Discounting and welfare evaluation of policies

We start with the premise that if policy discounting is to have any welfare relevance, one has to accept it being a derivative of a social welfare function (SWF). We show that if that derivative is to have a net present value (NPV) form, then the baseline allocation must be stationary. In addition, we show that at a stationary baseline in an overlapping generations growth economy, the intergenerationally fair discount rate equals the growth rate of per‐capita consumption, which is, roughly, 2% for the United States. This differs from the interest rate, even in the golden rule equilibrium, unless population growth is null. The last result is based on the main theorem in Mertens and Rubinchik (2012) and is demonstrated for a policy space that might naturally arise in applications.     

E-commerce and the market structure of the recorded music industry

In this article, we study the impact of the development of e-commerce on the concentration of the recorded music industry in France, for the period 2003–2010. First, we find that over the whole period, CD sales, measured at the distributor level, are less concentrated online than offline. Second, we find that sales concentration online has increased between the early period of e-commerce (2003–2006) and the later period (2007–2010).     

Cost-effectiveness of combination daclatasvir-sofosbuvir for treatment of genotype 3 chronic hepatitis C infection in the United States

Background: A phase III trial evaluated the efficacy and safety of Daklinza (daclatasvir or DCV) in combination with sofosbuvir (SOF) for treatment of genotype (GT) 3 hepatitis C virus (HCV) patients.

Aim: This study evaluated the cost-effectiveness of DCV?+?SOF vs SOF in combination with ribavirin (RBV) over a 20-year time horizon from the perspective of a United States (US) payer.

Methods: A published Markov model was adapted to reflect US demographic characteristics, treatment patterns, costs of drug acquisition, monitoring, disease and adverse event management, and mortality risks. Clinical inputs came from the ALLY-3 and VALENCE trials. The primary outcome was the incremental cost-utility ratio. Life-years, incidence of complications, number of patients achieving sustained virological response (SVR), and the total cost per SVR were secondary outcomes. Costs (2014 USD) and quality-adjusted life years (QALYs) were discounted at 3% per year. Deterministic, probabilistic, and scenario sensitivity analyses were conducted.

Results: DCV?+?SOF was associated with lower costs and better effectiveness than SOF?+?RBV in the base case and in almost all scenarios (i.e. treatment-experienced, non-cirrhotic, time horizons of 5, 10, and 80 years). DCV?+?SOF was less costly, but also slightly less effective than SOF?+?RBV in the cirrhotic and treatment-naïve population scenarios. Results were sensitive to variations in the probability of achieving SVR for both treatment arms. DCV?+?SOF costs less than $50,000 per QALY gained in 79% of all probabilistic iterations compared with SOF?+?RBV.

Conclusion: DCV?+?SOF is a dominant option compared with SOF?+?RBV in the US for the overall GT 3 HCV patient population.     

Islamic Economics in the Late Ottoman Empire: Menâpirzâde Nuri Bey's Mebâhis-i İlm-i Servet

The existing literature on Islamic economics suggests that Islamic economics is a twentieth-century phenomenon with its roots in medieval Islamic intellectual and theological history, thereby leaving a centuries-long gap in the history of Islamic economic thinking. This study aims at taking a first step towards filling this gap by examining a nineteenth-century example of Islamic economics in late Ottoman economic literature. Suggesting a broader definition of Islamic economics, this article investigates a prominent Ottoman intellectual's efforts to define, reveal, and revive a tradition of Islamic economics in historical and intellectual context.     

The Effect of Joint Auditor Pair Composition on Audit Quality: Evidence from Impairment Tests

Using a sample of firms from France, where the law requires the use of two auditors, we study the effect of auditor pair composition on audit quality by examining a specific account, goodwill impairment. We document that firms audited by a Big 4–non‐Big 4 auditor pair (BS) are more likely to book an impairment and book a larger impairment than firms audited by a Big 4–Big 4 auditor pair (BB) when low‐performance indicators suggest a greater likelihood of impairment. Moreover, firms audited by a BB pair reduce impairment disclosures when they book impairments, while firms audited by a BS pair do not, suggesting lower transparency for firms audited by a BB pair. Our results inform investors and firms in mandatory joint audit regimes, as well as regulators who are considering requiring joint audits.     

Multi-dimensional skills,specialization, and oligopolistic competition in higher education

This paper develops a differentiated products model of school competition that distinguishes among different dimensions that matter in the skill acquisition process. The model predicts that when identical schools compete for students, specialization may arise as a competition strategy. This serves rich students' education goals well. Poorer students, however, may attend schools with specializations that do not cater to their relative strengths. By doing so, these poorer students complement the weaknesses of the richer students through peer effects and receive financial aid in return. The empirical analysis provides strong support for the model's predictions about within-school implications of specialization.     

Economic geography and wages in Brazil: Evidence from micro-data

This paper estimates the impact of market and supplier access on wage disparities across Brazilian states, incorporating the control for individual characteristics into the new economic geography methodology. We estimate market and supplier access disaggregated by industry, and we compute access to local, national and international markets separately. We find a strong correlation between market access and wage differentials, even after controlling for individual characteristics, market access level (international, national or local), and using instrumental variables.     

Inequality and criminality revisited: further evidence from Brazil

The objective of this study is to shed light on the determinants of criminality rates in Brazil. A panel data model was estimated using Brazilian states’ data. Our main result suggests that income inequality plays an important role in the determination of the crime rate. Furthermore, there are evidence suggesting that both unemployment and urbanization rates are positively related to crime. Based on a GMM approach we find the existence of an “inertial effect” on criminality. Besides that, the GMM results show that public security spending is effective in reducing criminality rates. Contrary to the common wisdom, we could not find evidence that poverty increases violent crimes. Finally, we have evidence that income inequality Granger causes crime, but not the reverse.     

Demystifying Fair Trade in France: The History of an Ambiguous Project

In France, Fair Trade arrived on the scene in the late twentieth century, and since then has passed through several experimental phases before becoming an enduring “realistic” economic alternative. To understand the transformation, this article defines Fair Trade as a social construct issues and tensions of which change depending on the point of entry. By conducting a secondary analysis of several data sets from varied sources, including documentary material, interviews, and observations, the authors trace the history of Fair Trade in France, define its introduction as a system, describe its institutionalization, and contribute to a greater understanding of how its ideals have changed and become more professional over time. The analyses reveal that the term “Fair Trade” has become ambiguous, spanning divergent and conflicting ideas and projects, including opening and closing conventional market systems and alter-globalization and anti-globalization.     

What makes you click?—Mate preferences in online dating

We estimate mate preferences using a novel data set from an online dating service. The data set contains detailed information on user attributes and the decision to contact a potential mate after viewing his or her profile. This decision provides the basis for our preference estimation approach. A potential problem arises if the site users strategically shade their true preferences. We provide a simple test and a bias correction method for strategic behavior. The main findings are (i) There is no evidence for strategic behavior. (ii) Men and women have a strong preference for similarity along many (but not all) attributes. (iii) In particular, the site users display strong same-race preferences. Race preferences do not differ across users with different age, income, or education levels in the case of women, and differ only slightly in the case of men. For men, but not for women, the revealed same-race preferences correspond to the same-race preference stated in the users’ profile. (iv) There are gender differences in mate preferences; in particular, women have a stronger preference than men for income over physical attributes.