Exogenous uncertainty and the identification of structural vector autoregressions with external instruments

We provide necessary and sufficient conditions for the identification (point‐identification) of structural vector autoregressions (SVARs) with external instruments considering the case in which r instruments are used to identify g structural shocks of interest, r ≥ g ≥ 1. Novel frequentist estimation methods are discussed by considering both a “partial shocks” identification strategy, where only g structural shocks are of interest and are instrumented, and a “full shocks” identification strategy, where despite g structural shocks being instrumented, all n=g+(n?g) structural shocks of the system can be identified under certain conditions. The suggested approach is applied to investigate empirically whether financial and macroeconomic uncertainty can be approximated as exogenous drivers of US real economic activity, or rather as endogenous responses to first moment shocks, or both. We analyze whether the dynamic causal effects of nonuncertainty shocks on macroeconomic and financial uncertainty are significant in the period after the global financial crisis.     

Understanding purchase determinants of luxury vintage products

Despite increasing interest toward luxury vintage products, companies often struggle to understand why consumers buy those products. This article is aimed to advance knowledge about luxury vintage product consumption by identifying the latent determinants of Italian consumers? purchasing of these products. The article utilizes the means‐end chain (MEC) approach and the laddering interview technique to achieve this goal. Results show that consumers buy luxury vintage products mainly to satisfy their individual identity, improve their self‐confidence, and achieve a sense of fulfillment. The hierarchical value mapping resulting from the MEC analysis demonstrates that luxury vintage product consumption is undeniably aimed to improve consumers? perception of their desired and ideal individual self‐image. The article discusses the managerial implications of the study, along with its limitations and directions for future research.     

Uncertainty about fundamental,pessimistic and overconfident traders: a piecewise-linear maps approach

Decisions in Economics and Finance - We analyze a financial market model with heterogeneous interacting agents where fundamentalists and chartists are considered. We assume that fundamentalists are...     

Criminal mobility,fugitives, and extradition rules

Two countries set their enforcement noncooperatively to deter native and foreign individuals from committing a crime in their territory. Crime is mobile, ex ante (migration) and ex post (fleeing), and criminals hiding abroad after committing a crime in a country must be extradited. When extradition is not too costly, countries overinvest in enforcement: insourcing foreign criminals is more costly than paying the extradition cost. When extradition is sufficiently costly, instead, significant enforcement may induce criminals to flee the country whose law they infringed on. The fear of paying the extradition cost enables the countries to coordinate on the efficient outcome.     

Celebrating the Memory of Corrado Gini: a Personality Out of the Ordinary

Corrado Gini was one of the most brilliant and internationally recognized scientists of the Italian School of Statistics. This paper, written on the occasion of the 50th anniversary of his death, recalls the key aspects of his life and his extraordinary scientific contributions. In describing his impressive mind, interdisciplinary interests, his long and significant academic life, his immense scientific production, and his commitment to official statistics, we must also take into account the particular historical period that Gini lived in. But the most relevant and honourable of his acknowledgements is the impact he undeniably had and still has on the international scientific community of statisticians and non‐statisticians.     

ORGANIZATIONAL CHANGE,SKILL FORMATION,HUMAN CAPITAL MEASUREMENT: EVIDENCE FROM ITALIAN MANUFACTURING FIRMS

Abstract This paper emphasizes the role of labour demand as a determinant of human capital formation. After a section in which the alternative conceptions on the functioning of labour markets are presented and different ways of measuring human capital are compared, an applied analysis is carried out in which we provide a labour‐demand‐oriented measure of human capital, as defined by the amount of specific skills firms generate through work‐based training (WBT) activities. By merging three rich firm‐level datasets, we estimate the impact of a set of variables supposed to affect both the propensity to invest in WBT and the intensity of training within the Italian manufacturing industry over the period 2001–2005. Special attention is devoted to the variables characterizing within‐firm organization of knowledge, organizational change and the formation of competence pipelines: among them, innovation, internationalization commitment, out‐sourcing and new hirings. The estimates show that the effect of innovation on WBT is higher when the introduction of new technologies is supported by organizational innovations. When looking at the nature of WBT, we investigate the different determinants of the firms' propensity to provide both in‐house and outside training. We measure training intensity in terms, respectively, of the number of provided training activities, private and total training costs and share of trainees.     

Including cost income ratio into utility function as a way of dealing with ‘exploding’ implicit prices in mixed logit models

The estimates of mean WTP are typically of main interest in non-market valuation studies. In the case of mixed logit models the distribution of WTP for an attribute is derived from the distribution of the ratio of individual coefficients. Since the cost coefficient enters the denominator, its distribution plays a major role in the distribution of WTP. A standard practice in analysing the data from choice experiments is to assume the cost coefficient is fixed, which implies that there is no heterogeneity in price sensitivity. The three most commonly given reasons for this are: (i) the distribution of the marginal willingness-to-pay for an attribute is then simply the distribution of that attribute's coefficient; (ii) in this way analysts wish to restrict the price variable to be non-positive for all individuals; and (iii) analysts avoid assuming log-normal cost because it is often found to produce behaviourally implausible estimates. Constraining a price coefficient to be fixed can however have serious consequences, i.e. a constant price coefficient implies that the standard deviations of unobserved utility is the same for all observations which can lead to biased results. Respondents are also likely to vary in price sensitivities, thus ignoring this variation can lead to erroneous interpretation and conclusions. In this paper we demonstrate a choice experiment exercise in which specifying a log-normal cost results in implausibly large WTP, however, adding into the utility function the cost income ratio prevents implicit prices from ‘exploding’.     

Measuring the effect of M&A on patenting quantity and quality

I explore the effect of M&A on the patenting quantity and quality of the firms involved in a deal. Three measures of quality are considered: impact, generality, and originality. The impact of a patent denotes its influence on future inventions. Generality refers to a patent's applicability across technological fields. Finally, the originality of a patent indicates the extent to which an invention synthesizes diverse technological inputs. Applying a matching estimator to data from the U.S. ‘medical devices and photographic equipment’ industry from 1988 to 1996, I find that M&A have a positive effect on patenting output, but decrease patent impact, originality, and generality. Copyright © 2011 John Wiley & Sons, Ltd.