Cost allocation and regulatory pricing in telecommunications : A UK case study

This article describes the application of alternative cost allocation methodologies to the Hull telephone system, which provides service to a small area of the UK independently of British Telecom. The article first discusses alternative uses of and methods for allocating costs among access, local usage and trunk usage. It then implements the fully distributed cost approach, using accountancy data provided by the company. In addition, several illustrative calculations are shown which cost individual services on a stand-alone basis using different technologies. The results broadly suggest that, on a full distributed cost basis, access costs exceed existing average tariff levels. The article concludes with some illustrative calculations showing the rebalancing of access and usage charges which would generate the same revenue but bring them more in line with costs.     

Performance of residential mortgages in low and moderate-income neighborhoods

This paper presents the first data on performance of mortgages on residences located in lowand moderate-income neighborhoods of U.S. cities. It provides new data on delinquencies and foreclosure provided by a sample of lenders who are members of the National Association of Affordable Housing Lenders and who have lending programs established pursuant to the Community Reinvestment Act.Sample mortgages on multifamily dwellings perform comparably with national sample data, whereas sample mortgages on single-family mortgages perform much better than comparable national sample data.The findings of this paper demonstrate clearly that lending programs in lowand moderate-income neighborhoods can be viable. The findings do not, however, help to settle the issue as the racial or gender discrimination in mortgage origination.This paper is based on Performance Analysis of Community Reinvestment Programs, prepared by the athors for the Woodstock Institute, Chicago, IL.     

MODELLING THE TREND: THE HISTORICAL ORIGINS OF SOME MODERN METHODS AND IDEAS

The development of the methods of correlation and regression analysis at the turn of the 20th century led to their use in attempting to identify relationships between economic variables. However, caution was soon expressed that correlating series with ‘secular’ trends was likely to be misleading. After some discussion of methods, linear detrending by least‐squares estimation became the default method. By the 1920s, however, some voices of dissent expressed the view that linear detrending was likely to be inappropriate in some, even many, cases. This led to a number of innovative methodological developments, including rolling window estimation, moving integration, non‐linear trends, structural breaks, sigmoid‐type smooth adjustment functions, the beginnings of stochastic trend modelling and the construction of ‘smoothers’ and filters. Although generally failing to have an impact at the time, all substantially predate their current use in econometrics. This paper establishes precedence for these ideas and recreates some of the empirical examples and early simulations.     

Welfare Reform and the Well-Being of Single Female-Headed Families: A Semi-Parametric Analysis

Single female-headed families with children (SFHFwC) have historically been the primary recipients of federal public cash assistance payments in the United States. Recent welfare reform initiatives established work requirements and cumulative time limits on public cash assistance payments. Three findings in this paper have significant implications for the long-term efficacy of welfare reform initiatives. First, SFHFwC made significant and broad-based gains in their economic well-being from 1993 to 1999. Second, increased propensities of single mothers to leave welfare and enter the workforce from 1993 to 1999, behavior consistent with incentives created by welfare reform measures, do not account for a major portion of these observed gains. Third, improved area economic conditions and increased educational levels of single mothers account for a major share of gains in well-being.     

Forecasting compositional time series

Compositional data sets occur in many disciplines and give rise to some interesting statistical considerations. In recent years, the modelling and forecasting of compositional time series has seen some important developments, although this approach does not seem to be widely known. This paper represents a modest step towards rectifying this. After briefly setting out the basic structure of compositional data sets and outlining the implications for forecasting compositional time series, it illustrates the techniques using three examples: modelling and forecasting expenditure shares in the U.K. economy; forecasting trends in obesity in England; and examining shifts in the proportions of English first class cricketers born during particular quarters of the year.