A putty-clay vintage model for sectors of industry in the Netherlands

Summary A putty-clay vintage model has been estimated for five industrial sectors: food, beverages and tobacco manufacturing; textiles, clothing and footwear manufacturing; chemical industry and oil refineries; metal manufacturing, and total manufacturing. Substitutabilityex ante between labour and capital appeared to be small in the first four sectors, with textiles, clothing and footwear manufacturing as an exception. Substitutabilityex ante in total manufacturing industry is rather high: an elasticity of substitution of –0.74. Embodied technical progress is strong in all industrial sectors. In textiles, clothing and footwear manufacturing and in total manufacturing it is both labour- and capital-augmenting in nature. In the other sectors it is mainly of the labour-augmenting variety.This research has partly been made possible by a grant of the National Programme of Labour Market Research (NPAO). Advice by Professor Th. van de Klundert and Mr. A.H. van Zon is gratefully acknowledged.     

Option valuation with long-run and short-run volatility components

This paper presents a new model for the valuation of European options, in which the volatility of returns consists of two components. One is a long-run component and can be modeled as fully persistent. The other is short-run and has a zero mean. Our model can be viewed as an affine version of Engle and Lee [1999. A permanent and transitory component model of stock return volatility. In: Engle, R., White, H. (Eds.), Cointegration, Causality, and Forecasting: A Festschrift in Honor of Clive W.J. Granger. Oxford University Press, New York, pp. 475–497], allowing for easy valuation of European options. The model substantially outperforms a benchmark single-component volatility model that is well established in the literature, and it fits options better than a model that combines conditional heteroskedasticity and Poisson–normal jumps. The component model's superior performance is partly due to its improved ability to model the smirk and the path of spot volatility, but its most distinctive feature is its ability to model the volatility term structure. This feature enables the component model to jointly model long-maturity and short-maturity options.     

Houses of Experiment: Modern Housing and the Will to Laboratorization

This article adds historical and geographical specificity to the link between city building and laboratorization processes. It does so by way of the example of housing in mid‐twentieth‐century Britain. Housing provision at this time saw an intensification of the relationship between architectural design and science by way of the emergent field of building science as well as new social‐science studies of householder satisfaction. The article focuses on two examples of these housing sciences, tracing their role in the production of British modern housing. The first example focuses on a set of experiments conducted on ventilation and heating at Britain's Building Research Station. The second example examines the social science of a post‐occupancy study of multi‐storey flats in Glasgow. The article argues that mid‐twentieth‐century housing construction and provision was structured in and through a laboratory logic that had a complex geography and temporality. In the sciences of housing conducted during this period there is a conflation and hybridization of the space of the laboratory, the site of the house and the action of the experiment.     

Experimental comparison of Web, electronic and mail survey technologies in operations management

With the growing acceptance of the Web (Internet) and electronic mail, it is no surprise that researchers are using an increasingly diverse set of survey technologies to gather data from managers. However, the effectiveness of these electronic technologies has not been rigorously assessed, especially for gathering data from establishment-level surveys (i.e. firm- or plant-level). To that end, a stratified sample of large and small, service and manufacturing firms was constructed, followed by random assignment to one of four survey technologies: mail, fax, PC disk-by-mail and Web-page survey (combined with e-mail notification). For each treatment, managers are queried about their use of forecasting characteristics, yielding a sample of 118 firms. Unfortunately, only a low percentage (34%) of firms and managers assigned to the Web technology treatment both reported access to e-mail and were willing provide their e-mail addresses; they tended to be large firms and from the service sector. Moreover, those that did offer e-mail addresses were only about half as likely to respond to the Web-based survey as those targeted by other survey technologies. However, Web, fax and disk-by-mail technologies yielded higher item completion rates than mail. Limited statistical evidence indicated that respondents using computer-based survey technologies (i.e. Web or disk-by-mail) generally reported forecasting characteristics that are associated with firms exhibiting best practices. Thus, a multi-technology survey approach using the Web and fax can yield a strong combination of benefits over a traditional mail survey.     

Information Content of Advertising in the United States,Japan, South Korea,and the People's Republic of China

The results of this four country-four media study indicate that different countries/cultures have varying degrees of information cues in their advertising. Broadcast media (television and radio) have lower information content than do print media (magazine and newspaper) in all countries. Overall, the average number of cues per advertisement for all four countries was: 3.10 for magazine, 2.91 for newspaper, 2.14 for television, and 2.05 for radio. The study found that the information content (number of cues) and the type of cues varied by media within each country. This implies that international advertisers need to consider their strategies in developing advertising themes for various target audiences in different countries.     

Is Prescott right? Welfare state policies and the incentives to work, learn, and retire

This paper bolsters Prescott’s (Fed. Reserve Bank Minneap. Q. Rev. 28(1):2–13, 2004) claim that high taxes are responsible for lackluster labor market performance in Continental European countries. We develop a life-cycle model with endogenous skill formation, endogenous labor supply, and endogenous retirement. Labor taxation distorts not only labor supply, but also education and retirement decisions. Actuarially unfair pensions further exacerbate labor tax distortions on retirement. Education subsidies can nevertheless cushion the adverse impact of taxation on skill formation. Feedbacks between education, labor supply, and retirement are important. The model is simulated with realistic behavioral elasticities that are consistent with microeconometric evidence. If, besides labor supply, also learning and retirement are endogenous, the uncompensated (compensated) elasticity of the tax base equals 0.46 (0.85), which is more than twice as large as the standard uncompensated (compensated) labor supply elasticity of 0.18 (0.40). Furthermore, life-cycle interactions between education, working, and retirement are quantitatively important and the interactions raise all behavioral elasticities substantially. For example, the uncompensated labor supply elasticity increases with one-half due to life-cycle interactions (to 0.26). We demonstrate that low European labor supply can be fully explained by taxation without relying on unrealistically high labor supply elasticities. Reducing labor market distortions, cutting benefit levels, lowering tax rates, and making (early) retirement actuarially more fair, therefore, boosts labor supply, delays retirement, and stimulates skill formation. In addition, high education subsidies are needed in large welfare states to offset explicit and implicit tax burdens on human capital investment.