Methods for computing marginal data densities from the Gibbs output

We introduce two estimators for estimating the Marginal Data Density (MDD) from the Gibbs output. Our methods are based on exploiting the analytical tractability condition, which requires that some parameter blocks can be analytically integrated out from the conditional posterior densities. This condition is satisfied by several widely used time series models. An empirical application to six-variate VAR models shows that the bias of a fully computational estimator is sufficiently large to distort the implied model rankings. One of the estimators is fast enough to make multiple computations of MDDs in densely parameterized models feasible.     

Some Useful Concepts for Development Economics in the Tradition of Latin American Structuralism

The aim of this article is to provide a selective account of some of the most important conceptual contributions of the Latin American structuralist tradition to the area of development economics. We argue that this account may help modern development economics theory overcome visible limitations and develop in a more fruitful way. We trace back the origin of these conceptualizations and identify some recent and scant efforts to incorporate them into the mainstream economic development literature. We try to clarify the meaning of the concepts and amplify their current economic significance for developing countries. The constructs selected are: (1) structural change, (2) structural disequilibrium, (3) bottlenecks, (4) structural heterogeneity, (5) endogenous nucleus of technological dynamization, (6) social disarticulation, and (7) conflict‐led instability.     

Team reasoning theory: an experimental analysis of common reason to believe and social distance

The aim of this paper is to study the role of the “common reason to believe” (Sugden in Philos Explor 16:165–181, 2003) and the reduction of social distance within the theory of team reasoning. The analysis draws on data collected through a Traveler’s Dilemma experiment. To study the role of the common reason to believe, players’ beliefs in their counterparts’ choices are elicited, and the correlation between the endorsement of team reasoning and beliefs is considered. The relation between social distance and team reasoning is analyzed by introducing a meeting between the two players after the game. We show that the common reason to believe appropriately explains the internal logic of team reasoning and that a reduction of social distance does not produce any statistically significant effect on the probability that team reasoning will be used.     

Monetary announcements and stock prices in Israel

Responses of stock prices to monetary announcements in Israel are examined. Only the unexpected part of monetary injection announcements are found to have a significant impact on stock prices. Unlike findings for the U.S., this impact is positive.     

Estimating food demand in Paraguay from household survey data

We estimate a food demand system in Paraguay based on the 1997 national household survey, considering 12 food categories. To obtain demand elasticity estimates from household survey data accounting for quality effects, measurement errors, and censored observations, price indexes are obtained from ordinary least squares predictions of changes in unitary values caused by spatial and temporal variations, and the two‐step estimation procedure ( Shonkwiler and Yen, 1999 ) is applied. Our approach yields reasonable estimates of combined quantity and quality responses with respect to price. Results suggest distinct consumption behavior in urban and rural areas, particularly for chicken, eggs, dairy, and fats and oils, which are likely because of differences in the food distribution system and availability of nonmarket food sources.     

Forward-looking portfolio selection with multivariate non-Gaussian models

In this study, we suggest a portfolio selection framework based on time series of stock log-returns, option-implied information, and multivariate non-Gaussian processes. We empirically assess a multivariate extension of the normal tempered stable (NTS) model and of the generalized hyperbolic (GH) one by implementing an estimation method that simultaneously calibrates the multivariate time series of log-returns and, for each margin, the univariate observed one-month implied volatility smile. To extract option-implied information, the connection between the historical measure P and the risk-neutral measure Q, needed to price options, is provided by the multivariate Esscher transform. The method is applied to fit a 50-dimensional series of stock returns, to evaluate widely known portfolio risk measures and to perform a forward-looking portfolio selection analysis. The proposed models are able to produce asymmetries, heavy tails, both linear and non-linear dependence and, to calibrate them, there is no need for liquid multivariate derivative quotes.     

Microfinance,subsidies and local externalities

We analyse equilibrium borrowers’ effort and the cost of microcredit loans in the presence of moral hazard, project correlation and subsidies under group lending conditions. Our results show that under the assumption of endogenous effort, project correlation has significant effects on borrowers’ effort only when it is determined by asymmetric (positive or negative) shocks. These findings indicate that the well-known negative effect of within-group (symmetric) project correlation on group lending with joint liability disappears once endogenous effort is taken into account. We also analyse the effects of subsidised lending (and asymmetric correlation) on the relative convenience (in terms of borrowers’ effort) of the alternative (1) between group lending and individual lending with notional collateral and (2) among three different market structures of the microfinance industry.     

Toward a Model of Understanding Strategic Decision‐Making in Micro‐Firms: Exploring the Australian Information Technology Sector

This study explores strategic decision‐making (SDM) in micro‐firms, an economically significant business subsector. As extant large‐ and small‐firm literature currently proffers an incomplete characterization of SDM in very small enterprises, a multiple‐case methodology was used to investigate how these firms make strategic decisions. Eleven Australian Information Technology service micro‐firms participated in the study. Using an information‐processing lens, the study uncovered patterns of SDM in micro‐firms and derived a theoretical micro‐firm SDM model. This research also identifies several implications for micro‐firm management and directions for future research, contributing to the understanding of micro‐firm SDM in both theory and practice.     

Why Do We Buy Traditional Foods?

Consumer behavior toward traditional specialties varies according to the cultural context of consumption. It thus becomes crucial to develop marketing strategies that target segments with different levels of familiarity with food. Our article purposes to analyze the purchase drivers of traditional foods known to consumers because of their reiterated consumption. The importance of the product’s attributes, the purchasing motivations, and the information channels are studied by applying the CUB model, which utilizes a probabilistic structure that simulates the individual’s psychological mechanism in adopting a choice of preference. The case study is that of extra-virgin olive oil in Italy, where this product is a fundamental element of the culinary tradition. The results show that in the ambit of traditional specialties, in contexts of elevated familiarity, the traditional information channels of marketing are less effective and call for strategies based on a more direct connection between consumer and producer.