Technological and Environmental Differences in the European Banking Industries

This paper analyzes the productive differences of banking among countries. It proposes a Malmquist type index that allows intercountry productivity differences to be broken down into pure technological differences and differences due to environmental effects. The most relevant feature of this index is its symmetry, since it avoids the problem of measurements being sensitive to the choice of the benchmark country. This index is used to explain the productivity gaps of banking industries across four major countries in Europe as well as the productivity gains that banks could obtain using alternative technologies or with different environments. An output distance function is defined and the stochastic frontier approach used to carry out the comparison.     

Do Harmonised Accounting Standards Lead to Harmonised Accounting Practices? An Empirical Study of IAS 39 Measurement Requirements in Some European Union Countries

The objective of this paper is to investigate the level of harmonisation for IAS 39 Financial Instruments: Recognition and Measurement and to identify if different levels of harmonisation are associated with company-specific factors. Based on Rahman et al. (2002) , we used the Jaccard (JACC) index to determine the level of harmonisation between IAS 39 and the financial reporting practice of a broad-based sample of European-listed companies in 2005. We applied regression analysis to identify companies' specific characteristics that affect the level of convergence of the reporting practice of financial instruments. The results of this study show a high level of harmonisation between accounting practices of European companies included in our sample and IAS 39.     

Interview with Nancy Reid

Nancy Reid was born in September 1952 in Niagara Falls, Canada. She graduated from the University of Waterloo with a Bachelor in Mathematics and a major in Statistics in 1974. She pursued her training in Statistics at the University of British Columbia (UBC) where she obtained a Master's in Applied Mathematics in 1976 and at Stanford University, where she graduated with a PhD in Statistics in 1979. After spending one year at Imperial College in London visiting Sir David Cox, she joined UBC as an Assistant Professor in the Department of Mathematics, where she had an important role in the creation of the Department of Statistics. In 1986, she moved to the University of Toronto, where she has been since then as a faculty in the Department of Statistics. Nancy has served as Chair of the Department between 1997 and 2002. Nancy's research in conditional inference, higher order asymptotics and composite likelihood has been influential in Statistics. Her outstanding contributions to Statistics were recognized nationally and internationally with many awards, including the President's Award of the Committee of Presidents of Statistical Societies (COPSS), Gold Medal awarded by the Statistical Society of Canada and Elected Foreign Associate of the National Academy of Sciences. She received the Doctor of Mathematics, Honoris Causa, University of Waterloo. Nancy served with distinction as Editor of the Canadian Journal of Statistics and President of the Statistical Society of Canada and President of the Institute of Mathematical Statistics. In 2014, she was appointed as Officer of the Order of Canada for her outstanding achievements, exemplary leadership and service to Canadians. The following conversation took place at the JSM 2016 in Chicago, on August 2 and 3, 2016.     

Differences in the economic performance of hotel-based and residential tourist destinations measured by their retail activity. Evidence from Spain

This paper compares the economic performance of holiday and residential tourism destinations in Spain, as measured by the level of retail activity, from a quantitative perspective. Differences between destinations are explored. A positive association between the economic development of destinations and their retail index was expected. However, no significant differences were found between residential/second-home tourism and holiday/leisure tourism destinations. The results obtained contradict the conventional assumptions that holiday destinations perform better economically than residential ones due to a higher level of tourist spending of people accommodated in hotels.     

Weak cognitive image of cultural tourism destinations

The current study aims to take an in-depth look at the perceived image of an inland cultural tourism destination. This destination has traditionally had a weak image, making it important to study the components of this image and the factors influencing it in order to identify the best strategies for improving the destination’s positioning with respect to its image. This research is part of the ATLAS Cultural Tourism Research Project, which focuses on the image of tourist destinations. The basic questionnaire prepared by ATLAS and applied in a number of different countries is the key element of the survey. The results obtained show the different influences of factors such as information sources (distinguishing between induced, organic and autonomous sources), previous visits to the destination and the places visited during the tourist’s stay on the overall image of the city. This research will help public institutions to project the image of destinations in their target markets using precise information channelled through the appropriate media. In global terms we try to contribute to the study of factors influencing image formation in the case of inland cities not yet on the tourist map, but whose potential resources could make them obvious cultural tourism destinations. From this perspective, the influence of cognitive attributes in forming the image, as well as the atmosphere the tourist experiences in the city as a psychological attribute, have been studied.     

The response of decentralized health services to demand uncertainty and the role of political parties in the Spanish public health system

Decentralization of the public health system should lead to health resources being managed more in line with citizens’ preferences. A decentralized system is more flexible in that it can better adapt resources to local needs. Moreover, if regional political parties have responsibility for public health policies, citizens will be able to elect those parties whose positions are more in line with their preferences. However, the role of political parties in public health management has received little attention in the literature. Focusing on the decision to provide reserve service capacity to deal with demand uncertainty, we analyse whether there have been differences between central and decentralized health authorities in Spain and whether these can be explained to some extent by the way different political parties manage the trade-off between being able to cover demand and the economic costs involved. Using data on Spanish public hospitals for the period 1996–2006, we model the difference between observed and potential output using an output-oriented distance function. Reserve capacity is modelled as a function of demand uncertainty, economic costs and the political party in power. We find differences in the way resources are managed by central government and decentralized authorities, even within the same political party. We also find differences between the decentralized authorities themselves according to the political party in power. We conclude that decentralization of public health in Spain has provided regional political authorities with greater flexibility to manage reserve capacity in line with citizens’ needs and preferences.     

Is the long-run underperformance of seasoned equity issues irrational? Evidence from Spain

We investigate if the long-run underperformance in the year after the issue of a sample of Spanish SEO firms is related to behavioural biases that lead investors to slowly adjust their pre-issue overoptimism. We also examine the existence of arbitrage costs that preclude mispricing from being corrected rapidly by sophisticated investors who act as arbitrageurs. Our findings support the contention that small SEO firms are overpriced at the time of the issue and suggest that their post-underperformance is related to arbitrage costs, where transaction costs play an important role although holding costs do not.     

The role of credentials in the Canadian labour market

We study the role of credentials or 'sheepskin effects' in the Canadian labour market. Sheepskin effects refer to increases in wages associated with the receipt of a degree after controlling for educational inputs such as years of schooling. We find strong evidence of sheepskin effects associated with graduation from high school, community college or trade school, and university. The importance of credentials increases with educational attainment, accounting for 30 per cent of the return to 16 years of schooling but more than half of returns above 16 years. Our evidence indicates that both years of schooling and degree completion influence earnings. JEL Classification: I2, J3
Le rôle des certificats dans le marché du travail au Canada. Les auteurs étudient le rôle des certificats ou des «effets de parchemin>> dans le marché du travail au Canada. Les effets de parchemin font référence aux augmentations de salaires associées à l'obtention d'un diplôme ou d'un grade après avoir pris en compte l'expérience éducationnelle comme les années d'éducation. On découvre des résultats probants pour ce qui est des effets de parchemin associés à l'obtention d'un diplôme d'école secondaire, de collège communautaire, d'école technique, et d'université. L'importance de la certification augmente avec le niveau d'instruction : elle compte pour 30 pourcent du rendement pour 16 années de scolarité mais pour plus de la moitié des rendements pour la scolarité au delà de ces premiers 16 ans. Les résultats indiquent que tant les années de scolarité que la certification comme telle ont un impact sur les gains.     

A Stochastic Minimax Model to Calculate Outstanding Claims

Correct estimation of the Outstanding Claims Reserve, an item that includes Incurred But Not Reported Claims (IBNR) as well as Incurred But Not Enough Reserved Claims (IBNER), is one of the most important issues currently facing actuarial science, due to its effect on the technical and financial stability of insurance companies. The purpose of this paper is to calculate the reserve in a decision-making environment, so that estimates can be made according to accurately defined and previously established rational criteria. Specifically, the estimating process enables a company’s particular situation to be taken into account, by incorporating its approach to the consequences arising from estimation errors into the model. The proposed calculation method gives rise to optimum link ratio estimators that can also be interpreted from a Bayesian perspective, with the advantages associated to such methodology.     

Structural Breaks and the Relationship between Barley and Wheat Futures Prices on the London International Financial Futures Exchange

Co-movement between futures prices can arise when commodities are substitutes. Counterintuitively, Dawson and White fail to find a significant long-run link between feed barley and wheat prices on the London International Financial Futures Exchange. This relationship is re-examined using  Johansen, Mosconi, and Nielsen's co-integration procedure that permits structural breaks. Results show evidence of co-integration and hence price discovery. There is a significant break in October 2000 following Common Agricultural Policy intervention price reductions, the barley–wheat futures market is perfectly integrated, and the barley price Granger-causes the wheat price. Modeling structural breaks in price relationships appears important.