Forecasting compositional time series

Compositional data sets occur in many disciplines and give rise to some interesting statistical considerations. In recent years, the modelling and forecasting of compositional time series has seen some important developments, although this approach does not seem to be widely known. This paper represents a modest step towards rectifying this. After briefly setting out the basic structure of compositional data sets and outlining the implications for forecasting compositional time series, it illustrates the techniques using three examples: modelling and forecasting expenditure shares in the U.K. economy; forecasting trends in obesity in England; and examining shifts in the proportions of English first class cricketers born during particular quarters of the year.     

Switching Costs in the Wholesale Distribution of Cigarettes

Recent theories of price wars triggered by entry assign a critical role to switching costs in explaining price and output changes. Earlier, Elzinga and Mills (1998) showed that actual switching patterns following an episode of new entry in an industry are driven by the fact that buyers have different switching costs. The current paper draws on transaction-specific price and shipments data surrounding the 1984-1985 price war in generic cigarettes to explore the size and determinants of switching costs among wholesale cigarette distributors. Results show that switching costs vary across firms and are nontrivial in magnitude. Several implications of the findings are discussed.     

An entrepreneurial critique of Georgism

This paper develops a critique of the single-tax proposal of Henry George. We present a simple search-theoretic model for the discovery of natural resources and show that a tax on the unimproved value of land is distortionary. We then consider the time inconsistency and regime uncertainty problem created by even incremental Georgist policy. We discuss historical cases of land reform and the subsequent challenge to re-establish a credible commitment to property rights in land and natural resources.     

Are real estate markets becoming more efficient?

This paper compares real rates of return to housing capital with returns to other forms of fixed reproducible capital. All data are from the national income and capital accounts and are gross of taxes and depreciation. Returns to housing capital have been consistently lower than those to other capital during the fifty-five year period for which data are available. Since 1950, the disparity between returns to housing and other capital has narrowed steadily and substantially. The paper presents speculations as to the reasons for the improvement in capital market efficiency.I am indebted to Robert Godrick and Daniel Siegel for comments on an earlier draft.     

Performance of residential mortgages in low and moderate-income neighborhoods

This paper presents the first data on performance of mortgages on residences located in lowand moderate-income neighborhoods of U.S. cities. It provides new data on delinquencies and foreclosure provided by a sample of lenders who are members of the National Association of Affordable Housing Lenders and who have lending programs established pursuant to the Community Reinvestment Act.Sample mortgages on multifamily dwellings perform comparably with national sample data, whereas sample mortgages on single-family mortgages perform much better than comparable national sample data.The findings of this paper demonstrate clearly that lending programs in lowand moderate-income neighborhoods can be viable. The findings do not, however, help to settle the issue as the racial or gender discrimination in mortgage origination.This paper is based on Performance Analysis of Community Reinvestment Programs, prepared by the athors for the Woodstock Institute, Chicago, IL.     

Plucking models of business cycle fluctuations: Evidence from the G-7 countries

Friedman's `plucking' model, in which output cannot exceed a ceiling level but is occasionally plucked downward by recessions, is tested using Kim and Nelson's formal econometric specification on output data from the G-7 countries. Considerable support for the model is obtained, leading us to conclude that during normal periods, output seems to be driven mostly by permanent shocks, but during recessions and high-growth recoveries, transitory shocks dominate. During these periods macroeconomic models that emphasise demand-oriented shocks, rather than real business cycle type models, may thus be more appropriate. First Version Received: September 2000/Final Version Received: May 2001     

Organization–stakeholder fit: A dynamic theory of cooperation,compromise, and conflict between an organization and its stakeholders

Research Summary : We advance the concept of organization–stakeholder fit (O–S fit) to explain cooperative behavior between an organization and its stakeholders. O–S fit describes the compatibility that exists between an organization and a stakeholder when their characteristics are well matched. We highlight two dimensions of O–S fit: value congruence, or the supplementary fit of organizational and stakeholder values, and strategic complementarity, or the complementary fit of strategic needs and resources. For each dimension, we detail the unique relational factors—including core elements of trust, predictability, attraction/exchange, and communication—that motivate cooperation. We then explicate the ways in which value congruence and strategic complementarity dynamically interrelate over time. Finally, we consider how organization‐stakeholder misfit may result in alternative relational behaviors, such as conflict or compromise. Managerial Summary : We develop a new way of thinking about the relationship between organizations and stakeholders. Recognizing that positive relationships require a degree of fit or compatibility, we argue that cooperative behavior between an organization and its stakeholders is maximized when relational partners share both core values and strategic priorities. We explain that high fit along these two dimensions increases trust, relational predictability, attraction/exchange, and communication. We also describe how positive relationships might be formed with fit along only one dimension, and how negative relationships might result in the presence of misfit. Ultimately, we suggest that managers who want to foster positive relationships with stakeholders should concentrate on aligning their values and priorities, rather than simply concentrating on one or the other.     

Regulating the Platform Economy: How to Protect Workers While Promoting Innovation

The rise of the platform economy has made it a topic of great interest among European policymakers, as evidenced by the European Commission’s 2016 Communication “A European agenda for the collaborative economy”. The regulatory challenges facing policymakers are manifold, ranging from taxation to competition policy to worker protection. Furthermore, many basic aspects of the platform economy are unclear, such as its size, the number of workers who take part in it and, indeed, its very definition. What types of regulation are necessary to ensure that the benefits of the platform economy are maximised for all Europeans? How can the productivity gains associated with the platform economy be distributed throughout society? Perhaps most importantly, how can policymakers support innovation while also protecting consumers, workers and communities?