The variance of the discrepancy distribution of rounding procedures,and sums of uniform random variables

When \(\ell \) probabilities are rounded to integer multiples of a given accuracy n, the sum of the numerators may deviate from n by a nonzero discrepancy. It is proved that, for large accuracies \(n \rightarrow \infty \), the limiting discrepancy distribution has variance \(\ell /12\). The relation to the uniform distribution over the interval \([-1/2, 1/2]\), whose variance is 1 / 12, is explored in detail.     

On the construction of approximate multi-factor designs from given marginals using the iterative proportional fitting procedure

Summary For multifactor designs based on linear models, the information matrix generally depends on a certain set of marginal tables created from the design itself. This note considers the problems of whether a set of marginal tables is consistent, in that a design exists that can yield them, and of calculating such a design when at least one does exist. The results are obtained by direct analogy with the problem of maximum likelihood estimation in longlinear models for categorical data.     

GROWTH IN THE SHADOWS: EFFECT OF THE SHADOW ECONOMY ON U.S. ECONOMIC GROWTH OVER MORE THAN A CENTURY

Taking a long‐term look at U.S. economic growth over 1870–2014, this paper focuses on the spillovers from the shadow or the unofficial economy to growth in the official sector. Shadow activities might spur or retard economic growth depending on their interactions with the formal sector and impacts on the provision of public goods. Nesting the analysis in a standard neoclassical growth model, we use a relatively new time series technique to estimate the short‐run dynamics and long‐run relationship between economic growth and its determinants. Results suggest that prior to World War II (WWII) the shadow economy had a negative effect on economic growth; however, post‐WWII the shadow economy was beneficial for growth. The sanding effect of the shadow economy in the earlier period is especially robust to alternate considerations of possible endogeneity and an alternate set of growth determinants. (JEL E26, O43, O51, K42)     

Transformation of China's sovereign wealth fund since the 2008‐2009 global crisis

China Investment Corporation (CIC) transformed its initial investment strategy of focusing mainly on the US financial sector during 2007‐2008 into a new strategy of diversified investments across geography and sectors since 2009. Massive financial losses and domestic political backlash during the global financial crisis of 2008 gave impetus to CIC's rethinking of strategy. In the midst of the crisis, CIC engineered a capacity‐building and reorganization exercise to reposition itself for a new strategy that has since allowed for more diversification of investments. A more receptive global investment climate for sovereign wealth funds has also aided CIC's efforts to present itself as a responsible global investor and facilitated its investments. Postcrisis, CIC's new strategy of diversification is characterized by continued investments in the financial sector, but with new investments increasingly directed to real sectors of energy, natural resources, and real estate in both developed and emerging economies. Notwithstanding a global recovery that is fraught with uncertainties, CIC's judicious timing in making diversified investments, and its attention to reducing risks and enhancing returns, have been rewarded by an impressive turnaround in performance since 2009. Going forward, the success and sustainability of the new strategy will be contingent on how well CIC can navigate domestic bureaucratic rivalry and the shifting climate of the international investment environment in the medium to long term. Ultimately, CIC's shareholder, the government of the People's Republic of China (PRC), holds the key to its future direction and goals. © 2012 Wiley Periodicals, Inc.     

The Economic Approach to European State Aid Control: A Politico-Economic Analysis

Since the mid-2000s, the European Commission has employed a so-called ‘more economic approach’ to European state aid control. Under this modified regime, the Commission checks not only whether a state aid has competition-distorting effects, but in addition, whether it enhances social welfare. This reform implies an extension of the Commission’s competences vis-à-vis the Member States as the Commission gets the power to prohibit national state aid regarded as socially wasteful. The Commission explains its reform with the necessity of giving state aid control a sound economic basis. This article, however, demonstrates that the more economic approach – somewhat paradoxically – is not based on a consistent economic view of public policy that would justify the aforementioned shift of competences to the supranational EU level. The economic-theoretical inconsistencies identified in this article may be used by policymakers to rethink some elements of current EU state aid policy.     

Tourist segments' justifications for behaving in an environmentally unsustainable way

Misalignment of pro-environmental beliefs and environmentally unsustainable vacation behaviour can cause psychological tension to tourists. They manage this tension by finding justifications for their behaviour, rather than changing their behaviour. A recent study has systematized such justification; this systematics is used in the present study to investigate the existence of tourist segment sharing justification patterns. A finite mixture model with concomitant variables is used to analyse 2785 survey responses. Three segments are identified. The government blamers express strong interest in the environmental sustainability of their vacation, but deny both their responsibility and ability to make a difference. The struggling seekers would not book their dream vacation if it was environmentally unfriendly, yet do not feel in control of reducing negative environmental impacts of their holiday, which they fully acknowledge. The impact neglecters also state they would not book their dream vacation if it was environmentally unfriendly, but their main justification for taking – potentially environmentally harmful – vacations is denial of the negative environmental consequences of tourism. The existence of these differences in justification patterns indicates different approaches could counteract each of these segment-specific beliefs by inducing cognitive dissonance, shown in other contexts to induce behavioural change. Advice on approaches is given.     

Pane e Cioccolata: The Impact of Native Attitudes on Return Migration

This paper addresses the link between native attitudes and return migration. We exploit the variation in xenophobia using information on media consumption by migrants in Italy. A widely documented crime provides a quasi‐experimental setting to identify the impact of Italian attitudes on migrants’ settlement intentions. Our results suggest a significant effect of anti‐immigrant attitudes on the intended duration of stay in the host country. The impact is more pronounced for low‐skilled migrants, which has consequences for how migration affects the long‐run convergence between sending and destination countries.