ON‐THE‐JOB SEARCH,PRODUCTIVITY SHOCKS,AND THE INDIVIDUAL EARNINGS PROCESS*

Individual labor earnings observed in worker panel data have complex, highly persistent dynamics. We investigate the capacity of a structural job search model with on‐the‐job search, wage renegotiation by mutual consent, and i.i.d. productivity shocks to replicate salient properties of these dynamics, such as the covariance structure of earnings, the evolution of individual earnings mean, and variance with the duration of uninterrupted employment, or the distribution of year‐to‐year earnings changes. Structural estimation of our model on a 12‐year panel of highly educated British workers shows that our simple framework produces a dynamic earnings structure that is remarkably consistent with the data.     

ICP 2005 Construction Prices: Are They Underestimated in Developing Countries?

Construction prices are lower in developing countries in ICP 2005, which has raised these countries' capital/output ratio in Penn World Tables 7 and 8 and affected growth analyses. We estimate the Colombia/U.S. price ratio for office and apartment buildings in 2005 as a test of the validity of the ICP 2005 methodology for estimating these prices. Our estimate of the Colombia/U.S. price ratio is almost twice the ICP 2005 estimate. We confirm the validity of our results by estimating the cost of constructing office and apartment buildings using 2005 prices for construction materials, equipment, and labor in both countries.     

Using technology to improve the management of development impacts on biodiversity

The mitigation hierarchy (MH) is a prominent tool to help businesses achieve no net loss or net gain outcomes for biodiversity. Technological innovations offer benefits for business biodiversity management, yet the range and continued evolution of technologies creates a complex landscape that can be difficult to navigate. Using literature review, online surveys, and semi-structured interviews, we assess technologies that can improve application of the MH. We identify six categories (mobile survey, fixed survey, remote sensing, blockchain, data analysis, and enabling technologies) with high feasibility and/or relevance to (i) aid direct implementation of mitigation measures and (ii) enhance biodiversity surveys and monitoring, which feed into the design of interventions including avoidance and minimization measures. At the interface between development and biodiversity impacts, opportunities lie in businesses investing in technologies, capitalizing on synergies between technology groups, collaborating with conservation organizations to enhance institutional capacity, and developing practical solutions suited for widespread use.     

The geometry of finite equilibrium datasets

We investigate the geometry of finite datasets defined by equilibrium prices, income distributions, and total resources. We show that the equilibrium condition imposes no restrictions if total resources are collinear, a property that is robust to small perturbations. We also show that the set of equilibrium datasets is pathconnected when the equilibrium condition does impose restrictions on datasets, as for example when total resources are widely noncollinear.     

Production in incomplete markets: Expectations matter for political stability

In the present paper we study voting-based corporate control in a general equilibrium model with incomplete financial markets. Since voting takes place in a multi-dimensional setting, super-majority rules are needed to ensure existence of equilibrium. In a linear–quadratic setup we show that the endogenization of voting weights (given by portfolio holdings) can give rise to – through self-fulfilling expectations – dramatical political instability, i.e. Condorcet cycles of length two even for very high majority rules.     

Explaining International Differences in Genetically Modified Food Labeling Policies*

Many countries have adopted labeling policies for genetically modified (GM) food, and the regulations vary considerably across countries. We evaluate the importance of political‐economic factors implicit in the choice of GM food labeling regulations. Using an analytical model, we show that production and trade‐related interests play a prominent role in labeling decision‐making. This conclusion is validated by an empirical analysis of GM food labeling policy choices. We find that countries producing GM crops are more likely to have less stringent labeling policies. Food and feed exporters to the European Union (EU) and Japan are more likely to have adopted stricter labeling policies. Labeling regulations in Asia and Europe are similar to those of Japan and the EU. Countries with no labeling policies are less developed, with important rural sectors and are more likely to have ratified the Cartagena Protocol on Biosafety.     

Internal validity assessment of conjoint estimated attribute importance weights

This paper investigates how various conjoint designs (full versus fractional) and estimation procedures (LINMAP, MONANOVA, OLS) may interact with basic characteristics of the “true” utility functions (i.e., their range, shape, and curvature) when estimating attribute importance weights. Substantial weight distortions are found, especially under a fractional design.     

How do epidemics induce behavioral changes?

This paper develops a theory of optimal fertility behavior under mortality shocks. In an OLG model, young adults determine their optimal fertility, labor supply and life-cycle consumption with both exogenous child and adult mortality risks. We show that a rise in adult mortality exerts an ambiguous effect on both net and total fertility in a general equilibrium framework, while child mortality shocks unambiguously lead to a rise in total fertility, leaving net fertility unchanged. We complement our theory with an empirical analysis using a sample of 39 Sub-Saharan African (SSA) countries over the 1980–2004 period, examining the overall effects of the child and adult mortality channels on both total and net fertility. We find child mortality to exert a robust, positive impact on total fertility but no impact on net fertility, whereas a rise in adult mortality is found to negatively influence both total and net fertility. Given the particular demographic profile of the HIV/AIDS epidemic (killing essentially young, active adults), we then conclude in favor of an unambiguous negative effect of the HIV/AIDS epidemic on net fertility in SSA.     

Gaussian process regression for pricing variable annuities with stochastic volatility and interest rate

Decisions in Economics and Finance - In this paper, we investigate value and Greeks computation of a guaranteed minimum withdrawal benefit (GMWB) variable annuity, when both stochastic volatility...