Information reduction via level crossings in a credit risk model

This paper provides an alternative credit risk model based on information reduction where the market only observes the firm’s asset value when it crosses certain levels, interpreted as changes significant enough for the firm’s management to make a public announcement. For a class of diffusion processes we are able to provide explicit expressions for the firm’s default intensity process and its zero-coupon bond prices.      

Life cycle assessment in the food supply chain: a case study

This research aims at assessing the environmental impact of the poultry supply chain from cradle to grave using case study research and also life cycle assessment (LCA). While a limited number of generic poultry production LCA studies have been published, fewer yet assess the whole process of a specific organisation, none comparing the increased impact of further processing. Our results show that irrespectively of the impact assessment method utilised, the process of producing portions is considerably higher in total environmental impact due to the extra raw material required to produce the same mass into retail. Our research contributes to the growing number of LCA studies and could be used by practitioners for comparison against national and international averages. From a theoretical point of view, this research provides new insights into the relationship between vertically integrated supply chains and environmental performance which has not been examined in the past.     

Estimating Transition Probabilities from a Time Series of Independent Cross Sections

This paper considers the implementation of a nonstationary, heterogeneous Markov model for the analysis of a binary dependent variable in a time series of independent cross sections. The model, previously considered by M offitt (1993), offers the opportunity to estimate entry and exit transition probabilities and to examine the effects of time-constant and time-varying covariates on the hazards. We show how ML estimates of the parameters can be obtained by Fisher's method-of-scoring and how to estimate both fixed and time-varying covariate effects. The model is exemplified with an analysis of the labor force participation decision of Dutch women using data from the Socio-economic Panel (SEP) study conducted in the Netherlands between 1986 and 1995. We treat the panel data as independent cross sections and compare the employment status sequences predicted by the model with the observed sequences in the panel. Some open problems concerning the application of the model are also discussed.     

Research returns redux: a meta-analysis of the returns to agricultural R&D

A total of 289 studies of returns to agricultural R&D were compiled and these provide 1821 estimates of rates of return. After removing statistical outliers and incomplete observations, across the remaining 1128 observations the estimated annual rates of return averaged 65 per cent overall — 80 per cent for research only, 80 per cent for extension only, and 47 per cent for research and extension combined. These averages reveal little meaningful information from a large body of literature, which provides rate-of-return estimates that are often not directly comparable. This study was aimed at trying to account for the differences. Several features of the methods used by research evaluators matter, in particular assumptions about lag lengths and the nature of the research-induced supply shift.     

Partial Pooling at the Reserve Price in Auctions with Resale Opportunities

Two features common to many auctions are the use of reserve prices and the existence of secondary markets for the goods being sold. Even in simple symmetric settings, the combination of these features can preclude existence of an equilibrium in symmetric separating bidding strategies. With a reserve price sufficiently far below the maximum (endogenous) valuation, a symmetric equilibrium still exists, but with some types pooling at the reserve. The optimal reserve price depends not only on the joint distribution of bidders' information before and after the auction, but also on how surplus is divided in the secondary market. Journal of Economic Literature Classification Numbers: D44, C7, L1, D82     

Telematics: Decision Time for Detroit

With implications for navigation, safety, entertainment and vehicle maintenance as well as regulation and infrastructure investment in roads, telematics has the potential to transform driving more than any other innovation for decades. In the already well-established Asian telematics industry, revenue tends to come from extra charges at the time of vehicle-sale, with most subsequent services provided free. The US model has evolved differently, with much of the cost of telematics hardware and software subsidized in the initial vehicle sale price and revenue coming from services used. The decision to invest in telematics is therefore riskier in the US. This article first briefly summarizes the potential of telematics. It then analyzes the investment risks, particularly for automakers. It concludes with recommendations on how the US auto industry can minimize risk and make the most of the opportunities.     

Employment and child-care choices in Canada and the United States

In this paper we examine employment and child-care choices of two-parent families with young children in the United States and Canada, using a pooled data set based on recent national surveys in each country. We find that the employment and child-care choices of Canadian families are similar to those of U.S. families. Estimates of a model of employment and child-care choices indicate significant effects of child-care subsidies, child-care prices, and wage rates on employment and child-care choices. However, none of these factors helps to explain the differences in employment and child-care choices between the two countries.
Ce mémoire examine le choix de l'emploi et du soin des enfants dans les familles où il y deux parents aux Etats-Unis et au Canada en utilisant des données d'études récentes dans les deux pays. Il appert que les choix des familles canadiennes sont semblables à ceux des familles américaines. Les calibrations d'un modèle de ces choix montrent les effets significatifs des subventions au soin des enfants, du prix des soins des enfants, et des taux de salaires sur ces choix. Cependant, aucun de ces facteurs n'explique les diffrences dans les patterns de choix entre les deux pays.