On levies to reduce the nitrogen surplus: The case of Dutch pig farms

Pig farms in the Netherlands pay a zero or low price for using the environment. As a consequence, the environment is overused. The Dutch government wants to reduce the emissions of nitrogen and phosphorus. Possible instruments are regulation and levies. In this study a levy on feed and a levy on the nitrogen surplus are investigated, by incorporating a bad output in the production model. The model is estimated using panel data of Dutch pig farms over the period 1975–1989. Levies on nitrogen turn out to be more cost-effective than levies on feed.     

Equity Market Liberalization in Emerging Markets

Equity market liberalizations, if effective, lead to important changes in both the financial and real sectors as the economy becomes integrated into world capital markets. The study of market integration is complicated because one can liberalize in many ways and many countries have taken different routes. To study the effectiveness of particular liberalization policies, the sequencing of liberalizations, and the impact on the real economy, systematic methods must be developed to date the liberalization of emerging equity markets. We provide a synthesis of the current methods and show the impact of liberalization on the real sector.     

The Validity of Laboratory Research in Social and Behavioral Science

The validity of artificial situations is often questioned, and particularly so the possibility of transfer of findings to the real world. Such questions, or doubts, may stem from a rigid distinction between real and artificial situations or from too strict a notion of representation. This article will argue that `the real world' does not provide unambiguous criteria for representation and that, moreover, many experiments and simulation games do not have to represent `the real world' in any direct way. Both issues are usually treated under the heading of external validity, which means compliance to conventions that dominated thinking about validity over decades. These conventions need to be reconsidered. Quality standards for research must not be rigid, nor should be applied in a way that ignores the characteristics of a particular research project. Fixed notions about validity may prevent a researcher from adapting validation procedures to the circumstances at hand. The article takes issue with a conception of external validity as surface resemblance between artificial and real situations, advocates an active, non-routine approach to validity questions, and encourages individual researchers to develop a line of reasoning on these questions instead of adhering to standards that may not suit their particular research.     

Analysis of Environmental Efficiency Variation

In this article, we develop and implement a methodology for analyzing the sources of variation in environmental efficiency across producers. We formulate a two–stage model. In the first stage, we use stochastic frontier analysis to estimate both technical and environmental efficiency. In the second stage, we again use stochastic frontier analysis to regress estimated environmental efficiency scores against a variety of technology, physical environment, and management variables. In this stage we estimate the impact of each explanatory variable on environmental efficiency, and we derive conditional estimates of environmental efficiency from the one–sided error component. We illustrate our methodology with an empirical application to a panel of Dutch dairy farms. We find evidence of relatively low levels of environmental efficiency, and we find that environmental efficiency can be improved through a number of policy options, including the provision of farmers with more insight into the nutrient balance of their farms.     

The <Emphasis Type="Italic">β</Emphasis>-variance gamma model

Kuznetsov (Ann Appl Prob, 2009) introduces a 10-parameter family of Lévy processes for which the Wiener-Hopf factors and the distribution of the running supremum (infimum) can be determined semi-analytically. In this text we will examine the numerical performance of this so-called β-family, both in the equity world and in the field of credit risk. In order to do this, we will calibrate a particular member of this family to a vanilla option surface (by means of the Fast Fourier Transform-technique due to Carr and Madan (J Comput Fin 2(4):61–73, 1999) and use the resulting parameters to determine the prices of a digital down-and-out barrier (DDOB) option, written on the same underlying. In a second experiment, we will try and calibrate the model to some real-life credit default swap (CDS) term structures. The parameters of the model under investigation are chosen such that its Lévy density is approximately equal to that of the famous Variance Gamma (VG) process, which will serve as a benchmark. Hence, the former will be referred to as the β-VG model. The option prices will be determined both semi-analytically [using the formulas derived by Kuznetsov (Ann Appl Prob, 2009)] and through a Monte-Carlo simulation. However, the CDS spreads will only be determined semi-analytically, due to the very close relation between pricing DDOB options and determining the par spread of a CDS. Furthermore, in both cases, the results will be compared with the ones obtained using the VG model [Cf. Schoutens (Lévy processes in finance: pricing financial derivatives, Wiley , Chichester, 2003) and, Cariboni and Schoutens (Levy processes in credit risk, Wiley, Chichester, 2009)]. It will turn out that, w.r.t. vanilla option prices, the β-VG model performs almost identically as the VG model, whereas the semi-analytical expressions by Kuznetsov (Ann Appl Prob, 2009) lead to a (fast and) accurate pricing of DDOB options and CDSs.     

Strategic Groups and Inter-Firm Networks In International High-Tech Industries

Strategic partnering and the analysis of strategic groups are two issues which enjoy a growing interest from industrial economists as well as from strategic management scholars. This contribution focuses on two related topics in the discussion on strategic group formation. the first subject addresses the relevance of strategic groups for understanding industry heterogeneity. the other topic covers the question whether companies from particular strategic groups establish strategic links with each other, or whether intra-group rivalry leads to inter-firm cooperation across strategic groups. Although it appears neglected in the literature the possible linking of the analysis of strategic groups with corporate network studies could generate further understanding of the process of strategic group formation. the present contribution focuses on the international information technology industry in order to study the possible symmetry of the structure of strategic group formation and parallel inter-firm networks of strategic partnering empirically.     

Social Employment of Welfare Recipients in Belgium: An Evaluation

In Belgium, welfare agencies receive a subsidy to employ welfare recipients for a period sufficiently long to entitle them to unemployment benefits. We investigate the effect of this programme on the exit rate from welfare. We propose a grouping/IV estimator of the programme effect that eliminates selection bias. The estimator is consistent, even if the selection into the programme depends on the average unobserved characteristics of welfare recipients in a region and in a welfare duration interval. Without correction for selectivity we find that the programme reduces welfare dependence, but after correction this conclusion is reversed.