Retrospective questions: data quality,task difficulty,and the use of a checklist

Data from a national panel study with waves in 1987 and 1991 (N=1257), present evidence of the low accuracy of responses to retrospective questions, concerning both attitudes and behaviour. Applying a split ballot design, it is investigated whether using a checklist improves the response accuracy for a retrospective question about one single event: how respondents (N=363) did obtain the job they had four years ago. Furthermore interaction effects of ‘task difficulty’ are examined. The response accuracy indeed increases by using a checklist; however, this increase is not statistically significant. The expected increase of the checklist effect with higher ‘task difficulty’ appears for longer recall intervals, but not for more frequent changes of jobs. It turned out that for male respondents all the predicted effects are indeed clearly present. But for female respondents the checklist appeared to have no effect, irrespective of the task difficulty. A tentative explanation for this unexpected gender effect is suggested by pointing at indications that the male and female respondents differed in the way they obtained their job.     

Institutionalism versus Orthodoxy

A bstract . Orthodox economics has been quite effective in exploiting equilibrium methodology; equilibrium as a heuristic device, as a theoretical norm, and as a prototype of the scientific method. Also, orthodoxy has contrived the dichotomy of equilibrium-anti-equilibrium to depict institutional thought as being muddled and unscientific. Institutionalists have not successfully countered these attacks, nor have they adequately articulated a comprehensive methodological alternative to orthodoxy. Institutionalists have paid too much attention to the methodological components of institutionalism and have neglected the articulation of a guiding, overall methodology. It is proposed that institutionalists recast the methodological debate by expanding the arena from equilibrium-anti-equilibrium analysis to the broader context of closed versus open systems analysis. This would both help expose the methodological weaknesses of orthodox economics, and demonstrate the relevance and power of institutionalism for socioeconomic investigation.     

Recovering Hicksian Consumer Surplus within a Collective Model: Hausman's Method for the Household

The purpose of this paper is to describe the implications of the collective model of household behavior for the methods used to estimate the economic value of non-marketed environmental resources. After demonstrating how the separability restrictions inherent in the collective model allow individual preference and household income allocation choices to be distinguished, the paper demonstrates how the framework can be used to recover Hicksian consumer surplus. An algebraic example is used to illustrate how the framework can be used in valuing environmental resources.     

Banks’ non-traditional activities under regulatory changes: impact on risk,performance and capital adequacy

Using the big six Canadian chartered banks quarterly financial statements and daily stock market data from 1982 to 2018, we examine the impact of non-interest income on Canadian banks’ risk, performance and capital under the different major regulatory changes made to the Bank Act of Canada. Our results show that Canadian banks’ expansion into non-traditional activities had slightly decreased their risks and significantly improved their performance benefitting from income diversification. Moreover, while adhering to capital adequacy regulation, reshuffling banks’ portfolio towards non-traditional activities did not reduce Canadian banks’ capital ratio. In spite of the re-regulation towards universal banking against ring-fencing, this feature buttresses the effectiveness of capital adequacy regulation in Canada in linking banks capital allocation with their risk taking.     

Credible assignments in coordination games

This paper uses the experimental method to examine an arbiter's ability to determine the outcome of two-person coordination games. All of the arbiter's assignments in the experiments were strict equilibrium points, but some assignments violated payoff-dominance or symmetry. An assignment that corresponds to the game's outcome is a credible assignment. The experiments test the hypothesis that an assignment to a strict equilibrium is a credible assignment. Our subjects did not find the individual rationality and mutual consistency of an equilibrium assignment to be sufficient reason for implementing the assignment when doing so conflicts with payoff-dominance or symmetry.     

Sector-specific capital, “Bang-bang” investment,and the Filippov solution

Bang-bang investment in a two-sector growth model with immobile capital is rational and leads to a unique and globally stable long-run equilibrium along a sliding trajectory. This steady state coincides with the stationary equilibrium in the traditional model with non-sector-specific capital.This article was written while the authors were visiting scholars at Cornell University. We gratefully acknowledge financial assistance from the Erasmus University Trust Fund and the Netherlands Scientific Organization. We would like to thank, without implicating, two anonymous referees, Martijn Herrmann, Jean-Marie Viaene, Claus Weddepohl, and the participants of seminars at the University of Maryland, the University of Montreal, and Erasmus University Rotterdam for perceptive remarks and useful comments. Jeroen Hinloopen and Rien Wagenvoort provided able graphical assistance. The views expressed in this article are those of the authors and not necessarily those of the World Bank.     

Spreads, Depths, and Quote Clustering on the NYSE and Nasdaq: Evidence after the 1997 Securities and Exchange Commission Rule Changes

This paper examines liquidity and quote clustering on the NYSE and Nasdaq using data after the two market reforms—the 1997 order–handling rule and minimum tick size changes. We find that Nasdaq–listed stocks exhibit wider spreads and smaller depths than NYSE–listed stocks and stocks with higher proportions of even–eighth and even–sixteenth quotes have wider quoted, effective, and realized spreads on both the NYSE and Nasdaq. This result differs from the findings by Bessembinder (1999, p. 404) that "trade execution costs on Nasdaq in late 1997 are no longer significantly explained by a tendency for liquidity providers to avoid odd–eighth quotations," and "odd–sixteenth avoidance has little relevance for explaining post–reform Nasdaq trading costs."