Using Consumption and Asset Return Data to Estimate Farmers' Time Preferences and Risk Attitudes

The generalized expected utility model is fitted to U.S. farm data to estimate farm operator's time preferences and risk attitudes. The estimated farmer's utility parameters are quite 'reasonable' and exhibit high accuracy. The forward-looking expected utility model is soundly rejected in favor of the generalized expected utility paradigm. Importantly, the generalized expected utility model is also found to fit the data better than the myopic model typically used to study agricultural production under risk. Finally, U.S. farmers' relative aversion to risk appears to have diminished significantly over time.     

Real options and cost-based access pricing: Model and methodology

This paper proposes a model and methodology for valuing the option to delay network investment decisions and calculating cost-based access prices. It argues that an option value multiple must be applied to the investment cost component of each network element in order to account for the value of the delay option that is extinguished at the time of investment. Option value multiples are calculated for the investment decision in three main network elements, each representing a different part of the Brazilian fixed telecommunications network, subject to different technological and demand uncertainties. After applying the markup factors, network costs must be assigned to network services on the basis of how much each service uses each network element.     

Stability and Vulnerability of the Latin American Middle Class

The geographical allocation of Spanish aid has been little studied, despite its unusual concentration on middle-income countries. This paper develops a theoretical model in which aid allocation depends on a combination of recipient needs, donor interests and performance criteria, and estimates it econometrically for Spain. The results show that the allocation of Spanish aid has been influenced both by Spain's own foreign policy interests and by recipient needs for poverty reduction and development (although not by the quality of recipient governance or recipient absorptive capacity). Former Spanish colonies received a disproportionate share of Spain's aid (as is true mutatis mutandis for other European countries), but aid is allocated among them with greater regard to recipient need than is Spain's aid to other developing countries.     

NUMERAIRE,SAVINGS AND THE INSTABILITY OF A COMPETITIVE EQUILIBRIUM

This paper addresses the stability of a multimarket competitive equilibrium. The dependence of stability on the choice of the numeraire is clarified. The traditional tâtonnement pricing is revised in order to satisfy some basic features of economic behaviour. Well‐known conditions for local stability are proved to be insufficient if a market for credit is introduced alongside the markets of dated commodities. Stability depends not only on the slopes of the demand and supply curves, but also on equilibrium prices. This result emerges without the occurrence of capital perversities, such as reswitching and reverse capital deepening.     

Modeling exchange rate passthrough after large devaluations

Large devaluations are generally associated with large declines in real exchange rates. We develop a model which embodies two complementary forces that account for the large declines in the real exchange rate that occur in the aftermath of large devaluations. The first force is sticky nontradable-goods prices. The second force is the impact of real shocks that often accompany large devaluations. We argue that sticky nontradable goods prices generally play an important role in explaining post-devaluation movements in real exchange rates. However, real shocks can sometimes be primary drivers of real exchange-rate movements.     

Derived versus full name brand extensions

Most brand extension studies follow the assumption that brand extensions use the full original parent brand name (e.g., Oral-B tooth brush may extend to Oral-B dental floss). However, some companies use derived brand names in their brand extension strategies (e.g. Nestea Iced Tea). This study explores the advantages and disadvantages of derived brand extensions compared to full name extensions. The study examines the importance of target market effects on the evaluation of both brand extension strategies. Findings support the idea that derived brand names leverage parent brand evaluations and protect parent brand from extension failures.     

Foreign Acquisition and Firm Productivity: Evidence from Slovenia

This paper investigates the impact of foreign acquisition on the productivity of Slovenian manufacturing firms subject to takeover in 1997. It finds evidence that foreign investors acquire those enterprises with higher productivity, that are more inclined to export and that operate in more concentrated industries. It then controls for the estimation bias induced by this non‐random selection process by applying the combined propensity score matching and difference‐in‐differences estimation technique. The results of the empirical analysis show no robust statistical evidence of a positive causal effect of foreign acquisition up to two years following takeover. This finding suggests that a transfer of intangible assets from foreign firms to their Slovenian affiliates does not take place over this time period.     

Parametric estimation of inefficiency in cargo handling in Spanish ports

Port workers services have been usually heavily regulated and reserved exclusively for a special kind of workers, dockworkers, which seems to have been the cause of serious inefficiencies worldwide. During the eighties, law reforms have been introduced to solve this problem. In this paper we analyze and decompose efficiency in cargo handling operations in 19 Spanish ports from 1990 to 1998. The method chosen is that of the parametric estimation of both allocative and technical inefficiency using panel data and a quadratic cost function. Results show that although inefficiency has decreased overall, there has been over utilization of labor regarding capital, and technical inefficiency. This supports the need of further consideration of other aspects including competition.

Kinked norms of behaviour and cooperation

Using a country panel of domestic terror attacks from 1998 to 2004, we empirically analyze the impact of government decentralization on terror. Our results show that expenditure decentralization reduces domestic terror, while political decentralization has no impact.