Returns to education and wage equations

The paper shows why considering a number of education-dependent covariates in a wage equation decreases the coefficient of education in that equation. This result is illustrated empirically with a meta-analysis for Portugal. The education coefficient decreases when covariates are used that can be considered post-education decisions; on the other hand, it is independent of sample size, tenure and whether hourly or monthly wages are used. These results support the use of a simple specification of the Mincer equation for the study of the total returns to education.     

AN ATTEMPT TO EXPLAIN DIFFERENCES IN ECONOMIC GROWTH: A STOCHASTIC FRONTIER APPROACH

Total factor productivity (TFP), factor accumulation, and growth are analysed for a panel of 40 countries in 2001–11. TFP growth and technical inefficiency are estimated using a stochastic frontier model. Environmental variables are found to have an important role in explaining differences in inefficiency across countries. Over 2001–11, the general improvement in technical efficiency of countries is almost outweighed by technological regress. Results indicate that differences in factor accumulation between OECD and emerging economies are more important than differences in TFP change to explain differences in economic growth. Results also indicate negative and significant random shocks for the OECD countries.     

Policies on Managing Risk in Agricultural Markets

Over the past dozen years, policymakers have largely abandonedlong-standing popular approaches for addressing risk in agriculturewithout fully resolving the question of how best to manage thenegative consequences of volatile agricultural markets. Thearticle reviews the transition from past policies and describescurrent approaches that distinguish between the trade-relatedfiscal consequences of commodity market volatility and the consequencesof price and production risks for vulnerable rural householdsand communities. Current policies rely more heavily on markets,even though markets for risk are incomplete in numerous ways.The benefits and limitations of market-based instruments areexamined in the context of risk management strategies, and innovativeapproaches to extend the reach of risk markets are discussed.      

Investors’ perspective on portfolio insurance

Portuguese Economic Journal - This study supports the use of behavioural finance to explain the popularity of portfolio insurance. Portfolio insurance strategies are important financial solutions...     

Can Leaders of Public Companies Make Them Innovative?

Public companies have limitations to innovate because they are usually concentrated on short‐term results and are subjected to scrutiny and accountability in their innovation projects. Therefore, leaders of public companies face a greater challenge if they want their companies to be innovative. Leaders must make use of all their creativity and leadership skills to accomplish short‐term goals and at the same time foster the innovation that companies need to remain successful.     

Dynamic Efficiency Measurement: Theory and Application

Nonparametric dynamic measures of production efficiency are developed in the context of an adjustment-cost technology and intertemporal cost minimization. Bounds on each efficiency measure are derived for each firm using a nonparametric revealed preference approach. Long-run efficiency measures indicate the relative efficiency of both variable and dynamic factors while short-run measures of efficiency indicate whether variable inputs are employed efficiently in the production process. The efficiency measures are temporal in nature by describing the degree of efficiency of the firm at a particular point along its adjustment path. The empirical implementation is illustrated for a balanced panel of Pennsylvania dairy operators during 1986–1992.     

Hedonic prices indexes for new passenger cars in Portugal (1997–2001)

This paper evaluates the effects of quality change on the price index for new passenger cars in Portugal for the years 1997–2001. Hedonic regression models are studied, giving particular emphasis to the relation between the form of the price index and the econometric techniques used for inference. The results of the empirical part of the paper indicate that during this period the changes in the quality of new cars sold in Portugal are responsible for price increases averaging 4.8% per year. Because this quality change was not entirely taken into account, in recent years the CPI component corresponding to the sales of new passenger cars may have been overestimated by as much as 2.2 percentage points per year. This corresponds to an overestimation of the overall CPI by about 0.15 percentage points per year.