Commitment and Lapse Behavior in Long‐Term Insurance: A Case Study

This article presents a case study of a portfolio of individual long‐term insurance contracts sold by a Spanish mutual company. We describe the risk levels, the rating structure, and the implied cross‐subsidies on a portfolio of policies providing health, life, and long‐term care insurance. We show evidence of reclassification risk through the history of disability spells. We also analyze the lapse behavior and seek to provide a rationale for the portfolio’s dynamics. We discuss the lack of commitment from the policyholders (lapses) and from the mutual company (which took a run‐off decision). Finally, we draw conclusions regarding the design of such contracts.     

The Impact of an EU–US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets

We assess the impact of a potential TTIP bilateral free trade agreement on the EU and US bio‐economies (feedstock, biofuels, by‐products, and related competing crops) and major trade partners in these markets. The analysis develops a multi‐market model that incorporates bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to the OECD‐FAO baseline for 2013–2022 to account for recent policy decisions. The major policy reforms from a TTIP involve tariff and TRQ liberalisation and their direct contractionary impact on US sugar supply, EU biofuel production, and indirect negative effect on US high fructose corn syrup (HFCS) production. EU sugar and isoglucose production expand along with US ethanol and biodiesel and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU. We further quantify non‐tariff measures (NTM) affecting these trade flows between the EU and the US. EU oilseed production contracts, and EU crushing expands with improving crushing margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with most net benefits reaped by Brazil and not the two trading partners of the TTIP.     

Technical and vocational teaching and training in Gabon: how future teachers build their vocational identity?

The professionalism of teachers is based on three levels of expertise: mastering academic knowledge, mastering the teaching of this knowledge and mastering the role played by teachers in schools. For each of these levels, each student during the teacher training courses has his own understanding. This understanding influences their perception of the job of teacher and thus their attitude towards their training. Efficiency of this training could be evaluated through the evolution of this understanding. The experimental part of this study will involve looking at this evolution with students from the ENSET in Libreville at the beginning of the training course, the end of the first cycle and the end of the second cycle. Data collected shows that training does not really produce the desired results for a university vocational teacher training course for technology education.     

Long-term trends in weather-related crash risks

This study explores whether automobile travel during inclement weather has become more or less risky over the past two decades. The analysis is based on the integration of two government databases and a matched-pair framework for comparing casualty rates under different weather conditions for 10 Canadian cities. The most notable result is a downward trend in relative risk during rainfall from 1984 to 2002 – both overall and when further disaggregated by injury severity combined with precipitation amount, city group, and time of day. By contrast, the overall relative risk of casualty during snowfall shows no significant change over time.     

Can Federal Grants Mitigate Social Competition?

The European economic integration leads to increasing mobilityof factors, thereby threatening the stability of social transferprograms. This article investigates the possibility to achieveby means of voluntary matching grants both the optimal allocationof factors and the optimal level of redistribution in the presenceof factor mobility. We use a fiscal competition model a la Wildasin(1991) in which states differ in their technologies and preferencesfor redistribution. We first investigate a simple process inwhich the federal authority progressively raises the matchinggrants to the district choosing the lowest transfer and alldistricts respond optimally to the resulting change in transfersall around. This process is shown to increase efficiency ofboth production and redistribution. However, it does not guaranteethat all districts gain, nor that an efficient level of redistributionis attained. Assuming complete information among districts,we derive the willingness of each district to match the contributionof other districts and we show that the aggregate willingnessto pay for matching rates converges to zero when both the efficientlevel of redistribution and the efficient allocation of factorsare achieved. We then describe an adjustment process for thematching rates that will lead districts to the efficient outcomeand guarantee that everyone will gain. (JEL Classification:H23, H70)     

Supply structure: The pendulum in action

Using an in-depth longitudinal case study based on an “historical retrospective”, this article focuses on how some factors (“drivers”) set into motion the pendulum of change in supply structures, a research theme neglected in the supply field. It examines, over a 20-year period, the changes made to the supply structure of a well-known organization. The data comes mainly from: (a) semi-structured interviews with 21 managers and professionals within eight operating units, and (b) documentary analyses of the archives. This article shows how to map structural changes of the supply function, while explaining the nature and the causes of these changes. Understanding the pendulum movement from one supply structure to another can be very valuable, as well for academics as for managers.     

Small and Medium Enterprise Financing in Transition Economies

This paper studies the financing status of small and medium enterprises (SMEs) in transition economies. Factors causing financing obstacles are indentified and further analyzed to determine their influence over financing patterns. Bank regulatory practices relevant to SMEs’ access to bank loans and their influence over loan structures are identified. This study contributes to the existing body of knowledge by exploring the impact of specific bank regulatory practices on credit lending to SMEs in transition economies.     

Vertical product differentiation and two-sided markets

We model platform competition in a market where products are characterized by cross network externalities. Consumers differ in their valuation of these externalities. Although the exogenous set-up is entirely symmetric, we show that platform competition induces a vertical differentiation structure that allows for the co-existence of asymmetric platforms in equilibrium. We establish this result in two set-ups: in the first one platforms commit to prices, in the second one they commit to network sizes.     

The interaction of retail density and music tempo: Effects on shopper responses

Research examining the effects of store environment on shoppers has found that a number of atmospheric cues have significant effects on shoppers' cognitive, affective, and behavioral responses. To date, retail atmospheric cues have been studied in isolation, instead of simultaneously, like they occur in the retail setting. This study examines the interactive effects of two atmospheric cues—retail density and music tempo—and their impact on shopper responses within a real shopping environment. Based on the schema incongruity model, it is found that shopper hedonic and utilitarian evaluations of the shopping experience are highest under conditions of slow music/high density and fast music/low density. Significant main effects of music tempo are found for behavioral responses such as approach/avoidance tendency and extent of browsing behavior. The results underscore the need to examine interactive effects of atmospheric cues to better understand the impact of the store environment on shoppers. © 2005 Wiley Periodicals, Inc.     

Pricing Term Insurance in the Presence of a Family History of Breast or Ovarian Cancer

Abstract

We estimate the increased mortality and term life insurance costs for women who have a family history of breast or ovarian cancer. Using data from the medical literature on age-specific and family history-specific incidence rates, we develop double-decrement models to evaluate the actuarial impact of breast cancer and ovarian cancer in the family. We also calculate the increased mortality and term insurance costs for women who test positive for the BRCA1 or BRCA2 gene mutation. We find that the type of affected relative and her age at onset of the disease are key underwriting factors. We find substantial mortality increases (up to 100%) for women with two relatives with cancer and women with a first-degree relative who developed cancer at an early age. Mortality increases for women with the BRCA gene mutation reach 150%. While some females with a family history of cancer can be accepted at standard rates, others may need to be quoted substandard rates, depending on the underwriting policy of the company. Females with the gene mutation can possibly be accepted at a rate that incorporates a severe mortality surcharge.