Progress along the path: evolving issues in the measurement of genuine saving

More than 10 years since a practical linkage between sustainable development and a measure of national wealth—expanded to include natural and environmental resources—was first posited, the empirical estimation of adjusted net savings, dubbed ‘genuine’ saving, has evolved considerably. In this paper we take stock of both progress achieved and the challenges that remain. We begin by recalling the key points made in Pearce and Atkinson (1993, Ecol Econ 8, 103), which presented the first cross-country estimates of savings rates adjusted to reflect depletion and degradation of the environment. We then briefly summarise the evolution of the theoretical argument linking savings and sustainability. However, the main focus of this paper is an aspect that concerned David Pearce greatly, namely the evolution of the measurement of genuine savings. We identify and consider the empirical evidence with regard to two particular measurement issues: the valuation of exhaustible resources and environmental degradation. Common to the both issues are concerns about measuring changes in national wealth in real world economies.      

Balanced Contributions Axiom in the Solution of Cooperative Games

In a gamevin characteristic function form, suppose the Banzhaf value ψ is used to pay a coalitionSalready formed. Then coalitionSno longer receivesv(S); instead it receivesR^ψ(S) = ∑_{i ∈ S}ψ_i(v_s), wherev_Sdenotes the subgame of coalitionS. Surprisingly, the Shapley value of this new game Sh(N, R^ψ) is equal to the Banzhaf value ofv. In this paper we establish a similar result for all values satisfying balanced contributions axiom. Additionally, we introduce player's weights to obtain the corresponding result in the nonsymmetric case.Journal of Economic LiteratureClassification Number: C71     

The death knells of mature technologies

The oscillatory behavior in the mature phase of some technologies' diffusion-related S curves are investigated, specifically with regard to the influences that other technologies can have on the oscillations. The notion of mortality indicators is raised, that is, whether such behavior is a signal that the mature technology is under attack from an emerging technology. The case of structural panels in the wood products industry is considered as an example, and an updated forecast of the substitution of oriented strand board for plywood is made. It is concluded that factors such as macroeconomic business cycles are primarily responsible for the oscillations in plywood's S-curve, although it is argued that an emerging technology can also contribute to perturbations in a mature technology's S-curve. Two possible alternative explanations for the oscillatory behavior are also discussed, a previously proposed chaos formulation, and a mathematical model based on modified Lotka-Volterra equations. This model shows that the oscillatory behavior in mature technologies' S-curves can also result from symbiotic interaction between two technologies under certain circumstances.     

A non-linear approach for predicting stock returns and volatility with the use of investor sentiment indices

The popular sentiment-based investor index S^BW introduced by Baker and Wurgler (2006, 2007) is shown to have no predictive ability for stock returns. However, Huang et al. (2015) developed a new investor sentiment index, S^PLS, which can predict monthly stock returns based on a linear framework. However, the linear model may lead to misspecification and lack of robustness. We provide statistical evidence that the relationship between stock returns, S^BW and S^PLS is characterized by structural instability and inherent nonlinearity. Given this, using a nonparametric causality approach, we show that neither S^BW nor S^PLS predicts stock market returns or even its volatility, as opposed to previous empirical evidence.     

Pareto improving financial innovation in incomplete markets

Summary. In this paper we develop a differential technique for investigating the welfare effects of financial innovation in incomplete markets. Utilizing this technique, and after parametrizing the standard competitive, pure-exchange economy by both endowments and utility functions, we establish the following (weakly) generic property: Let S be the number of states, I be the number of assets and H be the number of households, and consider a particular financial equilibrium. Then, provided that the degree of market incompleteness is sufficiently larger than the extent of household heterogeneity, S−I≥2H−1 [resp. S−I≥H+1], there is an open set of single assets [resp. pairs of assets] whose introduction can make every household better off (and, symmetrically, an open set of single assets [resp. pairs of assets] whose introduction can make them all worse off ). We also devise a very simple nonparametric procedure for reducing extensive household heterogeneity to manageable size, a procedure which not only makes our restrictions on market incompleteness more palatable, but could also prove to be quite useful in other applications involving smooth analysis. Received: August 14, 1995; revised version: April 14, 1997     

RENAISSANCE OR REQUIEM: IS NUCLEAR ENERGY COST EFFECTIVE IN A POST‐FUKUSHIMA WORLD?

In the aftermath of Fukushima, decisions to slow or stop the future use of nuclear power have not been based on rational economic analysis. We find that there are cost‐effective technologies that would greatly mitigate future natural disasters. Even if the U.S. nuclear industry adopted new safety technologies and paid the full cost of insurance and borrowing, it is more efficient to continue to use existing nuclear plants than to replace them with new fossil fuel plants. However, new nuclear plant costs can exceed fossil fuel alternatives if the price of carbon emissions is below $118/ton. (JEL Q40, Q48, Q54)     

Asymmetric impact of relative price shocks in presence of trend inflation

This study examines whether skewness of cross-sectional distribution of relative price shocks has asymmetric impact on aggregate inflation. The empirical evidence from major economies suggests that the positively skewed shocks have different impact from that of negatively skewed shocks on aggregate inflation. In particular, the empirical results indicate that this asymmetry in the impact of relative price shocks mainly depends on the nature of trend that inflation exhibits for a given period. The crucial inference that emerges from the empirical findings is that the traditional approach of using a simple linear regression model, to examine the relationship between inflation and skewness in presence of trend inflation, is not appropriate as it may lead to misleading conclusions.     

A two-factor learning model for private sector industrial firms

ABSTRACT

The Cobb–Douglas form of the two-factor learning curve model has been the conventional choice in empirical studies of the relative importance of R&D versus capacity expansion for cost reduction in energy technologies. Most empirical studies have focused on the role of public R&D in the context of renewable energy technologies. In this study, we provide a rationale for considering a different model formulation of the tradeoff between R&D and production capacity expansion when studying technology development in the private sector and we compare it to the conventional Cobb–Douglas model. We then apply our model formulation to a particular emerging technology case study.     

Wages and hazardous working conditions

The purpose of this paper is to provide a new empirical test for the existence of wage premiums paid to workers who are exposed to dangerous or unhealthy working conditions. Prior empirical studies have encountered problems with omitted ability data, omitted working conditions data and measurement error. The empirical model presented in this paper uses a difference specification to eliminate bias from omitted ability data. By assuming that all hazardous working conditions are measured by a single endogenous unobserved variable, this empirical model also eliminates bias due to omitted working conditions and measurement error. The empirical model is estimated using the 1973–7 version of the Quality of Employment Survey. The unique data in this survey facilitate estimation of a model in which working conditions are assumed to be unobservable. Using a two-stage technique for consistent and efficient estimation, the empirical results reported in this paper show that a compensating difference for hazardous work does exist.     

Congestion pricing of Canadian airports

Abstract Under congestion pricing, Canadian airports would annually save between $72 and $105 million. Social costs per landing and takeoff decrease about $300 at Toronto and Vancouver and $50 at Calgary and Montreal. Slot constraints fail to eliminate this airport congestion. Congestion prices are lower on average than existing weight‐based prices. Current airport capacity accommodates at least five more years of traffic growth before congestion reaches current levels. Substantial welfare gains occur even if dominant airlines already internalize their self‐imposed delays. This article calculates equilibrium congestion pricing schedules, traffic rates, queuing delays, layover times, and connection times by time of day.     

A COMPARISON OF CONDITIONAL AND UNCONDITIONAL APPROACHES IN VALUE‐AT‐RISK ESTIMATION*

In this paper, we attempt to find the most important factor causing the differences in the performance of Value‐at‐Risk (VaR) estimation by comparing the performances of conditional and unconditional approaches. For each approach, we use various methods and models with different degrees of flexibility in their distributions including S_U‐normal distribution, which is one of the most flexible distribution functions. Our empirical results underscore the importance of the flexibility‐of‐distribution function in VaR estimation models. Even though it seems to be unclear which approach is better between conditional and unconditional approaches, it seems to be clear that the more flexible distribution we use, the better the performance, regardless of which approach we use.     

The hunt for S-shaped growth paths in technological innovation: a patent study*

Since the works by the business cycle theorists in the 1930s, no attempts have been made to study empirically the long term evolution paths of individual technologies starting with long time series. This is an empirical exploration and confirmation of the now almost assumed image or metaphor of the way technology develops; that it follows an S-shaped growth path which is commonly associated with a similar shaped diffusion function of entrepreneurial activity. The paper also confirms the diversity of technology dynamics and explores how technological cycle takeoffs appear to be clustered within certain historical epochs. The results have implications for our understanding of the evolution paths of individual technologies, and of the evolution of technological systems and waves of innovation. By use of computational statistics, logistic growth functions are fitted to US patent stocks, 1920–1990, at a detailed level of aggregation, including chemical, electrical/electronic, mechanical, transport and non-industrial technologies. Some practical considerations when developing an empirically testable model of innovation cycles are addressed in the paper as well.     

Using eye-tracking to model attribute non-attendance in choice experiments

We investigate revealed attribute attendance in discrete choice experiments using eye-tracking. A simple theoretical framework is proposed in which choices are a function of visual attention. Consistent with the existing literature, the assumption that participants use all the available information to make their decisions does not hold. The results also illustrate that model fit and predictive power are greatly increased by using visual attendance measures as regressors. The use of eye-tracking technology has value for measuring revealed attention and to benchmark with existing choice models.     

A nonparametric analysis of insufficient wage incentives in the Chinese health industry

ABSTRACT

This study provides empirical results on the insufficient wage incentives in the Chinese health industry, which may result in the poor productivity of high-ability medical personnel. We first propose a signaling game by capturing the progressive wage incentive in this industry. Then, we show that the model primitives are nonparametrically identified and estimable using recently developed methodologies related to measurement errors. Adopting a dataset from the China Household Income Project, we provide empirical evidence of the negative influence of insufficient wage incentives on the productivity of high-ability workers, especially those in higher job positions. As the number of high-ability workers in higher job positions is high, it is important to improve wage incentives in the Chinese health industry, especially for workers in higher job positions, to promote the productivity of high-ability medical workers.     

Optimal hedge ratio estimation and hedge effectiveness with multivariate skew distributions

This article proposes to use the three multivariate skew distributions (generalized hyperbolic distribution, multivariate skew normal distribution, and multivariate skew Student-t distribution) for estimating the minimum variance hedge ratio in a dynamic setting. Three criteria for measuring hedge effectiveness are employed: hedging instrument effectiveness, overall hedge effectiveness, and relative-to-optimal hedge ratio effectiveness (RHRE). Three portfolios of spot and futures series are formed for empirical analysis. The outcomes confirm that the three multivariate skew distributions are more helpful in deciding the minimum variance hedge ratio, especially the generalized hyperbolic distribution, than the symmetrical normal and Student-t distributions. This outperformance is significant especially at critical market moments and it is indicated by three hedge effectiveness measures. This advantage is held without the cost of lowering portfolio return. In addition, there is speculation possibility existing in the portfolio hedged by the traditional optimal hedge ratio and this potential can be detected especially by RHRE.     

Technological differences and convergence in the OECD

Abstract. In this paper we test the homogeneity of the technological parameters among OECD countries, which is the maintained hypothesis in most of the empirical growth literature. We first identify differences in the constant term of the convergence equation estimated for the OECD 1960/1990 sample using a fixed- effects estimator. Then we provide a formal test of the homogeneity of technological parameters across groups of countries. We identify at least two different groups within the OECD, with significantly different technologies. Convergence within each group is fast, supporting the notion of club convergence. Nevertheless, the implausible parameter values obtained for the leading technology club casts some doubts on the validity of the Solow model to account for the long run behaviour of this group of countries.     

UNIVERSITY COST STRUCTURE IN TAIWAN

In this paper we demonstrate that the measures of scale and scope economies may be elusive if failing to consider quality variation among universities and endogeneity of congestion in students’ learning and living facility utilization. Empirical results show that the private and highly congested universities have consistently underestimated the cost of congestion, which results in an upward bias in estimating the economies of scale and scope. Taking into account the quality of outputs in enrollments and the congestion factor, we find that the private and the more congested universities have much less scale and scope economies than the public and the less congested institutions. (JEL I21, H52, 9120)     

组织情境中追随动机的概念、模型与测量

追随动机是追随领域的一个重要主题,但到目前为止,学术界对其内容与结构的探讨较少。结合因果取向理论和P-A理论提出了追随动机的概念及模型,并运用质性研究方法初步确定了本土组织情境下追随动机的测量题项;随后以探索性因素分析和验证性因素分析对题项进行了实证检验;最终开发了一个包含2个因子9个题项的测量量表。研究发现,追随动机由关系诉求和参照调节两个一阶因子组成,测量题项具备较好信度与效度。研究结果进一步补充和完善了关于追随动机内容域的认知,有利于推进追随动机理论的实证研究,同时,也为领导者了解和把握追随者心理提供了理论参考。     

Driving restrictions that work? Quito's Pico y Placa Program

Programs to reduce traffic congestion and air pollution by restricting use of motor vehicles on working days have generally not met with success, given existing studies of such programs. We conduct the first study of Quito, Ecuador's four‐year‐old Pico y Placa program and find that it has reduced ambient concentrations of carbon monoxide (CO), a pollutant primarily emitted by vehicles, by 9% to 11% during peak traffic hours. Given that ambient concentrations of CO generally track the spatial and temporal distributions of traffic, these reductions in pollution suggest similar reductions in vehicle flows. We find no significant evidence that traffic has shifted to other times of the day or week, or to other locations.     

The effect of output specification on the optimal policy design for electric utilities

We show that the manner in which the production process is seen when analyzing data on electricity production has an impact on the policy conclusions. In particular, we show that the different specifications of output found in the literature can generate quite diverse views regarding regulation and optimal industry structure, even when using the same data to estimate a cost function. To illustrate this we use information gathered from the Spanish Electric Industry and analyze electricity activities following three approaches: the traditional aggregate activity view, the multistage model and the multioutput-multistage approach. We estimate the degree of economies of scale S and derive marginal costs for all models, plus economies of vertical integration (EVI) for the last two ones. Then we compare these results and verify that the aggregate analysis can mislead policymaking.