THE MEASUREMENT OF POVERTY WITH GEOGRAPHICAL AND INTERTEMPORAL PRICE DISPERSION: EVIDENCE FROM RWANDA

It is not known to what extent welfare measures result from seasonal and geographical price differences rather than from differences in living standards across households. Using data from Rwanda in 1983, we show that the change in mean living standard indicators caused by local and seasonal price deflation is moderately significant at every quarter. By contrast, the differences in poverty measures caused by this deflation can be considerable, for chronic as well as transient or seasonal poverty indicators. Thus, poverty monitoring and anti-poverty targeting can be badly affected by inaccurate deflation of living standard data. Moreover, when measuring seasonal poverty, the deflation based on regional prices instead of local prices only partially corrects for spatial price dispersion. Using annual local prices instead of quarterly local prices only yields a partial deflation, which distorts the measure of poverty fluctuations across seasons and biases estimates of annual and chronic poverty.     

On the Construction of the European Economic Sentiment Indicator*

Economic sentiment surveys are carried out by all European Union member states and are often seen as early indicators for future economic developments. Based on these surveys, the European Commission constructs an aggregate European Economic Sentiment Indicator (ESI). This paper compares the ESI with more sophisticated aggregation schemes based on statistical methods: dynamic factor analysis and partial least squares. The indicator based on partial least squares clearly outperforms the other two indicators in terms of comovement with economic activity. In terms of forecast ability, the ESI, constructed in a rather ad hoc way, can compete with the other indicators.     

Demand for football and intramatch winning probability: an essay on the glorious uncertainty of sports

The aims of this study are (i) to identify the main determinants of the demand for French Premiere Division football matches using all matches played during the 1997/1998 season, (ii) to estimate a team-specific probability of success, and (iii) to propose an updating process for the intramatch winning probability. The methodology is tested empirically over an out-of-sample data set using matches of the 1998/1999 season. The results show that football appears to be an inferior product affected by both socio-economic and football variables, and that the main football variables have only a tenuous explanatory power concerning the final outcome of a given match.     

Firm Entry under Financial Frictions

How does a general‐equilibrium model behave when incorporating competitive firm entry that requires external finance? After conducting a steady‐state analysis, we reach three main results. First, the financial constraint has contractionary effects on both equity investment and the labor supply as they are inversely related to the marginal finance cost. Second, the dynamics of firm creation and destruction amplify the impact of changes in either productivity or banking efficiency due to procyclical firm entry. Third, a higher elasticity of substitution (that implies a lower mark‐up) cuts the number of firms and makes aggregate output fall.     

Competition and Public Service Obligations: Regulatory Rules and Industries Games

The introduction of competition in regulated industries may have positive or negative side-effects on the provision of collective goods or services. The paper shows that these effects are closely related to two associated elements: the industrial strategies developed by utilities and the regulatory environment within which they operate. Regulatory rules and corporate strategies influence the treatment of public service obligations. This raises a major issue regarding the regulation of public utilities. To reduce the drawbacks of the introduction of competition, it is necessary to set regulatory rules that allow the implementation of market configurations enabling public utilities to follow a public service orientation rather than a pure market-based approach.     

ON NON‐MONETARY MEASURES IN THE FACE OF RISKS AND THE SIGNS OF THE DERIVATIVES

Vulnerability of both prudence and temperance towards a sure loss and towards a zero‐mean background risk seems to be a very realistic assumption on individual preference. This paper shows that when the concepts of prudence and temperance are defined in non‐monetary terms, the above assumption is equivalent to the usual signs of the successive derivatives of the utility function.