Spatial and Temporal Diffusion of Housing Prices in the Presence of a Linguistic Border: Evidence from Belgium

This paper investigates the ripple effect hypothesis for Belgium and is especially interested in the existence of potential border effects arising from the language border that divides the country in two large linguistic regions, Flanders and Wallonia. We find that housing prices in districts located along the north-south axis are highly integrated, while those in more peripheral eastern and western districts converge almost exclusively with neighbouring districts in the same linguistic region. Where a similar model might only applied to a few multilingual countries, we provide some valuable insights on the mechanisms responsible for the observed ripple—and border effects.     

Thin-slicing Tremé as a subjective sashay: heretical pilgrimages to St. Augustine Catholic Church

ABSTRACT

Five heretical field researchers celebrate human subjectivity in a fractured journey toward St. Augustine Catholic Church in the heart of Tremé in September 2015. They populate their diverse pentagonal thoughts with Mary Douglas’ negotiated concepts of purity and pollution, rituals and symbols as a counterweight in their backpacks. Some are inspired by the theatrical mythologies of the guides who take them there, others are stopped in their track by the residual devastation of Hurricane Katrina. Some stop to wonder at Nicolas Cage’s future resting place, others line up at food-trucks to add smells and taste to Tremé’s mediated precreation. Some frame it as a battle ground of past and present injustice, others acknowledge the strife inside the dirty tourist. The thin-sliced meanings acquired on the boulevards to St. Augustine Catholic Church provide a touch of truthfulness, in the idiosyncratic segments, and the spirited spaces in between.     

Properties of Bias-Corrected Realized Variance Under Alternative Sampling Schemes

In this article I study the statistical properties of a bias-correctedrealized variance measure when high-frequency asset prices arecontaminated with market microstructure noise. The analysisis based on a pure jump process for asset prices and explicitlydistinguishes among different sampling schemes, including calendartime, business time, and transaction time sampling. Two mainfindings emerge from the theoretical and empirical analysis.First, based on the mean-squared error (MSE) criterion, a biascorrection to realized variance (RV) allows for the more efficientuse of higher frequency data than the conventional RV estimator.Second, sampling in business time or transaction time is generallysuperior to the common practice of calendar time sampling inthat it leads to a further reduction in MSE. Using IBM transactiondata, I estimate a 2.5-minute optimal sampling frequency forRV in calendar time, which drops to about 12 seconds when afirst-order bias correction is applied. This results in a morethan 65% reduction in MSE. If, in addition, prices are sampledin transaction time, a further reduction of about 20% can beachieved.     

From father to son and from father to daughter: educational mobility in Hungary and the Netherlands for the birth cohorts from 1925 to 1955

In this article we are concerned with the comparison of educational mobility in Hungary and the Netherlands. The analysis is based on representative samples of 1981/2 and applies for both father-son and father-daughter educational mobility specified for four age cohorts. Two different theoretical perspectives are adopted—the industrialisation thesis and the reproduction thesis—from which the expectations for the analysis are derived. These expectations are confronted with the empirical data: firstly by means of overall mobility table measures, secondly by means' of the Hope-type log-linear analysis. The analysis shows that—contrary to the expectations from the reproduction thesis—no significant differences in circulation mobility can be detected between the two countries. Most of the differing mobility patterns are to be found in the structural component of mobility. This component can be uniform [linear] or non-uniform: the direction of the very significant differences supports the industrialisation thesis in this respect. The article ends with a discussion of the visualised effects of educational reforms that were introduced in both countries and with some suggestions for the next research steps.     

The new stability and growth pact: A first assessment

The paper proposes a theoretical model of fiscal policy offering new insights on some of the key policy trade-offs involved in the recent reform of the Stability and Growth Pact. As suggested by the proponents of the reform, greater room for case-specific economic judgment in the implementation of the pact may improve welfare. In our model, these gains occur because the consolidation path implied by the implementation of the pact does not discourage high-quality measures. In practice, however, the difficulty to extract true policy intent from budget figures may hinder the qualitative assessment of fiscal policy. Hence, reforming a rules-based fiscal framework with a view to enhance its “economic rationale” would also require closer monitoring, a better grasp of the policies underlying the budget, and ultimately stricter enforcement. In that sense, recent reforms are at best unhelpful.     

A data driven binning strategy for the construction of insurance tariff classes

We present a fully data driven strategy to incorporate continuous risk factors and geographical information in an insurance tariff. A framework is developed that aligns flexibility with the practical requirements of an insurance company, the policyholder and the regulator. Our strategy is illustrated with an example from property and casualty (P&C) insurance, namely a motor insurance case study. We start by fitting generalized additive models (GAMs) to the number of reported claims and their corresponding severity. These models allow for flexible statistical modeling in the presence of different types of risk factors: categorical, continuous, and spatial risk factors. The goal is to bin the continuous and spatial risk factors such that categorical risk factors result which captures the effect of the covariate on the response in an accurate way, while being easy to use in a generalized linear model (GLM). This is in line with the requirement of an insurance company to construct a practical and interpretable tariff that can be explained easily to stakeholders. We propose to bin the spatial risk factor using Fisher’s natural breaks algorithm and the continuous risk factors using evolutionary trees. GLMs are fitted to the claims data with the resulting categorical risk factors. We find that the resulting GLMs approximate the original GAMs closely, and lead to a very similar premium structure.     

Planning to cheat: EU fiscal policy in real time

Using real-time data from Europe's Stability and Convergence Programs, we explore how fiscal plans and their implementation in the EU are determined. We find that (1) implemented budgetary adjustment falls systematically short of planned adjustment and this shortfall increases with the projection horizon, (2) variability in the eventual fiscal outcomes is dominated by the implementation errors, (3) there is a limited role for 'traditional' political variables, (4) stock-flow adjustments are more important when plans are more ambitious, and (5), most importantly, both the ambition in fiscal plans and their implementation benefit from stronger national fiscal institutions. We emphasize also the importance of credible plans for the eventual fiscal outcomes .
--- Roel Beetsma, Massimo Giuliodori and Peter Wierts