The Analysis of Poverty Data with Endogenous Transitions*

It is common to analyse poverty data broken down by household or economic status. Implicitly, it is assumed that people change state (for example, single, married, children, no children) for exogenous reasons. If we bring economic behaviour into the problem, then such transitions become endogenous. The data are then insufficient to identify the claims made from them. The distribution of the characteristics of the individuals in the states will be endogenous, and the state average poverty rate will depend on the composition of the individuals in the state as well as on the economic impact of being in that state per se. In this paper, we set out a simple model with endogenous transitions to make our point, and apply this to Family Expenditure Survey data for Britain. We show that our argument has empirical content for Britain.     

Inflation targeting in Brazil: constructing credibility under exchange rate volatility

This paper assesses the challenges faced by the inflation-targeting regime in Brazil. The inflation-targeting framework has played a critical role in macroeconomic stabilization. We stress two important challenges: construction of credibility and exchange rate volatility. The estimations indicate the following results: (i) the inflation targets have worked as an important coordinator of expectations; (ii) the Central Bank has reacted strongly to inflation expectations; (iii) there has been a reduction in the degree of inflation persistence; and (iv) the exchange rate pass-through for “administered or monitored” prices is two times higher than for “market” prices.     

Transitions from home to marriage of young Americans

The paper examines the impact of income on the transitions between home, living independently and first marriage of young Americans. A matching model is outlined, similar to that used in theories of job search, to explain the probability of marriage and living alone. A multiple‐state, multiple‐transition model which allows for correlated heterogeneity on the first and subsequent transitions is estimated. The results show that income has a strong and significant effect. The impact of unobserved heterogeneity is examined in detail. The impact of the young person's earnings on the transitions is explored through simulation. Copyright © 2002 John Wiley & Sons, Ltd.     

What is hospitality?

Some health care organizations looking to improve customer satisfaction have tried to redefine their customers as guests, applying the concept of hospitality to their operations. It is not clear, however, just what hospitality means. This paper reviews the literature of hospitality and proposes a model of hospitality. Some implications for delivering hospitality in a customer service organization are discussed.     

Transformative change towards sustainability: the interaction between organisational discourses and organisational practices

This paper adopts a case study approach to explore the complex process of organisational change towards greater social and environmental sustainability. The case study of a major global financial services organisation involved interviews and examination of company documents, and their website over the period 2000–2014. The rare longitudinal empirical evidence from different sources provides important insights to how companies are responding to increasing demands for sustainable development. Using Laughlin’s [1991. Environmental disturbances and organizational transitions and transformations: some alternative models. Organization Studies, 12 (2), 209–232] pathways of change model, the study investigates the interaction between organisational discourses (i.e. its interpretive schemes) and organisational practices (i.e. design archetypes). The findings demonstrate the centrality of organisational discourses, especially those relating to accounting calculative practices, to radical change towards sustainable development. The paper also contributes to the literature on institutional logics, particularly multiple institutional logics, and how these are implicated in change processes.     

ANTICIPATED UTILITY AND RATIONAL EXPECTATIONS AS APPROXIMATIONS OF BAYESIAN DECISION MAKING*

We study a Markov decision problem with unknown transition probabilities. We compute the exact Bayesian decision rule and compare it with two approximations. The first is an infinite‐history, rational‐expectations approximation that assumes that the decision maker knows the transition probabilities. The second is a version of Kreps' anticipated‐utility model in which decision makers update using Bayes' law but optimize in a way that is myopic with respect to their updating of probabilities. For several consumption‐smoothing examples, the anticipated‐utility approximation outperforms the rational expectations approximation. The rational expectations approximation misrepresents the market price of risk.     

Board composition and operational risk events of financial institutions

We investigate the relation between board composition and operational risk events of financial institutions in the period from 1996 to 2010. Drawing from corporate governance literature, we consider the impact of board characteristics on the likelihood of operational risk events. Overall, our findings suggest that board size is negatively and non-linearly associated with the possibility of operational risk events. For the event types of “Clients, Products, and Business Practices,” and “Internal Fraud and External Fraud,” firms with a higher proportion of independent directors are less likely to suffer from fraud or failure to comply with professional obligations to clients. Our results on age and tenure heterogeneity also indicate that having a more diverse board can have an adverse impact on the board monitoring function. These results can shed new light on board demographics and operational risk management in financial institutions.     

High-Growth Entrepreneurship in Mexico

Research from the United States finds a small percentage of firms are responsible for the great majority of net new job creation. We now have a fairly precise set of stylized facts regarding the characteristics of these high-growth firms (HGFs). However, we have little understanding of HGFs in Latin America. To address this gap, we explore the characteristics of HGFs in Mexico selected by Endeavor, a global business accelerator. We find Mexican HGFs are present in a wide range of industries, including information technology and consumer segments. Several are pursuing strategies targeting base of the pyramid consumers and/or expanding internationally. We conclude with suggestions for future research and policy implications.