Are intellectual property rights unfair?

If redistribution is distortionary, and if the income of skilled workers is due to knowledge-intensive activities and depends positively on intellectual property, a social planner which cares about income distribution may in principle want to use a reduction in intellectual property rights (IPRs) rather than redistributive transfers. On the one hand, such a reduction reduces static inefficiency. On the other hand, standard redistribution also reduces the level of R and D because it distorts occupational choice. We study this possibility in the context of a model with horizontal innovation, where the government, in addition to taxes and transfers, controls the fraction of innovations that are granted patents. The model predicts that standard redistribution always dominates limitations to IPRs.     

Will export taxes replace VERs?

Some economists use an export tax, which alters the domestic relative price of exports, to model a voluntary export restraint, which is a restriction on the quantity of exports with restriction-induced rents accruing to the exporting country. Implicit in this approach is the presumption that the two policies are equivalent. In a very general model that allows for a finite number of goods and factors and intermediated goods and joint production, we demonstrate that, in general, this is, in fact, not the case. Specifically, from the exporting country’s perspective, the real income effects of the two policies are nonequivalent.     

Are China's subsidies for electric vehicles effective?

China has implemented high subsidy schemes to promote the adoption of electric vehicles. This study constructs an industrial organization model to theoretically analyze and numerically simulate the subsidy efficacy of battery electric vehicles in China. We find that subsidies for battery manufacturers and those for electric vehicle manufacturers are equivalent. Fixed subsidies are better for social welfare maximization than linear subsidies are. Simulation based on Chinese empirical data shows that China's subsidies for electric vehicles are effective but not optimal. It could be a better option overall to enable the vertical integration of the supply chain.     

Are graduates’ intrapreneurial skills optimally used for innovation?

This paper studies the extent to which higher education graduates with higher intrapreneurial skills – creative, brokering, and championing skills – are more involved in innovation. Crucially, we differentiate between graduates employed in science, technology, engineering, and mathematics (STEM) occupations and those employed in business occupations. Using data on higher education graduates from 11 European countries, we find that, in both STEM and business occupations, high levels of creative skills are important to involvement in innovation. Higher levels of brokering skills are particularly important for graduates employed in STEM occupations, whereas higher levels of championing skills are particularly important for those in business occupations. We find, however, that the innovative potential of graduates with higher levels of intrapreneurial skills is not optimally utilized for innovation. Our study provides valuable insights for those selecting graduates for STEM and business occupations based on specific intrapreneurial skills to foster both product and process innovation, as well as for those in charge of designing higher education study curricula.     

Outstanding fundraising practice: how do nonprofits substantively increase their income?

• In this paper, we examine the characteristics of charities that have generated substantive increases in their fundraising income. We interviewed 25 fundraising directors and team members, from organizations experiencing rapid growth, adopting a “decoding the discipline” approach to identify how each organization had overcome key barriers to its success. We identify that fundraising leaders in these exceptional nonprofits focus particularly on matters connected to their team, organizational structures that support that team, and the development of an organization‐wide learning culture. We also find that these teams were successful because of the “systems” way in which they understood and coped with the complexities of decision making. They were exceptional in isolating the right problems and exceptional too in the processes they adopted to solve them.

Copyright © 2016 John Wiley & Sons, Ltd.     

Does the professionalism of management practices in nonprofits and for-profits affect job satisfaction?

This paper examines workers' satisfaction related to the level of professionalism of managerial practices in the French services sector. The data used are from the original survey conducted by the French Institute for Demographic Research and include both workers' responses on their satisfaction level, individual characteristics, job conditions, etc. and employers' responses on managerial practices implemented. We construct an index of workers' overall satisfaction and an index of ‘managerial professionalism’. In our model of workers' overall job satisfaction, the index of managerial practices is treated as an endogenous variable using two-stage least squares regressions. We show that the index of managerial practices is strongly and positively associated with workers' overall workplace satisfaction. Overall workplace satisfaction is found to be strongly associated with wages and individuals' perceptions about work environment. Finally, working in nonprofits is positively associated with greater overall job satisfaction.     

Bias corrections for exponentially transformed forecasts: Are they worth the effort?

In many economic applications, it is convenient to model and forecast a variable of interest in logs rather than in levels. However, the reverse transformation from log forecasts to levels introduces a bias. This paper compares different bias correction methods for such transformations of log series which follow a linear process with various types of error distributions. Based on Monte Carlo simulations and an empirical study of realized volatilities, we find no choice of correction method that is uniformly best. We recommend the use of the variance-based correction, either by itself or as part of a hybrid procedure where one first decides (using a pretest) whether the log series is highly persistent or not, and then proceeds either without bias correction (high persistence) or with bias correction (low persistence).     

Are gilts ethical investments?

In the light of the rolling bandwagon of socially responsible investment (SRI), this paper attacks gilt-edged securities as highly unethical investments. With gilts not conforming to the rules laid down by the government for the private sector, the author invites the pension funds to shake off this anachronism in favour of expansion of the corporate bond market     

Are professional forecasters overconfident?

Do professional forecasters have an accurate sense of the uncertainties surrounding their own forecasts? This paper examines forecaster overconfidence by comparing ex ante, surveyed forecaster uncertainty with ex post, realised uncertainty based on the dispersion of an individual’s forecast errors. Unlike the literature that focuses on consensus forecasts, our focus is at the level of the individual forecaster. Using microdata from the three major surveys of professional forecasters (Euro Area, US and UK), we examine real GDP growth forecasts over the period 1999–2015. Our findings show that overconfidence dominates among individual forecasters, particularly for longer forecast horizons, and that individual forecasters appear to have little understanding of their own uncertainty.     

Asset allocation over the life cycle: How much do taxes matter?

We study the welfare effect of tax-optimizing portfolio decisions in a life cycle model with unspanned labor income and realization-based capital gain taxation. For realistic parameterizations of our model, certainty equivalent welfare gains from fully tax-optimized portfolio decisions are less than 2% of present financial wealth and lifetime income compared to a heuristic portfolio policy ignoring the taxation of profits (capital gains, interest and dividend payments). Compared to a heuristic portfolio policy that only ignores the realization-based feature of capital gain taxation and instead assumes mark-to-market taxation, these gains are less than 0.5%. That is, our work provides a justification for ignoring taxes in life cycle portfolio choice problems – a wide-spread assumption in that literature. However, if capital gains are forgiven at death (as in the U.S.), investors with strong bequest motives face substantial welfare costs when not tax-optimizing their portfolio decisions towards the end of the life cycle.     

Wages and prices: Are workers fully compensated for cost of living differences?

This paper investigates the equilibrium relationship between wages and prices across labor markets. Of central interest is the extent to which workers receive higher wages to compensate for differences in the cost of living. According to the spatial equilibrium hypothesis, the utility of homogenous workers should be equal across labor markets. This implies that controlling for amenity differences across areas, the elasticity between wages and the general price level across areas should equal one, at least under certain conditions. I test this hypothesis and find that the predicted relationship holds when housing prices are measured by rents and the general price level is instrumented to account for measurement error. When housing prices are measured by housing values, however, the wage-price elasticity is significantly less than one, even using instrumental variables. Rents reflect the price paid for housing per unit of time and are arguably the superior measure. Thus, findings in this essay provide support for the full compensation hypothesis. These findings also have important implications for researchers estimating the implicit prices of amenities or ranking the quality of life across areas.