The supply of education quality in a spatial model with asymmetric moving costs

The paper analyses the characteristics of the supply of higher education in different geographical macroareas using a strategic interaction framework. It focuses on universities operating in centralised funding system that autonomously set the quality of education showing that in equilibrium it is inversely related to students’ moving costs across areas. We show that in the presence of asymmetric information about workers’ ability and asymmetric costs of moving, the only PBE consistent with forward induction involves that only high ability workers acquire education and the quality of education is lower in macroareas where the moving costs are higher. Our model predicts that in economies with centralised university funding, educational policies must be regulated according to the specific socioeconomic characteristics of the area. Direct subsidies to universities may be ineffective in improving the quality of education in the less developed areas. When regional disparities are not too big, efficiency gains may be obtained by reducing moving costs.     

The expectation hypothesis of the term structure of very short-term rates: Statistical tests and economic value

This paper reexamines the validity of the expectation hypothesis (EH) of the term structure of US repo rates ranging in maturity from overnight to 3 months. We extend the work of Longstaff [2000b. The term structure of very short term rates: new evidence for the expectations hypothesis. Journal of Financial Economics 58, 397–415] in two directions: (1) we implement statistical tests designed to increase test power in this context; (2) more important, we assess the economic value of departures from the EH based on criteria of profitability and economic significance in the context of a simple trading strategy. The EH is rejected throughout the term structure examined on the basis of the statistical tests. However, the results of our economic analysis are favorable to the EH, suggesting that the statistical rejections of the EH in the repo market are economically insignificant.     

A latent class conjoint analysis for the Administrative Clerk figure: insights from ELECTUS

Quality & Quantity - ELECTUS is a multi-centre research project with the aim to stabilize the relationship between universities and companies. Through this project, it is possible to acquire...     

WEIGHTED‐AVERAGE LEAST SQUARES (WALS): A SURVEY

Model averaging has become a popular method of estimation, following increasing evidence that model selection and estimation should be treated as one joint procedure. Weighted‐average least squares (WALS) is a recent model‐average approach, which takes an intermediate position between frequentist and Bayesian methods, allows a credible treatment of ignorance, and is extremely fast to compute. We review the theory of WALS and discuss extensions and applications.     

Knightian uncertainty and moral hazard

This paper presents a principal-agent model in which the agent has imprecise beliefs. We model this situation formally by assuming the agent?s preferences are incomplete as in Bewley (1986) [2]. In this setting, incentives must be robust to Knightian uncertainty. We study the implications of robustness for the form of the resulting optimal contracts. We give conditions under which there is a unique optimal contract, and show that it must have a simple flat payment plus bonus structure. That is, output levels are divided into two sets, and the optimal contract pays the same wage for all output levels in each set. We derive this result for the case in which the agent?s utility function is linear and then show it also holds if this utility function has some limited curvature.     

Eliciting,Applying And Exploring Multidimensional Welfare Weights: Evidence From The Field

By combining primary data on dimension importance collected in the field from three different samples and nationally representative survey data from the Dominican Republic, we offer a twofold contribution. The first one comes from an unincentivized questionnaire experiment, where the significance of the treatment effect shows that life domains are valued differently in a poverty vs a well‐being framework. This poses important questions on the anatomy of dimension importance and on the use of weights in empirical analyses, and opens the door to what we call a “concordance paradox” related to the very essence of the constructs of poverty and well‐being. As a second contribution, we employ the sets of weights collected in the field to assess the trend of multidimensional poverty and well‐being in the country. We find that the picking one set of weights or another is not a trivial choice, as they lead to opposite assessment results.     

Relative Deprivation and School Enrolment. Evidence from Mexico

Using a large dataset (2.9 million households), we provide solid evidence of relative deprivation as being a negative correlate of school enrolment in Mexico, absolute standard of living being controlled for. This result is robust to a number of specifications, and to the use of linear and less than linear indices of relative deprivation. In addition, we find that marginal effects of relative deprivation are stronger at higher standards of living and for older children.     

Global liquidity risk in the foreign exchange market

Using a broad data set of 20 US dollar exchange rates and order flow of institutional investors over 14 years, we construct a measure of global liquidity risk in the foreign exchange (FX) market. Our FX liquidity measure may be seen as the analog of the well-known Pastor–Stambaugh liquidity measure for the US stock market. We show that this measure has reasonable properties, and that there is a strong common component in liquidity across currencies. Finally, we provide evidence that liquidity risk is priced in the cross-section of currency returns, and estimate the liquidity risk premium in the FX market around 4.7 percent per annum.     

Lumpiness,capital adjustment costs and investment dynamics

Aggregate investment in the US economy displays a hump-shaped pattern in response to shocks, and the autocorrelation of aggregate investment growth is positive for the first few quarters, turning negative for the later quarters. This paper shows that this feature of the data is the natural outcome of a two-sector consumption/investment model designed and calibrated to reproduce plant-level evidence on capital accumulation.