MEASURING INEQUALITIES: DO HOUSEHOLD SURVEYS PAINT A REALISTIC PICTURE?

The paper addresses the issue of the accuracy of standard‐of‐living measurements using household survey data. First, it highlights the fact that lighter data collection processes in some developing countries have added to measurement errors in consumption and income aggregates measurement errors. The paper reasserts the need to apply reference guidelines to the measurement of household consumption in order to compute comparable distribution indicators across countries and over time. Second, it contends that it is hard to analyze inequality solely from consumption patterns without taking income and savings into account. Two solutions are proposed for the correction of income measurement errors: by using savings declarations and by implementing a multiple imputation procedure. The results are based on a careful analysis of the EPM93 survey of Madagascar whose design is quite close to the LSMS household surveys, and the ENV98 survey of Côte d'Ivoire representative of surveys conducted nowadays in most Sub‐Saharan African countries.     

The capability approach as a framework for assessing the role of microcredit in resource conversion: the case of rural households in the Madagascar highlands

This article applies the capability approach in order to analyse microcredit as a tool for resource conversion, which permits poor households to take advantage of latent opportunities. This approach calls for linking microcredit with the choices of the poor themselves. A sample of 290 rural households from the Madagascar highlands was surveyed over two consecutive years. To identify the most relevant dimensions of poverty available for a conversion process, data were processed using factor analysis. A hierarchical classification then permitted the distribution of the households over three capability levels. Finally, an ordered multinomial logit brings out how microcredit influences the likelihood that a household receiving such a loan will reach a higher capability level. The main findings indicate that microcredit represents a robust means to obtain a higher level of capability. Moreover, when the process of borrowing endures, poor households enter into a learning process that increases the effect of microcredit. Regardless of the gender of the household head, microcredit increases the probability of reaching an enhanced level of capability, except for the poorest households headed by a woman. The head of household’s level of education only improves the effect of microcredit if the productive system implemented needs specific competencies related to educational attainment.     

Term structure modelling for multiple curves with stochastic discontinuities

Finance and Stochastics - We develop a general term structure framework taking stochastic discontinuities explicitly into account. Stochastic discontinuities are a key feature in interest rate...     

Aid,growth and institutions in Sub‐Saharan Africa: New insights using a multiple growth regime approach

Numerous sub‐Saharan African countries depend heavily on foreign aid. This paper explores the impact of foreign aid on economic growth in the continent using a finite mixture model. Contrary to previous studies, we hypothesise that the effect of aid on growth differs across groups of countries with similar but unobserved characteristics. The paper incorporates the potential presence of hidden heterogeneity and tries to explain group membership of countries by using various metrics of institutional variables. Focusing on a sample of 25 countries, we find that the impact of foreign aid on growth differs across three different groups of countries. Moreover, we find that aid works best in countries with effective government, good regulatory quality and low corruption. The results are robust to a battery of robustness checks. The paper underlines the importance of incorporating the heterogeneity in growth process in studies on aid effectiveness and provides evidence that sub‐Saharan African countries should undertake deep governance reforms to benefit from foreign aid.     

How To Be a ‘Wise’ Researcher: Learning from the Aristotelian Approach to Practical Wisdom

Journal of Business Ethics - How can you act ethically in a publication system that attempts to regulate research activity in a way that you might find, in many respects, to be unethical? In this...     

Local stakeholders’ perception of muddy flood risk and implications for management approaches: A case study in Alsace (France)

The inventory of muddy floods in France indicates that the occurrence of these events seriously increased in the North West and the East of the country. Muddy floods triggering can largely be explained by physical characteristics such as a hilly topography, soils prone to crust, and/or heavy rainfall in spring. Although the physical processes are well known by now and despite increasing information about the need of mitigation measures, no significant reduction of these disasters has been registered. Therefore, this should be explained by factors others than scientific reasons or technical knowledge acquisition difficulties.     

Financial systems in financial crisis — An analysis of banking systems in the EU

This Forum aims to systematically describe and analyse the evolution of national financial systems within the EU over the past three decades. It analyses the processes of financialisation that have dominated this period as well as the causes and consequences of the financial crisis from the perspectives of five individual member states — Germany, France, the UK, Italy and Spain. Furthermore, policy proposals which could change the role of the financial system to better serve economic and social objectives are also put forward.     

Cost-effectiveness of telaprevir in combination with pegylated interferon alpha and ribavirin in previously untreated chronic hepatitis C genotype 1 patients

Background:

Telaprevir (T, TVR) is a direct-acting antiviral (DAA) used for the treatment of genotype 1 chronic hepatitis C virus (HCV) infection. The sustained virological response (SVR) rates, i.e., undetectable HCV RNA levels 24 weeks after the end of treatment, is what differentiate treatments. This analysis evaluated the cost-effectiveness of TVR combined with pegylated interferon (Peg-IFN) alfa-2a plus ribavirin (RBV), with Peg-IFN and RBV (PR) alone or with boceprevir (B, BOC) plus Peg-IFN alfa-2b and RBV, in naïve patients.

Methods:

A Markov cohort model of chronic HCV disease progression reflected the pathway of naïve patients initiating anti-HCV therapy. SVR rates were derived from a mixed-treatment comparison including results from Phase II and III trials of TVR and BOC, and trials comparing both PR regimens. SVR has significant impact on survival, quality-of-life, and costs. Incremental cost per life year (LY) gained and quality-adjusted-life-year (QALY) gained were computed at lifetime, adopting the (National Health Service) NHS perspective. Cost and health outcomes were discounted at 3.5%. Uncertainty was assessed using deterministic and probabilistic sensitivity analyses. Sub-group analyses were also performed by interleukin (IL)-28B genotype and fibrosis stage.

Results:

Higher costs and improved outcomes were associated with T/PR relative to PR alone, resulting in an ICER of £12,733 per QALY gained. T/PR retained a significant SVR advantage over PR alone and was cost-effective regardless of IL-28B genotype and fibrosis stages. T/PR regimen ‘dominated’ B/PR, generating 0.2 additional QALYs and reducing lifetime cost by £2758. Sensitivity analyses consistently resulted in ICERs less than £30,000/QALY for the T/PR regimen over PR alone.

Limitations:

No head-to-head trial provides direct evidence of better efficacy of T/PR vs B/PR.

Conclusion:

The introduction of TVR-based therapy for genotype 1 HCV patients is cost-effective for naïve patients at the £30,000 willingness-to-pay threshold, regardless of IL-28B genotype or fibrosis stage.     

Fundamentalists,chartists and asset pricing anomalies

This paper investigates whether excess volatility of asset prices and serial correlations of stock monthly returns may be explained by the interactions between fundamentalists and chartists. Fundamentalists forecast future prices cum dividends through an adaptive learning rule. In contrast, chartists forecast future prices based on the observation of past price movements. Numerical simulations reveal that the interplay of fundamentalists and chartists robustly generates excess volatility of asset prices, volatility clustering, trends in prices (i.e. positive serial correlations of returns) over short horizons and oscillations in prices (i.e. negative serial correlations of returns) over long horizons, often observed in financial data. Moreover, we find that the memory of the learning rule plays a key role in explaining the above-mentioned stylized facts. In particular, we establish that excess volatility of asset prices; volatility clustering and autocorrelation of returns at different horizons emerge when fundamentalists have short memory. However, volatility clustering as well as short-run and long-run dependencies, observed in financial time series, are more pronounced when fundamentalists have longer memory.