Islam-based legal language and state governance: democracy,strength of the judiciary and human rights

Constitutional Political Economy - States embracing Islam-based laws are frequently seen as struggling with establishing democratic institutions, jeopardizing human rights and encouraging executive...     

Reverse mortgages through artificial intelligence: new opportunities for the actuaries

Decisions in Economics and Finance - In its basic structure, the reverse mortgage (RM) is a contract where a home owner borrows a part or the totality of the future liquidation value of his home at...     

“Relative Importance of Risk Sources in Insurance Systems”, Edward W. Frees,April 1998

Abstract

This paper considers a Sparre Andersen collective risk model in which the distribution of the interclaim time is that of a sum of n independent exponential random variables; thus, the Erlang(n) model is a special case. The analysis is focused on the function φ(u), the expected discounted penalty at ruin, with u being the initial surplus. The penalty may depend on the deficit at ruin and possibly also on the surplus immediately before ruin. It is shown that the function φ(u) satisfies a certain integro-differential equation and that this equation can be solved in terms of Laplace transforms, extending a result found in Lin (2003). As a consequence, a closed-form expression is obtained for the discounted joint probability density of the deficit at ruin and the surplus just before ruin, if the initial surplus is zero. For this formula and other results, the roots of Lundberg’s fundamental equation in the right half of the complex plane play a central role. Also, it is shown that φ(u) satisfies Li’s (2003) renewal equation. Under the assumption that the penalty depends only on the deficit at ruin and that the individual claim amount density is a combination of exponential densities, a closed-form expression for φ(u) is derived. In this context, known results of the Cauchy matrix are useful. Surprisingly, certain results are best expressed in terms of divided differences, a topic deleted from the actuarial examinations at the end of last century.     

Job mobility and the gender wage gap in Italy

This paper investigates the contribution of gender differences in job mobility to the emergence of a gender wage gap in the Italian labour market. We show that over the first 10 years of labour market experience job mobility accounts for up to 30% of total log wage growth for men and only 8.3% for women, and that this difference is mainly due to differences in returns to mobility. The gender mobility gap is robust to the inclusion of individual, job and firm characteristics, to different ways of accounting for individual unobserved heterogeneity, and is mainly found for voluntary job moves. Looking at the characteristics of the jobs and the firms' workers move to, we find that moves to larger firms represent by far the main source of gender differences in returns to mobility. We offer two possible explanations for this finding; one which involves differences in bargaining behaviour and one which relates to the theory of compensating differentials.     

Race,Quality of Care and Patient Outcomes: What Can We Learn from the Department of Veterans Affairs?

The large and persistent differences in health outcomes between African Americans and whites have sometimes been attributed to differences in the quality of the facilities in which they receive care. A large body of literature documents systematically worse performance by facilities which serve a larger share of black patients. However, these estimates may be biased by unobserved variables which correlate with the racial profile of the clinic and also affect outcomes. This paper uses a unique dataset from the Department of Veterans’ Affairs system to examine the relationship between the quality of health care and the racial profile of the patient population in an equal-access health care system. An instrumental variable is used to overcome the omitted variable bias in the Ordinary Least Squares (OLS) estimates. Both the OLS and IV estimates show that increasing the proportion of visits by African–American patients results in improved outcomes for all patients treated at the clinic. The OLS results significantly underestimate the effect of increasing the proportion of black patients. Holding the overall clinic load constant and adding one hundred outpatient visits by African Americans in a year would result in a 0.5 percentage point decrease in 1-year mortality for the average patient in the clinic. Thus, contrary to results from the private health care sector, increasing clinic racial integration in an equal access system would benefit all patients.     

Perception of Health Claims Among Nordic Consumers

Health claim perception was investigated by a web-based instrument with a sample of 4,612 respondents in the Nordic countries (Denmark, Finland, Iceland, Norway, Sweden). Respondents decided which of a pair of claims sounded better, was easier to understand and was more convincing in their opinion. Claims were constructed from an underlying universe combining different active ingredients (familiar, unfamiliar), type of claim (combination of information about ingredient, physiological function and health benefit), framing (positive, negative), and use of qualifier (with, without “may”). Across pairs, the claims differed in the health benefit addressed (cardiovascular health, dementia, bodyweight). Results showed that respondents could be grouped into two roughly equally sized classes that differed in the type of claim preferred: one class prefers “long” claims that give the full story consisting of active ingredient, physiological function and health benefit, whereas the other prefers “short” claims consisting of the health benefit only. Results also showed that the familiar ingredient is preferred to the unfamiliar one, whereas effects of positive versus negative framing depended on the type of health benefit addressed.     

Bank profitability and macroeconomic conditions: Are business models different?

The paper investigates the impact of macroeconomic conditions on the profitability of EU banks by testing for differential effects according to the business model. We group banks into three business models using a hierarchical cluster analysis and find that using clusters based on the share of assets invested in loans reveals heterogeneity in the sensitivity of bank profitability to economic growth across business models. Our main result is that GDP growth, credit growth, and the risk-free yield curve influence profitability as expected, but we also find that the effect of GDP growth is only significant for banks that have a high and medium share of assets invested in loans, and not for banks that hold large portfolios of securities. This difference depends on the impact of growth on asset write downs, especially those on loans and, to a lesser extent, on revenues. The results suggest that studies relating bank profitability to macroeconomic conditions should take the heterogeneity of business models into account.     

The Impact of Higher Education Funding on Socio-Economic Variables: Evidence from EU Countries

Education is an important vector of smart growth, sustainable development, and economic competitiveness. Higher education plays an important catalytic role in human capital development, and ensures a better insertion of individuals in the socio-economic environment. However, at present, it faces complex challenges in the context of public financing contraction. The aim of our article is to investigate the level of higher education funding and to reveal the impact it has on the socio-economic environment. The novelty of our article resides in the multifaceted analysis we propose combining both qualitative and empirical methods, in the comprehensive sample of EU countries, and in the large time horizon we consider. We first assess the relationship between public financial resources allocated to higher education and socio-economic indicators by means of an exploratory technique, called cluster analysis. Our findings reveal a pattern of similarity among EU countries by building smaller but homogenous groups. We then use the vector autoregressive method to complement the cluster analysis by providing further information on the strength, sign, and causal relationship between government expenditure in tertiary education and several socio-economic indicators. We perform an analysis for each country in the sample. Our findings are mixed, with some countries displaying a greater sensitivity of public financing (channeled to higher education) to changes in socio-economic indicators.