Lies,damned lies and statistics: the accuracy of survey responses

That survey research is error prone is not a new idea and different varieties of non-sampling error have been investigated in the literature as well as consideration being given in many statistics textbooks to the issue of sampling error. The paper here considers research upon corporate environmental reporting. It compares information provided by corporate environmental reports with information that survey respondents claim their organization’s environmental report contains. This enables the accuracy of the claims to be assessed. Consideration is given to two different industries the Water industry and the Energy industry. Errors due to inaccurate reporting by survey respondents are shown to be relatively infrequent and respondents appear just about as likely to claim they report information that they do not, in fact, report as to fail to indicate that they report information that is, in fact, actually reported.     

Environmental Taxation and Vertical Cournot Oligopolies: How Eco-industries Matter

This article specifies what an optimal pollution tax should be when dealing with a vertical Cournot oligopoly. Polluting firms sell final goods to consumers and outsource their abatement activities to an environment industry. It is assumed that both markets are imperfectly competitive. Thus, the tax is a single instrument used to regulate three sorts of distortions, one negative externality and two restrictions in production. Consequently, the optimal tax rate is the result of a trade-off that depends on the firms’ market power along the vertical structure. A detailed analysis of Cournot-Nash equilibria in both markets is also performed. In this context, the efficiency of abatement activities plays a key-role. It gives a new understanding to the necessary conditions for the emergence of an eco-industrial sector.      

Competition Policy: What are the Costs and Benefits of Measuring its Costs and Benefits?

Summary  Competition authorities are increasingly measuring the effects of their enforcement actions, seeking a robust justification for the proliferation of competition policy. We highlight the importance of identifying the right counterfactual against which to measure effects, and set out the relevant categories of costs and benefits. We then explore how a balance can be struck between the benefits and inherent limitations of these measurement exercises. Relatively crude analyses of cartel action benefits can be sufficient to achieve public legitimacy for competition policy. Assessing the effects of merger and conduct inquiries is often ambiguous, but could be used to improve decision-making processes. Director and Managing Consultant, respectively, at Oxera, Oxford and London. The valuable comments of Fod Barnes, Kerry Hughes and an anonymous referee are gratefully acknowledged. The opinions expressed in this article are those of the authors alone.     

Determinants of Current Account Imbalances in 16 OECD Countries: An Out-Of-Sample Perspective

We employ panel data as well as country-specific models to uncover empirically the determinants of current account imbalances. We find evidence of slope heterogeneity likely rendering the fixed-effect estimator inconsistent. Mean group estimation is followed to overcome the latter difficulty. Both estimation techniques are evaluated by means of in- and out-of-sample criteria. The mean group estimator outperforms the fixed-effect approach and, moreover, only three economic variables are found to impact on the current account balance significantly. These are the government budget balance, the domestic output gap and the changes of the terms of trade. We finally propose a parsimonious dynamic model of the current account, including only these variables and illustrate that it has similar predictive accuracy as country-specific benchmark models. JEL no. F32, C23, C53     

An Economic Approach to the Psychology of Change: Amnesia, Inertia, and Impulsiveness

This paper examines the effect of memory loss on the continuity of behavior. We consider a player (individual or firm) who remembers previous actions but not underlying rationales. In a stable environment, relative to a full-recall scenario, memory loss increases the probability of following old policies (inertia). In a volatile environment, memory loss can decrease this probability (impulsiveness). The model provides a memory-loss explanation for some documented psychological biases, implies that inertia and organizational routines should be more important in stable environments than in volatile ones, and provides empirical implications relating memory and environmental variables to economic decisions.