A component model for dynamic correlations

We propose a model of dynamic correlations with a short- and long-run component specification, by extending the idea of component models for volatility. We call this class of models DCC-MIDAS. The key ingredients are the Engle (2002) DCC model, the Engle and Lee (1999) component GARCH model replacing the original DCC dynamics with a component specification and the Engle et al. (2006) GARCH-MIDAS specification that allows us to extract a long-run correlation component via mixed data sampling. We provide a comprehensive econometric analysis of the new class of models, and provide extensive empirical evidence that supports the model’s specification.     

Selecting and fitting graphical chain models to longitudinal data

The aim of this paper is to demonstrate how graphical chain models can be used as effective tools in life course research focusing in particular on models for longitudinal prospective data. The substantive research question focuses on whether young motherhood is a pathway through which socio-economic disadvantage in childhood is related to poor self-reported health in adulthood among the 1970 British birth cohort. By breaking down large multivariate systems into simpler more tractable subcomponents and analysing them via local regressions, graphical models help the understanding of complicated life course processes, show the intermediate relationships between predictors, and aid the understanding of the mechanisms through which potential confounding and mediating factors affect the outcome of interest.     

Assessment and development centers: judgment biases and risks of using idiographic and nomothetic approaches to collecting information on people to be evaluated and trained in organizations

Assessment center and development center are two procedures that organizations can use in order to evaluate and train people. They make use of different methods and techniques, some (i.e. interviews) descending from the so called idiographic (or clinical) approach, and some (i.e. standardized instruments) descending from the so called nomothetic (or psychometric) approach. The idea is that different methods and techniques allow assessors and decision makers to collect as much information as possible, in order to come to an integrated judgment of people to be evaluated. Regarding this idea, psychological research has already discovered that it is not the amount of information collected that makes the difference between expert and non-expert assessors and decision makers. Besides, too much information is difficult to manage; and while it increases the confidence of assessors and decision makers about their judgments, it unfortunately does not increase their accuracy as well, since relevant information is mixed with irrelevant one and this makes it difficult to decide which one to consider and which one not. So, the article wants to be a critical review of what psychological science has found, and not so recently, in the field of assessment and development of psychological characteristics, in terms of risks and biases. Finally, it wants to underline the fact that, in spite of risks and biases, nowadays different methods and techniques are actually used to assess one person’s psychological characteristics, which is certainly questionable but also methodologically appropriate if they are appropriately used.     

Evaluating a sequential tree-based procedure for multivariate imputation of complex missing data structures

Item nonresponse in survey data can pose significant problems for social scientists carrying out statistical modeling using a large number of explanatory variables. A number of imputation methods exist but many only deal with univariate imputation, or relatively simple cases of multivariate imputation, often assuming a monotone pattern of missingness. In this paper we evaluate a tree-based approach for multivariate imputation using real data from the 1970 British Cohort Study, known for its complex pattern of nonresponse. The performance of this tree-based approach is compared to mode imputation and a sequential regression based approach within a simulation study.     

Credibility and commitment of monetary policy in open economies

We study the delegation of monetary policy to independent central bankers in a two-country world with monetary spillovers. It is shown that, under the hypotheses of imperfect commitment and private information, the equilibrium degree of commitment depends on the correlation structure of the shocks hitting the economies. When the correlation is negative (as when the variance of output depends mainly on shocks to the terms of trade) there is strategic complementarity in the degree of commitment in the two countries. When the correlation is positive (common technological or demand shocks) there is strategic substitutability. In this latter case, the degree of commitment is shown to be increasing in the correlation among shocks. Common components in the international business cycle have been shown in several studies to be relatively more relevant in developed countries. Therefore, our results may contribute to explaining why the institutional solution to the inflationary bias has been adopted in the most advanced countries.     

Estimating Benefits for Effective Enforcement of Speed Reduction from Dichotomous-Choice CV

We present an empirical estimation of the distribution of WTP foreffective speed restriction via implementation of local trafficcalming schemes. Random samples are drawn from the populations ofhouseholds (henceforth HHs) of three centres intersected by maintrunk roads with varying through traffic conditions. We estimatethe underlying WTP distributions from discrete-choice responsesto site-specific referendum contingent valuation studiesaccounting for zero-bidders. We then test the hypothesis ofdifferent distributions across villages. The statistical analysisconsists first of a parametric specification and then of atotally non-parametric one. Stated welfare changes for effectivespeed reduction are found to be sizeable and the parameters ofthe random utility models are plausibly related to differences inobjective speed measures across centres. The results appear toencourage the use of the referencum-CV method in the estimationof local public goods. In this case study the proposed publicproject would seem to pass the Kaldor-Hicks potentialcompensation test.     

The Market Reorientation of Farms: The Case of Olive Growing in the Nebrodi Area

In addition to safeguarding the landscape, olive growing makes a unique contribution to protecting the environment and the agricultural ecosystem. Olive growing in mountainous and hilly areas is severely constrained by structural limitations. Rural tourism can be a potential strategy to increase the competitiveness of olive-growing activities. After an initial analysis of the relationship between landscape, tourism, and olive growing, this study focused on olive growing in the Nebrodi area. In particular, we examined two case studies of olive farms to analyze the related production costs and market positioning strategies.