Temperature,rainfall and economic growth in Africa

Following a recent line of research, this paper investigates the aggregated effects of temperature and rainfall on economic growth in Africa. Our econometric approach is based on a reduced-form model and takes account explicitly of parameter heterogeneity and cross section dependence, relying on ARDL modelling and panel estimators with multifactor structures. We find clear supportive evidence of short- and long-run relations between temperature and per-capita GDP growth, while the role played by rainfall appears to be less important and the evidence on its statistical significance is less clear-cut. Very similar results are reported when the analysis is carried out by focusing solely on Sub-Saharan African countries or considering GDP growth per worker. This evidence is in sharp contrast to the results obtained via standard MG estimation and this confirms that, by not controlling for cross section dependence, traditional panel estimators are likely to provide misleading inference. The empirical results suggest that, far from adapting quickly to weather shocks, African economies appear to be significantly damaged by them. In the absence of corrective measures, the current trends in climate change may impose a progressively heavier burden on African countries.     

The effect of low-cost air transportation on the local economy: Evidence from Southern Italy

This paper investigates how the entry of low-cost carriers in Southern Italy has supported local and regional economic development in different ways: spreading the traffic demand during the year, increasing the rate of international tourism, generating new jobs and improving the income of the area. The evidence of traffic de-seasonality is quantified by an index, resulting in a decrease to all those airports specialized in low-cost services. Additionally, an assessment shows that the net impact driven by a low-cost route on the local economy is about €14.6 million per year.     

The Impact of Payoff Interdependence on Trust and Trustworthiness

Abstract. In one‐shot investment games where each player's payoff is a convex combination of own and other's profit, we measure trust by the amount given to the trustee and trustworthiness by the amount returned to the trustor by the trustee. Does the degree of payoff interdependence increase both trust and trustworthiness or one but not the other or neither of them? According to our experimental data, trust remains unaffected by the extent of interdependence whereas trustworthiness reacts positively to it.     

Modelling dynamic storage function in commodity markets: Theory and evidence

In this work, we derive a model to investigate the optimal storage policy in metal commodity markets. From an inter-temporal setting, we carry out a criterion driving the stockholding decisions based on Tobin's q rule in which marginal benefits from holding inventories can be compared with marginal storage costs.We estimate the model for the world copper market by taking into account both spot price and convenience yield equations. In our sample, the estimated models are statistically robust and economically coherent with the theory, even though the patterns of the inventory accumulation process show high sensitivity to the uncertainty about worldwide economic conditions.     

Religious polarization,religious conflicts and individual financial satisfaction: Evidence from India

The extant literature finds religion to be a major determinant of life satisfaction. However, in contexts characterized by religious tensions, the outcome may be very different. In particular, the literature shows that religious polarization has a major influence on some economic outcomes. The analysis presented in the paper tries to identify the impact of religious polarization on a major component of life satisfaction: financial satisfaction. The paper inquires how belonging to a minority religion and living in areas with different levels of religious polarization affect the individual satisfaction with the financial situation of the household. The results show that the members of minority religious groups are less satisfied than the members of the dominant group, and that the financial satisfaction decreases—for a given income—as the religious polarization increases.     

Practical wisdom: A virtue for leaders. Bringing together Aquinas and Authentic Leadership

This article analyzes in detail the virtue of practical wisdom as described by Thomas Aquinas, and on this basis it develops a comprehensive framework to enrich Authentic Leadership theory, establishing the virtue of practical wisdom as foundational for the authentic leader’s behavior and character development, and highlighting shortfalls that may stem from vices opposed to it. The goal of the article is two-fold: First, it seeks to fill a void on the role of virtues–and in particular practical wisdom–in leadership studies; second, it aims to show how cultivating the virtue of practical wisdom as described by Aquinas promotes the development of exactly those traits that are characteristic of an authentic leader, offering a set of propositions delineating these correlations.     

The effect of augmented reality versus traditional advertising: a comparison between neurophysiological and self-reported measures

Despite the growing application of augmented reality in advertising, there is limited understanding about how customers respond to their interaction with the augmented reality advertising and how it differs from a standard paper-based advertising. Augmented reality ads are immersive, interactive, and lifelike, which means they may help companies create an emotional connection with their customers. The authors test if customers would respond in terms of emotional and affective intensity differently to augmented reality versus standard paper-based advertising. The results of two laboratory studies that consider physiological measures of arousal (galvanic skin response), self-reported measure of affect intensity and willingness to pay show that the higher willingness to pay for customers exposed to augmented reality as opposed to standard paper-based ads is driven by the physiological arousal, but not by the self-reported affect intensity and that processing fluency possibly underlies consumer’s enhanced emotional responses toward AR. These results suggest that replacing traditional advertisements with augmented reality advertisements enhances customer physiological responses and willingness to pay, with possible implications on customer segmentation and marketing communication.

     

Modelling factor demands with SEM and VAR: an empirical comparison

The empirical analysis of the economic interactions between factors of production, output and corresponding prices has received much attention over the last two decades. Most contributions in this area have agreed on the neoclassical principle of a representative optimizing firm and typically use theory-based structural equation models (SEM). A popular alternative to SEM is the vector autoregression (VAR) methodology. The most recent attempts to link the SEM approach with VAR analysis in the area of factor demands concentrate on single-equation models, whereas no effort has been devoted to compare these alternative approaches when a firm is assumed to face a multi-factor technology and to decide simultaneously the optimal quantity for each input. This paper bridges this gap. First, we illustrate how the SEM and the VAR approaches can both represent valid alternatives to model systems of dynamic factor demands. Second, we show how to apply both methodologies to estimate dynamic factor demands derived from a cost-minimizing capital-labour-energy-materials (KLEM) technology with adjustment costs (ADC) on the quasi-fixed capital factor. Third, we explain how to use both models to calculate some widely accepted indicators of the production structure of an economic sector, such as price and quantity elasticities, and alternative measures of ADC. In particular, we propose and discuss some theoretical and empirical justifications of the differences between observed elasticities, measures of ADC, and the assumption of exogeneity of output and/or input prices. Finally, we offer some suggestions for the applied researcher.      

Correlating Lévy processes with self-decomposability: applications to energy markets

Decisions in Economics and Finance - Based on the concept of self-decomposability, we extend some recent multidimensional Lévy models built using multivariate subordination. Our aim is to...