On the Stability of the Excess Sensitivity of Aggregate Consumption Growth in the USA

This paper investigates whether there is time variation in the excess sensitivity of aggregate consumption growth to anticipated aggregate disposable income growth using quarterly US data over the period 1953–2014. Our empirical framework contains the possibility of stickiness in aggregate consumption growth and takes into account measurement error and time aggregation. Our empirical specification is cast into a Bayesian state‐space model and estimated using Markov chain Monte Carlo (MCMC) methods. We use a Bayesian model selection approach to deal with the non‐regular test for the null hypothesis of no time variation in the excess sensitivity parameter. Anticipated disposable income growth is calculated by incorporating an instrumental variables estimation approach into our MCMC algorithm. Our results suggest that the excess sensitivity parameter in the USA is stable at around 0.23 over the entire sample period. Copyright © 2016 John Wiley & Sons, Ltd.     

Estimating Investment Rigidity within a Threshold Regression Framework: The Case of U.S. Hog Production Sector

This article addresses the issues of investment/disinvestment asymmetry and a possible existence of a sluggish regime in the demand for a quasi-fixed input in the U.S. hog production sector. Adopting a new threshold estimation procedure, quarterly data from 1970 through 2002 are used to estimate a regime-dependent investment demand equation for a quasi-fixed input, taking sows as a proxy. The results support the existence of three regimes over alternative specifications precluding the sluggish regime, confirming the existence of asset fixity in hog production. The results also highlight the importance of accounting for investment rigidity when estimating hog supply and variable input demands.     

Government Contracts and Contractor Behavior

The U.S. government embraces the concepts of privatization and market competition, but the realm of contracting shows that it has not always been able to put its principles into practice. Although the contracting system is supposed to be open and competitive, in recent years the government has often awarded contracts with little or no competitive bidding, has chosen to award mostly cost-plus type contracts that force the government to assume more of the risk, and lacked efficiency in monitoring and overseeing private contractors. While the number and value of contracts have increased, the workforce to oversee these contracts has been reduced, preventing the government from adequately enforcing compliance with the contractors, and the government has not made use of past performance evaluations in its contracting system. Private contractors that do business with the U.S. government are for the most part well-established firms with ample resources and inside contacts; many contracts are still being awarded on preferential treatment and to the larger and well-established contractors.     

Changing social categories in a changing society: studying trends with correspondence analysis

Analytical strategies are discussed to study trends in data from repeated social survey research with correspondence analysis. By adding time to the contingency table, changing social categories can be studied over time with composite, multiple, or joint correspondence analysis. Doing so, one has to assume a stable society. By adding time twice, changing social categories can be studied in the context of their changing society. This last analytical strategy is illustrated with the case of the membership of Dutch broadcasting associations in changing Dutch society of the last decades (1979–2005).     

The worst absolute surplus loss in the problem of commons: random priority versus average cost

A good is produced with increasing marginal cost. A group of agents want at most one unit of that good. The two classic methods that solve this problem are average cost and random priority. In the first method users request a unit ex ante and every agent who gets a unit pay average cost of the number of produced units. Under random priority users are ordered without bias and the mechanism successively offers the units at price equal to marginal cost. We compare these mechanisms by the worst absolute surplus loss and find that random priority unambiguously performs better than average cost for any cost function and any number of agents. Fixing the cost function, we show that the ratio of worst absolute surplus losses will be bounded by positive constants for any number of agents, hence the above advantage of random priority is not very large. I especially thank Herve Moulin for helpful comments and suggestions. I also appreciate the feedback from Justin Leroux and an anonymous referee.     

Travel-time reliability impacts on railway passenger demand: a revealed preference analysis

We study the impact of travel-time reliability on trips made by railway passengers. Unlike most of the studies in this area, which make use of stated preference survey data, we use a revealed preference data set obtained by measuring the railway reliability and the number of season-ticket holders on the Dutch railway network. We make use of six travel-time reliability indicators, including the standard deviation and the 80th minus the 50th percentile of travel time. Our results indicate that the 80th minus the 50th percentile indicator best explains the fluctuations in the number of season-ticket holders. A 10% improvement of this indicator results in a 1.47% increase in the number of season-ticket holders.     

The influence of weather conditions on dairy production

Relatively little attention has been paid in the economics literature to the effects of meteorological conditions on milk production. Meteorological variables can be expected to affect milk production through their impact on the productivity of cows and the production of foodstuff. Rather than including meteorological variables as inputs in the milk production process, we propose a production function where these variables affect the productivity of cows and the production of forage, thereby indirectly affecting milk production. Using production and meteorological data from the Spanish region of Asturias corresponding to 383 dairy farms observed during a six‐year period from 2006 to 2011, the results from our estimated production function show that meteorological variables have a significant impact on milk production. We find that milk production is higher under warm weather conditions due to improvements in forage production.     

Trade regimes and spillover effects of FDI: Evidence from Uruguay

Trade Regimes and Spillover Effects of FDI: Evidence from Uruguay. — This paper examines differences in the character and impact of FDI entering Uruguay during import substitution, pursued until 1973, and the subsequent more outwardoriented trade regime. Regression analysis shows that the labor productivity of local firms is positively related to the presence of older import-substituting MNCs in their industry. The presence of foreign affiliates established after 1973 has no apparent impact on local productivity, but seems to raise the likelihood that local firms engage in exporting. This may be a sign of export spillovers, indicating that local firms may pick up some exportrelated skills from the operations of outward-oriented foreign MNCs.     

The effect of commercial policy on international migration flows: the case of the United States and Mexico

"Microeconomic simulations are performed to determine the impact of liberalized commodity trade on Mexican immigrant supply to the United States. The results suggest that a removal of trade barriers will reduce migration flows, but that the reduction will be fairly modest. Specifically, if both countries move from the levels of protection characteristic of the mid-1960s to completely free trade, the ratio of real U.S.-Mexican wages falls by roughly 18 percent. Using an upper bound for the range of empirical estimates of the wage elasticity of immigrant supply, this implies a maximum reduction in migration flows of 35 percent. A unilateral elimination of trade barriers by the United States reduces Mexican immigrant supply by a maximum of 14 percent."