Secrets to design an effective message on Facebook: an application to a touristic destination based on big data analysis

The objective of this research is to identify which are the key variables for designing a message in a social network that can be used by an advertiser to generate Positive/Negative Engagement. The message’s design variables have been classified into four main groups: (i) Message Tools (presence of text, images, video, labels, applications, interactive games and events calendar or others), (ii) Appropriate Message Structure (length and intelligibility), (iii) Informative Cues (links to the brand, orientation towards the product or the brand, topics relevant to the audience, and a remuneration’s promise) and (iv) Persuasive and Emotional Cues (emotional signals, valence, endorsement and influencer mentions). The focus has been a tourist destination: Brand Spain that is advertised through Facebook. A content analysis was carried out and regression analysis with optimal scaling was used on 180 Spain brand’s publications; 57,626 audience reactions to such publications; and 1361 audience comments on the Brand Spain Official Fan Page. According to our results, from the four blocks of predictive variables, only two of them are useful to predict Positive/Negative Engagement: (i) the use of Message Tools (videos), and (ii) the use of informative cues (relevant topics, links on posts, and post’s orientation towards product).     

Transboundary pollution externalities: Think globally,act locally?

We analyze the implications of transboundary pollution externalities on environmental policymaking in a spatial setting, in which pollution diffuses across the global spatial economy independently of the specific location in which it is originally generated. This framework gives rise to a simple regional optimal pollution control problem allowing us to compare the global and local solutions in which, respectively, the transboundary externality is and is not taken into account in the determination of the optimal policy by individual local policymakers. We show that it is not obvious that transboundary externalities are a source of inefficiency per se since this is strictly related to the spatial features of the initial distribution of pollution. If the initial pollution distribution is spatially homogeneous then the local and global solutions will coincide and thus no efficiency loss will arise from transboundary externalities, but if it is spatially heterogeneous the local solution will be suboptimal and thus a global approach to environmental problems will be needed to achieve efficiency. From a normative perspective, in this latter (and most realistic) case we also quantify the amount of policy intervention needed at local level in order to achieve the globally desirable goal of pollution eradication in the long run. Our conclusions hold true in a number of different settings, including situations in which the spatial domain is either bounded or unbounded, and situations in which macroeconomic–environmental feedback effects are taken into account.     

Farm Capital Investment and Deviations from the Optimal Path

We identify farms’ optimal investment path in capital assets and compare it with their actual investment to assess the direction and extent of deviation from the optimal investment. A probit model is further used to investigate the determinants of the probability that a farmer over‐ or under‐invests in capital assets. We use a panel dataset of Dutch dairy farms over the period 2003–2013, and find that most farms under‐invest in capital assets during the study period. Although the number of farms that had over‐invested in capital assets is relatively small, these farms account for the biggest share of total investment in capital assets. The probit results show that liquidity, agricultural support payments, age, land tenure and standard output size are important variables explaining the likelihood of over‐and under‐investment.     

Periodic strategies in optimal execution with multiplicative price impact

We study the optimal execution problem with multiplicative price impact in algorithmic trading, when an agent holds an initial position of shares of a financial asset. The interselling decision times are modeled by the arrival times of a Poisson process. The criterion to be optimized consists in maximizing the expected net present value of the gains of the agent, and it is proved that an optimal strategy has a barrier form, depending only on the number of shares left and the level of the asset price.     

Fuel consumption for various driving styles in conventional and hybrid electric vehicles: Integrating driving cycle predictions with fuel consumption optimization*

Improving fuel economy and lowering emissions are key societal goals. Standard driving cycles, pre-designed by the US Environmental Protection Agency (EPA), have long been used to estimate vehicle fuel economy in laboratory-controlled conditions. They have also been used to test and tune different energy management strategies for hybrid electric vehicles (HEVs). This paper aims to estimate fuel consumption for a conventional vehicle and a HEV using personalized driving cycles extracted from real-world data to study the effects of different driving styles and vehicle types on fuel consumption when compared to the estimates based on standard driving cycles. To do this, we extracted driving cycles for conventional vehicles and HEVs from a large-scale U.S. survey that contains real-world GPS-based driving records. Next, the driving cycles were assigned to one of three categories: volatile, normal, or calm. Then, the driving cycles were used along with a driver-vehicle simulation that captures driver decisions (vehicle speed during a trip), powertrain, and vehicle dynamics to estimate fuel consumption for conventional vehicles and HEVs with power-split powertrain. To further optimize fuel consumption for HEVs, the Equivalent Consumption Minimization Strategy (ECMS) is applied. The results show that depending on the driving style and the driving scenario, conventional vehicle fuel consumption can vary widely compared with standard EPA driving cycles. Specifically, conventional vehicle fuel consumption was 13% lower in calm urban driving, but almost 34% higher for volatile highway driving compared with standard EPA driving cycles. Interestingly, when a driving cycle is predicted based on the application of case-based reasoning and used to tune the power distribution in a hybrid electric vehicle, its fuel consumption can be reduced by up to 12% in urban driving. Implications and limitations of the findings are discussed.     

Open Economy Dynamics in a Floating Exchange Rate Developing Country Context

ABSTRACT

This article develops a wavelet-based control model to simulate fiscal, monetary, and real exchange rate scenarios in an open economy developing country with an inflation-targeting regime. We use South African macro data to jointly simulate optimal fiscal and monetary policy under varying scenarios for real exchange rate stability with interest rate parity. As real exchange rate stability increases, the model simulates the effects on the trade balance under both a constant and depreciating real exchange rate. We find that short-term cycle stability problems are somewhat mitigated by allowing the real exchange rate to depreciate.     

Capital Regulation with Two Banking Sectors: Cyclicality and Implementation

We present a capital regulation policy in a model in which banks can choose to be unregulated, by operating in the shadow banking sector, when the cost of being regulated (restriction on portfolio risk) exceeds the benefit (cheaper funding/insurance). We show that the welfare maximizing capital requirement policy can be procyclical: lower requirement during booms and higher requirement during recessions. Our policy specifies the level of capital requirement as a function of the observed relative size of the unregulated and regulated banking sectors. This specification achieves the optimal aggregate risk exposure by obtaining the right mix of the two sectors.     

Returns to women’s education using optimal IV selection

This paper investigates returns to women’s education by applying an optimal IV selection approach, post-Lasso IV estimation, which improves the first-stage predictive relationship between an endogenous regressor and instruments. Using the 2010 American Community Survey, we find that an extra year of education increases married women’s own income by $4,480 and spouse income by $8,822. Our findings indicate that 53% of the increase in women’s consumption by education is attributed to the marriage market, and thus, we conclude that the marriage market is the primary channel through which education improves women’s well-being. The results demonstrate the advantages of the post-Lasso approach: The resulting two-stage least squares estimator maintains efficiency without increasing finite sample bias and is less subject to the inconsistency problem when some instruments are invalid; This differs from the results using the instrument of birth quarters only, which is mostly applied in studies on returns to education.     

The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets

Consumer “multihoming” (watching two TV channels, or buying two news magazines) has surprisingly important effects on market equilibrium and performance in (two‐sided) media markets. We show this by introducing consumer multihoming and advertising finance into the classic circle model of product differentiation. When consumers multihome (attend more than one platform), media platforms can charge only incremental value prices to advertisers. Entry or merger leaves consumer prices unchanged under consumer multihoming, but leaves advertiser prices unchanged under single‐homing: Multihoming flips the side of the market on which platforms compete. In contrast to standard circle results, equilibrium product variety can be insufficient under multihoming.     

A single currency for the Economic Community of West Africa? An economic assessment

This paper assesses the economic support for the creation of an Economic Community of West African States (ECOWAS) monetary union encompassing all its 15 members, an objective that was set more than 30 years ago. In line with previous empirical research, our conclusion is that the adoption of a common currency by the whole region is not recommended. This work takes a step forward and assesses alternative ways to reduce the current number of currencies in circulation in the Community. Based on our results, we suggest (i) the merging of the currencies of Guinea, Liberia and Sierra Leone into a single currency and (ii) the Gambia to join the West African Economic and Monetary Union (WAEMU).