Karl Pearson and the Origin of Kurtosis

Although the kurtosis index proposed by Karl Pearson in 1905 is introduced in statistical textbooks at all levels, the measure is not easily interpreted and has been a subject of considerable debate. In this study, the theoretical development of kurtosis is surveyed from a historical perspective of Pearson's work on evolution. It surprisingly emerges that there was no emphasis in Pearson's papers on kurtosis as measuring (in part) tail heaviness. However, it is found that Pearson used to frequently adjust the formalisation of kurtosis depending on his changing needs. This complex development partly explains the confusion that would surround kurtosis in subsequent literature. Our conclusion is that most misunderstandings arise from improper use of the kurtosis coefficient outside the Pearson system of frequency curves.     

Discounting and welfare evaluation of policies

We start with the premise that if policy discounting is to have any welfare relevance, one has to accept it being a derivative of a social welfare function (SWF). We show that if that derivative is to have a net present value (NPV) form, then the baseline allocation must be stationary. In addition, we show that at a stationary baseline in an overlapping generations growth economy, the intergenerationally fair discount rate equals the growth rate of per‐capita consumption, which is, roughly, 2% for the United States. This differs from the interest rate, even in the golden rule equilibrium, unless population growth is null. The last result is based on the main theorem in Mertens and Rubinchik (2012) and is demonstrated for a policy space that might naturally arise in applications.     

Who buys newspapers in Spain? An analysis of the determinants of the probability to buy newspapers and of the amount spent

In this paper, we examine the determinants of household consumption of newspapers and the amount spent on their purchase by considering several explanatory variables related to household characteristics and the main household wage earner. Results show that the variables have quite similar effects on both the relative probability of buying newspapers and the amount spent. The key variables are the age and occupational status of the main wage earner, the number of household members, income and having to pay for the house, as well as a number of geographical variables. However, certain differences are also observed. The most important is the education of the main wage earner: while its effect on buying newspapers is very small (only those who did not complete primary education are less likely to buy), its effect on the amount spent increases with the level of education. As other studies of cultural goods and services consumption have suggested, education and occupational status are more relevant determinants than income.     

Love,hate and murder: Commitment devices in violent relationships

Many violent relationships are characterized by a high degree of cyclicality: women who are the victims of domestic violence often leave and return multiple times. To explain this we develop a model of time inconsistent preferences in the context of domestic violence. This time inconsistency generates a demand for commitment. We present supporting evidence that women in violent relationships display time inconsistent preferences by examining their demand for commitment devices. We find that no-drop policies – which compel the prosecutor to continue with prosecution even if the victim expresses a desire to drop the charges – result in an increase in reporting. No-drop policies also result in a decrease in the number of men murdered by intimates suggesting that some women in violent relationships move away from an extreme type of commitment device when a less costly one is offered.     

Lab and framed lab versus natural experiments: Evidence from a risky choice experiment

Some recent papers have studied data from TV game shows to examine the behaviour of individuals towards risk. It is generally agreed that data from these shows are useful in detecting individual risk aversion in the field, with both “real life” subjects and incentives. Field experiments also include some interesting reality features that could affect individuals’ behaviour and possibly lead to different findings. This paper aims at investigating lab versus field evidence in risk taking attitudes, especially controlling for framing effects. To assess whether the behaviour of subjects in the field is consistent with that of experimental subjects, we designed an experiment to mimic (with experimental rewards and subjects) the rules of a well-known Italian TV game show, Affari Tuoi, in two different settings: a traditional lab setting, where the game was played individually (109 subjects) (Treatment 1); and a framed lab, in which the experiment was replicated in the Italian public television (RAI) studio where the show was actually recorded, with a smaller sample of undergraduate students (33) and in the presence of an audience (Treatment 2). Our comparison between the two different settings aims at establishing whether the presence of an audience, or of a situation that reproduces the stress that contestants must experience in the TV studio, can affect experimental subjects’ choices. We did not find any significant evidence of framing effects: students behave in a similar way in the two lab settings, responding essentially to incentives. Comparing the risk attitudes shown by experimental subjects in the two lab treatments with those exhibited by the contestants in the field, we found that contestants in the TV show are generally more risk averse than students in the lab.     

Hotel revenue management and the Internet: The effect of price presentation strategies on customers’ willingness to book

A decision that is intrinsic to the application of hotel best available rate (BAR) pricing is how to present the BARs for individual nights within a multiple-night stay to prospective hotel guests. We discuss two alternative price presentation strategies, a blended and a nonblended rate approach, and examine their effect on customers’ willingness to pay in the context of Internet-based reservation requests. Study findings indicate that a nonblended rate presentation approach generates higher willingness to book ratings than a blended rate presentation approach. Furthermore, when it comes to nonblended rates, familiarity with BAR pricing moderates the effect of rate sequence on customers’ willingness to book.     

Can Banks Self‐Regulate? Voluntary Agreements,Intrinsic Motivation and Games

This article argues that lessons on how to achieve a sustainable financial system can be learnt from the work done on sustainable commons (on common‐pool resources – CPRs – where there is no ‘tragedy of the commons’). Existing approaches to financial regulation may not give proper attention to available solutions. The article proposes that innovative solutions could be tested using experimental methods commonly used in CPRs: repeat run, feedback driven games.     

Farmers,Middlemen and Exporters: A Model of Market Power,Pricing and Welfare in a Vertical Supply Chain

Markets for cash‐crops in developing countries are typically characterized by a concentration of buyer power at different levels of the supply chain. For instance, small‐scale coffee farmers sell their produce to a middleman, who in turn sells the coffee onward to an exporter, often a foreign multinational, with monopsony power in the hands of the purchasers at both levels. We analyze pricing behavior and welfare with different assumptions regarding market power. In particular, we show that a more powerful exporter is likely to benefit the producers and may even lead to higher welfare for the producer country as a whole.     

Assessing Voluntary Programs to Improve Environmental Quality

The last decade has seen a dramatic increase in the use of voluntaryapproaches (VAs) to environmental protection, which has spurned agrowing literature on the relative merits of voluntary vs. mandatoryapproaches. This paper draws on that literature to discuss both thetheoretical and empirical issues that arise in the evaluation orassessment of a particular VA. We consider both the environmentaleffectiveness and the efficiency of this policy approach. Our aim is toaid policymakers in evaluating a specific program or in thinking aboutthe use and design of a VA. We identify some key features that arelikely to increase both the effectiveness and the efficiency of VAs.