Green Polities: Urban Environmental Performance and Government Popularity

Ascertaining whether local election results are driven by incumbents' performance while in office or mechanically reflect constituencies' ideological affiliation and macroeconomic conditions is crucial for evaluating the alleged accountability‐enhancing property of decentralization. On the basis of a unique score of urban environmental performance and the results of all elections held in the major Italian cities over a decade, we investigate the role of local (fiscal and environmental) vs. national issues in municipal elections. Although the empirical evidence points to a strong ideological attachment and a somewhat weaker “fiscal conservatism,” it reveals that media reported environmental rankings have an impact on the popularity of city governments.     

COOPERATION: THE POWER OF A SINGLE WORD? SOME EXPERIMENTAL EVIDENCE ON WORDING AND GENDER EFFECTS IN A GAME OF CHICKEN

Framing has been widely shown to affect decision making. In this paper, we investigate experimentally whether, and to what extent, cooperative behaviour in a Game of Chicken may be impacted by a very basic change in the labelling of the strategies. Our within‐subject experimental design involves two treatments. The only difference between them is that we introduce either a socially‐oriented wording (I cooperate/I do not cooperate) or colours (red/blue) to designate strategies. The level of cooperation appears to be higher in the socially‐oriented context, but only when uncertainty as regards the type of the partner is manipulated, and especially among females.     

Hyperinflation in a small open economy with a fixed exchange rate: A post Keynesian view

This paper examines the emergence of hyperinflation in a small open economy with a fixed exchange rate from a post Keynesian perspective. Three variables play key roles: distributive conflict, external debt, and expectations about the exchange rate. First, we propose a short-run Kaleckian macro model. Then, we study the long-run behavior of the model by endogenizing the price level and foreign indebtedness. We conclude that the existence of expectations about the nominal exchange rate is crucial to explaining the emergence of hyperinflation.     

Forecasting GDP over the Business Cycle in a Multi‐Frequency and Data‐Rich Environment

This paper merges two specifications recently developed in the forecasting literature: the MS‐MIDAS model (Guérin and Marcellino, 2013) and the factor‐MIDAS model (Marcellino and Schumacher, 2010). The MS‐factor MIDAS model that we introduce incorporates the information provided by a large data set consisting of mixed frequency variables and captures regime‐switching behaviours. Monte Carlo simulations show that this specification tracks the dynamics of the process and predicts the regime switches successfully, both in‐sample and out‐of‐sample. We apply this model to US data from 1959 to 2010 and properly detect recessions by exploiting the link between GDP growth and higher frequency financial variables.     

Externalities of National Pharmaceutical Policy when Markets are Integrated through Parallel Trade

This paper studies externalities of nationally determined cost‐sharing systems, in particular coinsurance rates, under pharmaceutical parallel trade in a two‐country model with a vertical distributor relationship. Parallel trade generates a price‐decreasing competition effect in the destination country of the parallel import and a price‐increasing double marginalization effect in the source country. An increase of the coinsurance rate in the destination country mitigates the double marginalization effect in the source country. An increase of the coinsurance rate in the source country reinforces the competition effect in the destination country. This may be a case for policy coordination in the European Union.     

Determinants of total efficiency in water utilities in Mexico

By using panel data analysis across 368 water utilities in Mexico over the period 2010–2014, we find that small firms are more efficient than medium and large providers and that increasing production is associated with less efficiency. Billing, income collection and profitability are relevant factors to improve efficiency. Medium and large firms require to measure consumption by service with meters in order to increase efficiency, while small firms do not require it.     

A regularity theory of causality for the social sciences

Quality & Quantity - This article discusses a regularity theory of causality (RTC) for the social sciences. With RTC, causality is a relationship between X and Y characterized by three...     

Nonlinear dynamics in economic modelling

Decisions in Economics and Finance -     

Measuring pesticide overuse and its determinants: Evidence from Vietnamese rice and fruit farms

Pesticides have long been important for the development of agricultural production. However, improper use of pesticides may result in inefficiency with respect to farm profitability, in addition to external effects of pesticide use on environmental and human health. This paper employs a production function that explicitly accounts for the role of damage abatement inputs (i.e. pesticides) in the production process, to examine the optimal use of pesticides. It then investigates determinants of pesticide overuse versus underuse and the intensity of overuse. The empirical application uses data on Vietnamese rice and fruit farms drawn from the 2016 Vietnamese Household Living Standards Survey. Results show about 95% of farmers overused pesticides for both rice and fruit farming systems. The Mekong Delta, also known as the ‘Rice Bowl’ of Vietnam, has higher levels of overuse on rice farms than two other regions. Overuse intensity is lower for female and poorer rice farmers while intensity is higher for those with more income and more family members. For fruit farms, younger farmers or those with more family members were more likely to overuse versus underuse pesticides.