los destinos turísticos: Del enfoque macroeconómico al enfoque estratégico’, Cuadernos de Turismo, No 17, pp 7–24.
10.
BarzelY. (1982), ‘Measurement cost and the organization of markets’, Journal of Law and Economics, Vol 25, pp 27–48.
11.
BuchinskyM. (1994), ‘Changes in the US wage structure, 1963–1987: Application of quantile regression’, Econometrica, Vol 62, No 2, pp 405–458.
12.
BuchinskyM. (1998), ‘The dynamics of changes in the female wage distribution in the USA: A quantile regression approach’, Journal of Econometrics, Vol 13, pp 1–30.
13.
CarltonD.W.PerloffJ.W. (1994), Modern Industrial Organization, 2nd edn, Harper Collins, New York.
14.
ConnerK.R.PrahaladC.K. (1996), ‘A resource-based theory of the firm: Knowledge versus opportunism’, Organization Science, Vol 7, No 5, pp 477–501.
15.
EganD.J.NieldK. (2000), ‘Towards a theory of intraurban hotel location’, Urban Studies, Vol 37, No 3, pp 611–621.
16.
EysterJ.J. (1988), The Negotiation and Administration of Hotel and Restaurant Management Contracts, 3rd edn, Cornell University School of Hotel Administration, Ithaca, NY.
17.
BarcalaFernández M.González-DíazM. (2006), ‘Brand equity in the European fruit and vegetable sector: A transaction cost approach’, International Journal of Research in Marketing, Vol 23, No 1, pp 31–44.
GreifA. (1993), ‘Contract enforceability and economic institutions in early trade: The Maghribi traders’ coalition’, American Economic Review, Vol 83, No 3, pp 525–548.
20.
HolmströmB.MilgromP. (1994), ‘The firm as an incentive system’, American Economic Review, Vol 84, No 4, pp 972–991.
21.
HörnerJ. (2002), ‘Reputation and competition’, American Economic Review, Vol 92, No 3, pp 644–663.
KoenkerR.BassetG. (1982), ‘Robust test for heteroscedasticity based on regression quantiles’, Econometrica, Vol 50, No 1, pp 43–61.
30.
KrantonR. (2003), ‘Competition and the incentive to produce high quality’, Economica, Vol 70, pp 385–404.
31.
LandonS.SmithC.E. (1998), ‘Quality expectations, reputation and price’, Southern Economic Journal, Vol 63, No 3, pp 628–647.
32.
MahoneyJ.T.PandianJ.R. (1992), ‘The resource-based view within the conversation of strategic management’, Strategic Management Journal, Vol 13, No 5, pp 363–380.
33.
MilgromP.RobertsJ. (1986), ‘Price and advertising signals of product quality’, Journal of Political Economics, Vol 94, pp 796–821.
34.
MilgromP.RobertsJ. (1992), Economics, Organization and Management, Prentice-Hall International Editions, Homewood, IL.
35.
MontgomeryC.WernerfeltB. (1988), ‘Diversification, Ricardian rents and Tobin's q’, RAND Journal of Economics, Vol 19, No 4, pp 623–632.
36.
NelsonR. (1991), ‘Why do firms differ, and how does it matter?’, Strategic Management Journal, Vol 12, Winter Special Issue, pp 61–74.
37.
NollJ. (2004), ‘Comparing quality signals as tools of consumer protection. Are warranties always better than advertisements to promote higher product quality?’, International Review of Law and Economics, Vol 24, pp 227–239.
38.
PenroseE.T. (1959), The Theory of the Growth of the Firm, Oxford University Press, Oxford.
39.
PeterafM.A. (1993), ‘The cornerstones of competitive advantage’, Strategic Management Journal, Vol 14, No 3, pp 179–191.
40.
ShapiroC. (1983), ‘Premiums for high quality products as returns to reputations’, Quarterly Journal of Economics, Vol 98, pp 659–679.
41.
ShapiroC.StiglitzJ.E. (1984), ‘Equilibrium unemployment as a worker discipline device’, American Economic Review, Vol 74, pp 433–444.
42.
TiroleJ. (1988), The Theory of Industrial Organization, MIT Press, Cambridge, MA.
43.
Turespaña (2004), Guía Oficial de Hoteles de España 2004. Edición Profesional, Secretaría de Estado de Comercio y Turismo, Ministerio de Economía, Ediciones Informatizadas, Madrid.
44.
Turespaña (2005), Guía Oficial de Hoteles de España 2005. Edición Profesional, Secretaría de Estado de Comercio y Turismo, Ministerio de Economía, Ediciones Informatizadas, Madrid.
45.
WernerfeltB. (1984), ‘A resource-based view of the firm’, Strategic Management Journal, Vol 5, No 2, pp 171–180.
46.
WernerfeltB. (1995), ‘The resource-based view of the firm: Ten years after’, Strategic Management Journal, Vol 16, No 3, pp 171–174.
47.
WilliamsonE.O. (1985), The Economics Institutions of Capitalism: Firms, Markets. Relational Contracting, The Free Press, New York.
48.
WilliamsonE.O. (1991), ‘Comparative economic organization: The analysis of discrete structural alternatives’, Administrative Science Quarterly, Vol 36, pp 269–296.
49.
WilliamsonO.E. (1996), The Mechanisms of Governance, Oxford University Press, New York.
