Semiparametric estimation of a censored regression model with an unknown transformation of the dependent variable

This paper presents a method for estimating the model Λ(Y)=min(β′X+U, C), where Y is a scalar, Λ is an unknown increasing function, X is a vector of explanatory variables, β is a vector of unknown parameters, U has unknown cumulative distribution function F, and C is a censoring threshold. It is not assumed that Λ and F belong to known parametric families; they are estimated nonparametrically. This model includes many widely used models as special cases, including the proportional hazards model with unobserved heterogeneity. The paper develops n^1/2-consistent, asymptotically normal estimators of Λ and F. Estimators of β that are n^1/2-consistent and asymptotically normal already exist. The results of Monte Carlo experiments illustrate the finite-sample behavior of the estimators.     

Testing a parametric quantile-regression model with an endogenous explanatory variable against a nonparametric alternative

This paper is concerned with inference about a function g that is identified by a conditional quantile restriction involving instrumental variables. The paper presents a test of the hypothesis that g belongs to a finite-dimensional parametric family against a nonparametric alternative. The test is not subject to the ill-posed inverse problem of nonparametric instrumental variable estimation. Under mild conditions, the test is consistent against any alternative model. In large samples, its power is arbitrarily close to 1 uniformly over a class of alternatives whose distance from the null hypothesis is proportional to n^−1/2, where n is the sample size. Monte Carlo simulations illustrate the finite-sample performance of the test.     

Managing a scarce resource in a growing Asian economy: Water usage in Hong Kong

An econometric analysis of Hong Kong's monthly per capita water usage for the 25-year period of April 1985 through March 2010 reveals that per capita usage is insensitive to price but dependent upon past usage, per capita income, weather, and seasonal factors, with rising income countering what would otherwise be a downward trend. Given Hong Kong's current inflationary environment and large government budget surplus, these findings affirm the Hong Kong Water Supplies Department's adopted strategy of total water management towards sustainable use of water resources, in lieu of either periodic service interruption or price increases as policy instruments.     

On whether to prosecute suspected price-fixing conspi racies: A hypothesis-testing approach

This paper analyses the antitrust policy decision of whether to sue prosecute a suspected price-fixing cartel. The analysis is conducted in the Bayesian hypothesis-testing mode, using a Cournot market. framework. This approach recognizes that the decisions to instilute an investigation, file suit, or go to trial, are all binary decisions that involve testing a null hypothesis: notably. the hypothesis that the antitrust laws have not been violated versus the alternative hypothesis that they have been violated. Rejecting the null hypothesis is equivalent to electing to proceed along the prosecution path. The paper demonstrates that formalization of the decision-making process can help to enhance our understanding of the factors that underlie the various decisions, and particularly how those factors can influence the decisions, and provides guldellnes for antllrust administration under the current U. S. antitrusl laws.     

Copy watches,tailored clothes,and the structure→conduct→performance paradigm

This paper explores the classic structure → conduct → performance paradigm in the context of the industrial structure of Hong Kong. It is shown that, notwithstanding the absense of a few dominant producers and the on-going restructuring of the manufacturing sector, even in a ‘quasi-developed’ open economy such as that of Hong Kong the paradigm gleans strong empirical support.