Model selection when estimating and predicting consumer demands using international,cross section data

This paper assesses the ability of five structural demand systems to predict demands when estimated with cross sectional data spanning countries with widely varying per capita expenditure levels. Results indicate demand systems with less restrictive income responses are superior to demand systems with more restrictive income effects. Among the least restrictive demand systems considered, An Implicitly, Directly Additive Demand System (AIDADS) and Quadratic Almost Ideal Demand System (QUAIDS) seem roughly tied for best, while the Quadratic Expenditure System (QES) is a close second. Given differences in the characteristics of AIDADS and QUAIDS, it is concluded the former is better suited to instances where income exhibits wide variation and the latter to cases when prices exhibit considerable variation. First Version Received: November 2000/Final Version Received: February 2002 RID="*" ID="*"  The authors acknowledge the insightful comments of two journal referees and Baldev Raj. Bettina Aten kindly provided the data used in this study. Any errors or omissions remain the responsibility of the authors. Partial financial support of the United States Department of Agriculture – National Research Initiative Grant #97-35400-4752 and the Purdue Research Foundation is gratefully acknowledged. An expanded version of this paper is available from the authors upon request. RID="**" ID="**"  Contact author     

Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data

Considerable effort has been exercised in estimating mean returns to education while carefully considering biases arising from unmeasured ability and measurement error. Recent work has investigated whether there are variations from the “mean” return to education across the population with mixed results. We use an instrumental variables estimator for quantile regression on a sample of twins to estimate an entire family of returns to education at different quantiles of the conditional distribution of wages while addressing simultaneity and measurement error biases. We test whether there is individual heterogeneity in returns to education and find that: more able individuals obtain more schooling perhaps due to lower marginal costs and/or higher marginal benefits of schooling and that higher ability individuals (those further to the right in the conditional distribution of wages) have higher returns to schooling consistent with a non-trivial interaction between schooling and unobserved abilities in the generation of earnings. The estimated returns are never lower than 9 percent and can be as high as 13 percent at the top of the conditional distribution of wages but they vary significantly only along the lower to middle quantiles. Our findings may have meaningful implications for the design of educational policies.     

Bitcoin and entrepreneurship: breaking the network effect

This paper explores the question of whether the market process is capable of bringing about a spontaneous monetary switch to a new currency in the presence of strong network effects of the incumbent currency as well as the absence of contingencies such as extreme inflation or political instability. It does so by examining current happenings around Bitcoin. It finds that two mechanisms stand out: the coordinating efforts of the profit-maximizing entrepreneur as well as the ability to use the old and the new currency simultaneously. Specifically, it finds that marginal decisions made by rational agents merely seeking to maximize net private benefit irrespective of the network effect, be it entrepreneurs or users of the new currency, are capable of setting in motion a switch to a new currency. Whether or not these mechanisms play out fully in the case of Bitcoin still remains to be seen.     

A cross section analysis of intra-industry trade in the U.K.

In this paper the inter-industry patterns of intra-industry trade in the United Kingdom are explored. A cross-section econometric model is explained and estimated for the year 1977. Two samples of 37 and 68 observations are tested using a variety of proxies for features of market structure including market concentration, product differentiation and cost conditions. The results suggest that a significant proportion of the inter-industry variation in intra-industry trade can be explained by the model.     

Nonparametric kernel estimation applied to forecasting: An evaluation based on the bootstrap

The results reported in this paper lend support to the nonparametric approach to estimating regression functions. This conclusion is based on a comparison of two sets of eight quarterly forecasts of U.S. hog supply generated by a well specified parametric dynamic model and by nonparametric kernel estimation. Despite the relatively small sample size, the nonparametric point forecasts are found to be as accurate as the parametric forecasts according to the mean square error and mean absolute error criteria. Bootstrap resampling is used to estimate the distributions of the forecast errors. The results of this exercise favour the nonparametric forecasts, which are found to have a tighter distribution.     

Taxation and the quality of entrepreneurship

We study the effect of taxation on entrepreneurship, investigating how taxes affect both the number of start-ups and their average quality. We show theoretically that even with risk neutral agents and no tax evasion progressive taxes can increase entrepreneurial entry, while reducing average firm quality. So called “success taxes” encourage start-ups with lower value business ideas by reducing the option value of pursuing better projects. This suggests that the most common measure used in the literature, the likelihood of entry into self-employment, may underestimate the adverse effect of taxation.     

Improving the accuracy of DEA efficiency analysis: a bootstrap application to the health care foodservice industry

This article analyses the efficiency of health care foodservice operations and its determinants using a Data Envelopment Analysis (DEA) bootstrapping approach. The purpose of using the bootstrapping approach is two-fold: first, to obtain the bias corrected estimates and the confidence intervals of DEA-efficiency scores and second, to overcome the correlation problem of DEA-efficiency scores and to provide consistent inferences in explaining the determinants of health care foodservice efficiency. The approach was implemented on a sample of 89 health care foodservice operations. The results showed the presence of inefficiency in the sample, with an average efficiency level of 72.6%. Further, the results from analysing the determinants of health care foodservice operations provided policy implication regarding the factors that might improve the efficiency of health care foodservice operations.     

Regulating away competition: the effect of regulation on entrepreneurship and employment

Many scholars have worried that regulation deters entrepreneurship because it increases the cost of entry, reduces innovation in the regulated industry, and benefits large firms because they can overcome the costs of complying with regulations more easily than smaller firms. Using novel data on the extent of US federal regulations by industry and data on firm births and employment from the Statistics of US Businesses, we run fixed effects regressions to show that more-regulated industries experienced fewer new firm births and slower employment growth in the period 1998–2011. Large firms may even successfully lobby government officials to increase regulations to raise their smaller rivals’ costs. We also find that regulations inhibit employment growth in all firms and that large firms are less likely to exit a heavily regulated industry than small firms.     

Bias correction and bootstrapping of error component models for panel data: Theory and applications

The wellknown Wallace-Hussain estimator is applied in pooled models with random individual effects, and the magnitude of the bias caused by the estimator is estimated by bootstrap methods. Furthermore, the significance of the bias is tested using an asymptotic test based on the bootstrap results.A preliminary version of this paper was presented at the Econometric Society European Meeting ESEM '88 in Bologna. The authors thank an anonymous referee for helpful comments. The data for one of the applications (the earnings function) are from the German Socio-Economic Panel and we thank the DIW and the Sfb 3 for the permission to use these data.     

The unintended consequences of easy money: How access to finance impedes entrepreneurship

This paper investigates the manner in which economic policy promotes entrepreneurship, and how this relates to the monetary sources of the business cycle. Whilst access to finance is commonly seen as a crucial means to generate economic growth, efforts to expand the money supply beyond the stock of real savings leads to systemic crises. Therefore the admirable policy goal of promoting more credit for entrepreneurs—whether through access to finance, SME support or regional development—can lead to negative unintended consequences.     

Multidimensional affluence: theory and applications to Germany and the US

This article suggests multidimensional affluence measures for the top of the distribution. In contrast to commonly used top income shares, they allow the analysis of the extent, intensity and breadth of affluence in several dimensions within a common framework. We illustrate this by analysing the role of income and wealth as dimensions of multidimensional well-being in Germany and the US in 2007 as well as for the US over the period 1989–2007. We find distinct country differences with the country ranking depending on the measure. While in Germany wealth predominantly contributes to the intensity of affluence, income is more important in the US.     

South African stock return predictability in the context data mining: The role of financial variables and international stock returns

In this paper, we examine the predictive ability, both in-sample and the out-of-sample, for South African stock returns using a number of financial variables, based on monthly data with an in-sample period covering 1990:01 to 1996:12 and the out-of-sample period of 1997:01 to 2010:04. We use the t-statistic corresponding to the slope coefficient in a predictive regression model for in-sample predictions, while for the out-of-sample, the MSE-F and the ENC-NEW tests statistics with good power properties were utilised. To guard against data mining, a bootstrap procedure was employed for calculating the critical values of both the in-sample and out-of-sample test statistics. Furthermore, we use a procedure that combines in-sample general-to-specific model selection with out-of-sample tests of predictive ability to further analyse the predictive power of each financial variable. Our results show that, for the in-sample test statistic, only the stock returns for our major trading partners have predictive power at certain short and long run horizons. For the out-of-sample tests, the Treasury bill rate and the term spread together with the stock returns for our major trading partners show predictive power both at short and long run horizons. When accounting for data mining, the maximal out-of-sample test statistics become insignificant from 6-months onward suggesting that the evidence of the out-of-sample predictability at longer horizons is due to data mining. The general-to-specific model shows that valuation ratios contain very useful information that explains the behaviour of stock returns, despite their inability to predict stock return at any horizon. The model also highlights the role of multiple variables in predicting stock returns at medium- to long run horizons.     

On the median regression for SURE models with applications to 3-generation immigrants data in Sweden

In this paper we generalize the median regression method to be applicable to system of regression equations, in particular SURE models. Giving the existence of proper system wise medians of the residuals from different equations, we apply the weighted median regression with the weights obtained from the covariance matrix of the equations obtained from ordinary SURE method. The benefit of this model in our case is that the SURE estimators utilise the information present in the cross regression (or equations) error correlation and hence more efficient than other estimation methods like the OLS method. The Seemingly Unrelated Median Regression Equations (SUMRE) models produce results that are more robust than the usual SURE or single equations OLS estimation when the distributions of the dependent variables are not normally distributed or the data are associated with outliers. Moreover, the results are also more efficient than is the cases of single equations median regressions when the residuals from the different equations are correlated. A theorem is derived and indicates that even if there is no statistically significant correlation between the equations, using SUMRE model instead of SURE models will not damage the estimation of parameters.     

国外社会创业组织绩效评价模式与整合研究

社会创业组织的存在与社会经济进步和民主治理密切相关,但目前对社会创业组织绩效评价的系统研究还比较缺乏。本文首先从基于社会或财务分析角度以及研究方法与过程角度分别介绍了国外经典的基于平衡计分卡的绩效评价模式、基于投资社会回报的绩效评价方法、基于影响机制的绩效评价模式和基于研究方法论的绩效评价思想,然后构建了一个社会创业组织整合指标体系,旨在为后续研究提供相应的理论分埽与指导框架。     

A tale of minorities: evidence on religious ethics and entrepreneurship

Does Protestantism favour entrepreneurship more than Catholicism does? We provide a novel way to answer this question by comparing Protestant and Catholic minorities using Swiss census data. Exploiting the strong adhesion of religious minorities to their denomination’ ethical principles and the historical determination of the geographical distribution of denominations across Swiss cantons, we find that Protestantism is associated with a significantly higher propensity for entrepreneurship. The estimated difference ranges between 1.5 and 3.2 % points, it is larger the smaller the size of the religious minority, it is mainly driven by prime age male entrepreneurs and it stands up to a number of robustness checks. No effects are found when comparing religious majorities, suggesting that the implications of religious ethical norms on economic outcomes emerge only when such norms are fully internalized.