A consistent model specification test with mixed discrete and continuous data

In this paper we propose a nonparametric kernel-based model specification test that can be used when the regression model contains both discrete and continuous regressors. We employ discrete variable kernel functions and we smooth both the discrete and continuous regressors using least squares cross-validation (CV) methods. The test statistic is shown to have an asymptotic normal null distribution. We also prove the validity of using the wild bootstrap method to approximate the null distribution of the test statistic, the bootstrap being our preferred method for obtaining the null distribution in practice. Simulations show that the proposed test has significant power advantages over conventional kernel tests which rely upon frequency-based nonparametric estimators that require sample splitting to handle the presence of discrete regressors.     

Impact of CEPA on the labor market of Hong Kong

A panel data method is used to evaluate the impact of the Closer Economic Partnership Agreement (CEPA) signed between Mainland China and Hong Kong. Using the time series data of Hong Kong, Austria, Denmark, Finland, France, Germany, Italy, Japan, Korea, Netherlands, Norway, Singapore, Taiwan, U.K., and U.S. to construct what would have happened to Hong Kong's unemployment rate had there been no CEPA, we find that the CEPA effects gradually increases over time and eventually reached a constant level of reducing Hong Kong's unemployment rate by 9% a year.     

Cost effectiveness of a 92-gene assay for the diagnosis of metastatic cancer

Objectives:

To estimate the clinical and economic trade-offs involved in using a molecular assay (92-gene assay, CancerTYPE ID) to aid in identifying the primary site of difficult-to-diagnose metastatic cancers and to explore whether the 92-gene assay can be used to standardize the diagnostic process and costs for clinicians, patients, and payers.

Methods:

Four decision-analytic models were developed to project the lifetime clinical and economic impact of incorporating the 92-gene assay compared with standard care alone. For each model, total and incremental costs, life-years, quality-adjusted life-years (QALYs), incremental cost–effectiveness ratios (ICERs), and the proportion of patients treated correctly versus incorrectly were projected from the payer perspective. Model inputs were based on published literature, analyses of SEER (Surveillance Epidemiology and End Results) data, publicly available data, and interviews with clinical experts.

Results:

In all four models, the 92-gene assay increased the proportion of patients treated correctly, decreased the proportion of patients treated with empiric therapy, and increased quality-adjusted survival. In the primary model, the ICER was $50,273/QALY; thus, the 92-gene assay is therefore cost effective when considering a societal willingness-to-pay threshold of $100,000/QALY. These findings were robust across sensitivity analyses.

Conclusions:

Use of the 92-gene assay for diagnosing metastatic tumors of uncertain origin is associated with reduced misdiagnoses, increased survival, and improved quality of life. Incorporating the assay into current practice is a cost-effective approach to standardizing diagnostic methods while improving patient care. Limitations of this analysis are the lack of data availability and resulting modeling simplifications, although sensitivity analyses showed these to not be key drivers of results.     

Insider ownership and financial flexibility

This study examines the cash flow sensitivity of external financing (financial flexibility (FF)) of firms from the perspective of the agency by focusing on whether and how insider ownership has a modifying effect on the FF of firms. Given the documented relationship between corporate governance and cost of external financing, insider ownership, an important proxy of corporate governance, should affect FF via the agency cost channel. A review of the US nonfinancial firms from 1992 to 2009 indicates that insider ownership aids in determining the FF of firms. More specifically, results indicate the existence of optimal insider ownership, and any deviation from it causes FF to decrease. In addition, FF is higher when CEO ownership is lower (<0.08%) and this phenomenon is more pronounced for financially unconstrained firms. Furthermore, FF is higher when non-CEO insider ownership is in the middle range (0.12–0.43%) for financially constrained firms, whereas non-CEO insider ownership has minimal impact on FF for unconstrained firms.     

Econometric modelling of Canadian long distance calling: A comparison of aggregate time series versus point-to-point panel data approaches

Aggregate time series and point-to-point panel data approaches to modelling Canadian long distance calling are compared. It is found that, while both models yield similar sets of aggregate elasticities, the point-to-point panel data models provide more detailed information on consumer behavior. Furthermore, the panel data models take advantage of the disaggregate data available and avoid the problems inherent in aggregate models when the rates of changes in the micro data are different.Cheng Hsiao's work is supported in part by National Science Foundation grant SES 88-21205. We wish to thank referees for helpful comments.     

Estimating consumer preferences using market data—an application to us automobile demand

This paper explores the possibility of using market data to identify consumer preferences. A utility function composed of ‘homogeneous’ characteristics and goods-specific effects is used as a basic link between the goods space and the characteristics space. The functional form for the hedonic price equation, the data requirements and issues of measurement errors for estimating demand and supply of characteristics are discussed. We illustrate the methodology by considering the US automobile demand using 1969–86 data compiled from Consumer Reports and Ward's Automotive Yearbook.     

Demand for International Reserves and Exchange Rate Policy in Taiwan, 1979–1990*

Taiwan has experienced a huge trade surplus and a rapid growth in the money supply since the 1970s. This paper constructs and estimates a model that takes into account the demand for international reserves, price levels, and the joint determination of the exchange rate, the demand for money, and the balance of payments in Taiwan during the period 1979 to 1990. We focus our attention especially on the period from 1986 to 1990 when foreign reserves rapidly accumulated and the appreciation expectations prevailed. Our estimate of exchange rate reaction function accords with what is expected. The exchange rate appreciations had a favourable effect on the stabilization of price levels. In addition, the exchange rate and its expectations play important roles in the demand for money equation.     

Effects of web-based versus classroom-based STEM learning environments on the development of collaborative problem-solving skills in junior high school students

Collaborative problem-solving skills are one of the key competencies required in the twenty-first century. In this study, researchers attempted to compare the effectiveness of web-based collaborative problem-solving systems (wCPSS) and classroom-based collaborative hands-on learning activities (cCHLA) in the development of collaborative problem-solving skills in junior high school students who were learning science, technology, engineering, and mathematics (STEM)-related subjects. A quasi-experimental, nonequivalent pretest–posttest control group design was employed, and 241 junior high school students were invited to participate in the study. According to the results, a wCPSS-supported environment with teacher guidance was found to be more effective than either a wCPSS-supported environment without teacher guidance or a cCHLA-facilitated environment in developing students’ collaborative problem-solving skills in STEM fields. The study suggested that a web-based collaborative problem-solving system with teacher guidance can be used in developing junior high students’ collaborative problem-solving skills in STEM education.     

A causal model for the development of long-term facilities: a case in Taiwan

Elder care is an important issue in many developed countries such as U.S., Japan, and Taiwan. With the advent of population aging throughout the world, the development of long-term care facilities has become a very vital topic. In actuality, long-term care systems involve government oversight agencies as well as interaction between factors such as laws, social environment, culture, long-term care facilities, residents, and the families of residents, forming a complex and dynamic system. This paper uses system dynamics methodology to model the developmental structure of Taiwanese long-term care facilities to explore its system behaviors. The developmental structure of long-term care facilities in Taiwan is primarily composed of the four levels: overall satisfaction, overall service quality, the skill of administrative and medical care personnel and facility hardware resources. Time delay, complex, and dynamic relationships are present in the overall structure. The overall service quality of facilities is one of the most important factors in facilities’ development and that the skills of administrative and medical care personnel is the main critical factor in improving overall service quality. Finally, some suggestions are discussed relevant strategies for the government and the industry.     

The impact of sports ethics of professional baseball player to the development of sports industry in Taiwan

Once countries develop economically to a certain degree, they typically develop sports industries to further improve the welfare of their citizens and to stimulate further economic development. The successful development of sports industries, however, is affected by the impact of many environmental factors. The Enron scandal has caused ethical topics to become a subject of worldwide focus. This paper studies Taiwanese professional baseball to examine how ethical factors impact the survival and development of baseball teams. In reality, the operation of professional baseball is primarily affected by the impact of the ethical views of players as well as cultural environmental factors. These factors interact to form a complex and dynamic system. This study uses system dynamics to examine the systemic structure of the development of Taiwanese professional baseball. We present a dynamic model for the development of professional baseball and examine the impact of sports ethics and societal gambling trends on the development of professional baseball in Taiwan, and then discuss relevant topics.