Water pricing policies,public decision making and farmers' response: implications for water policy

The problems caused by water scarcity demand important changes in the criteria and objectives of water policies. The agricultural sector in Spain consumes up to 80% of all available hydric resources and the need to increase the efficiency of current uses of water in the agricultural sector is at the core of the country's national water policy. One alternative would be to resort to water pricing policies with the aim of providing incentives to save water consumption although it would inflict a certain degree of income losses to the farmers and raise the revenue collected by the water authorities. The objective of this research is to analyze the effect caused by the application of different water pricing policies on water demand, farmers' income and the revenue collected by the government agency. To undertake this analysis a dynamic mathematical programming model has been built that simulates farmers' behavior and their response to different water pricing scenarios. Empirical application of the model has been carried out in several irrigation districts in Spain covering varied farm regions and river basins. Results show that the effects of alternative pricing policies for irrigation water are strongly dependent on regional, structural and institutional conditions and that changing policies produce distinct consequences within the same region and water district. Thus, equivalent water charges would create widespread effects on water savings, farm income and collected government revenue across regions and districts.     

Unexpected Inflation,Capital Structure,and Real Risk‐adjusted Firm Performance

Managers can improve real risk‐adjusted firm performance by matching nominal assets with nominal liabilities, thereby reducing the sensitivity of real risk‐adjusted returns to unexpected inflation. The net asset value of US equity real estate investment trusts (REITs) serves as a good proxy for nominal assets and, accordingly, we use a sample of US REITs to test our hypothesis. We find that for the firms in our sample: (i) their real risk‐adjusted performance, and (ii) their inflation‐hedging qualities are inversely related to deviations from this ‘matching‐nominals’ argument. In addition to providing managers with a vehicle to maximize real risk‐adjusted performance, our findings also provide investors with the tools to infer inflation‐hedging qualities of equity investments.     

Hungary

Statistical Annex

Hungary     

Is it a Timing or a Probability Effect? Four Simulations and an Application of Transition Rate Models to the Analysis of Unemployment Exit

Among the applications of event history analysis, in the last 10 years the lion's share has been played by proportional transition rate model. This type of models suffers from a major draw-back: it does not allow us to distinguish whether a covariate affects the event timing (the event occurs sooner/later) or the overall probability of the ultimate event occurrence (the chances of occurrence are constantly higher/lower). Thus, a positive/negative effect of a covariate found using a proportional transition rate model might reflect an acceleration/deceleration in the timing of the event and/or a high/low probability of the ultimate event occurrence (Yamaguchi, 1992). This paper shows how this problem can be reformulated in terms of the proportionality/non proportionality of the covariate effects. A twofold solution to disentangle the timing/probability problem is presented: this solution consists of a test of the proportionality of the covariate effects and a computation of the survival function at the end of the time interval studied. Two applications are discussed. The first one is based on four simulated processes. The second is based on an analysis of unemployment exit in Italy, with particular attention being paid to the effects of unemployment benefits. In the conclusion, implications for future applications of event history analysis are discussed.     

The Incidence of Protection on Exports: The Case of Spain, 1870–1913

The aim of this article is to analyze the effects of tariffs on nonprotected sectors through an application of the model of tax incidence of protection to a country and period defined by Heckscher–Ohlin-type specialization and no relevant support to protect exporters, namely, Spain between 1870 and 1913. The consideration of such a case allows us to perform different specifications of the model, based on relative internal prices, through ADL methods that show a negative incidence of protection for exporters, softer in the short term by the influence of income and international prices, and stable through changes in trade policy.     

Temporal mixture ensemble models for probabilistic forecasting of intraday cryptocurrency volume

Decisions in Economics and Finance - We study the problem of the intraday short-term volume forecasting in cryptocurrency multi-markets. The predictions are built by using transaction and order...     

Testing the expectations hypothesis of the term structure with permanent-transitory component models

This study proposes a new application of Permanent-Transitory Component Models (PTCMs) to test the Expectation Hypothesis of the Term Structure (EHTS). Unlike previous approaches, tests based on PTCMs can simultaneously detect departures from rational expectations and time varying term premia. We set out analytically and empirically the links across previous tests and PTCMs. We also show that PTCMs identify an additional restriction for rational expectations, on top of the one-to-one relationship between forward and spot rates, that must be imposed in estimations of term premia. Data for the short-end of the US term structure suggest that both factors contribute to the rejection of the EHTS. Moreover, the empirical estimates of term premia are persistent and exhibit sign fluctuations. Their stochastic properties depend crucially on whether the additional restriction for rational expectations is imposed in estimation.