Economic well-being and poverty among the elderly: An analysis based on a collective consumption model

We apply the collective consumption model of Browning et al. (2010) to analyse economic well-being and poverty among the elderly. The model focuses on individual preferences, a consumption technology that captures the economies of scale of living in a couple, and a sharing rule that governs the intra-household allocation of resources. The model is applied to a time series of Dutch consumption expenditure surveys. Our empirical results indicate substantial economies of scale and a wife's share that is increasing in total expenditures. We further calculated two sets of poverty rates: one based on the collective consumption model and one based on the traditional approach with a standard equivalence scale. Poverty among widowers is underestimated by the traditional approach. The same is true for women (men) in elderly couples for the first (later) time periods in our analysis. Finally, we analysed the impact of becoming a widow(er). Based on cross-sectional evidence, we find that the drop in material well-being following the husband's death is rather substantial for women. For men, the picture is reversed.     

The Impact of Brand Delisting on Store Switching and Brand Switching Intentions

A tool retailers often use to improve their negotiating position with brand manufacturers is to delist - or threaten to delist - the manufacturers’ brand. Because brand manufacturers rely mainly on retailers to sell their products to consumers, a brand delisting will cause a sales loss for the brand manufacturer. Therefore, many brand manufacturers feel enormous pressure to give in and improve buying conditions to favor the retailer. The question thus emerges: Can a brand manufacturer resist a retailer's threat to delist its brand(s)? If a brand delisting severely hurts retail sales, it is easier for a brand manufacturer to resist. The authors study the impact of brand delistings on store switching and brand switching using a controlled online experiment and in-store shopper survey. They develop and test a conceptual model with several antecedents of consumers’ reactions to a brand delisting and conclude that brand equity, market share, and the products’ hedonic level drive store and brand switching.     

How Proper Is Sequential Equilibrium?

A strategy profile of a normal form game is proper if and only if it is quasi-perfect in every extensive form (with that normal form). Thus, properness requires optimality along a sequence of supporting trembles, while sequentiality only requires optimality in the limit. A decision-theoretic implementation of sequential rationality, strategic independence respecting equilibrium (SIRE), is defined and compared to proper equilibrium, using lexicographic probability systems. Finally, we give tremble-based characterizations, which do not involve structural features of the game, of the rankings of strategies that underlie proper equilibrium and SIRE.Journal of Economic LiteratureClassification Numbers: C70, C72.     

Evolutionary stability and lexicographic preferences

We explore the interaction between evolutionary stability and lexicographic preferences. To do so, we define a limit Nash equilibrium for a lexicographic game as the limit of Nash equilibria of nearby games with continuous preferences. Nash equilibria of lexicographic games are limit Nash equilibria, but not conversely. Modified evolutionarily stable strategies (Binmore and Samuelson, 1992. J. Econ. Theory 57, 278–305) are limit Nash equilibria. Modified evolutionary stability differs from “lexicographic evolutionarily stability” (defined by extending the common characterization of evolutionary stability to lexicographic preferences) in the order in which limits in the payoff space and the space of invasion barriers are taken.     

Methodological Advances in DEA: A survey and an application for the Dutch electricity sector

We survey the methodological advances in DEA over the last 25 years and discuss the necessary conditions for a sound empirical application. We hope this survey will contribute to the further dissemination of DEA, the knowledge of its relative strengths and weaknesses, and the tools currently available for exploiting its full potential. Our main points are illustrated by the case of the DEA study used by the regulatory office of the Dutch electricity sector (Dienst Toezicht Elektriciteitswet; Dte) for setting price caps.     

The Performance of European Index Funds and Exchange‐Traded Funds

European index funds and exchange‐traded funds underperform their benchmarks by 50 to 150 basis points per annum. The explanatory power of dividend withholding taxes as a determinant of this underperformance is at least on par with fund expenses. Dividend taxes also explain performance differences between funds that track different benchmarks and time variation in fund performance. Our results imply that not only fund expenses, but also dividend taxes can result in a substantial drag on mutual fund performance.     

Non-parametric production analysis in non-competitive environments

We extend the non-parametric methodology for empirical production analysis to deal with endogenous prices. As price endogeneity is often complemented by price uncertainty, we consider both the case of certain prices and the case of uncertain prices. The extensions are fully compatible with existing tools for eliciting and representing technology and price information, and preserves the tractable mathematical programming structure of the original methodology. An empirical application to the Dutch electricity distribution sector illustrates our extension.     

关于中国货币政策的分析与建议

中国人民银行在货币政策战略方面已经取得了巨大成绩,但随着经济的日趋复杂,货币政策的有效性将会降低。实证研究表明中国需要维持对货币的盯住(a reference to money)战略以及加强利率在货币政策执行中的作用。我们建议采取折衷性战略,包括盯住若干指标,并将短期利率作为执行目标。应该赋予央行利率政策的自主权,在不远的将来实现这一目标不存在技术上的障碍。     

Can exchange traded funds be used to exploit industry and country momentum?

There is overwhelming empirical evidence on the existence of country and industry momentum effects. This line of research suggests that investors who buy country and industry portfolios with relatively high past returns and sell countries and industries with relatively low past returns will earn positive risk-adjusted returns. These studies focus on country and industry indexes that cannot be traded directly by investors. This raises the question of whether country and industry momentum effects really can be exploited by investors or whether they are illusionary in nature because they exist only on non-tradable assets. We analyze the profitability of country and industry momentum strategies using actual price data on exchange traded funds (ETFs). We find that over the sample periods during which these ETFs were traded, an investor would have been able to exploit country and industry momentum strategies with an excess return of about 5 % per annum. These returns cannot be explained by unconditional exposures to the Fama–French factors. The daily average bid-ask spreads on ETFs are substantially below the implied break-even transaction cost levels. Hence, we conclude that investors who are not willing or able to trade individual stocks may use ETFs to benefit from momentum effects in country and industry portfolios.     

Private versus public consumption within groups: testing the nature of goods from aggregate data

We study the testability implications of public versus private consumption in collective models of group consumption. The distinguishing feature of our approach is that we start from a revealed preference characterization of collectively rational behavior. Remarkably, we find that assumptions regarding the public or private nature of specific goods do have testability implications, even if one only observes the aggregate group consumption. In fact, these testability implications apply as soon as the analysis includes three goods and four observations. This stands in sharp contrast with existing results that start from a differential characterization of collectively rational behavior.