Creating Competitive Advantage for Calabrian-Made Products: The Influences of Culture and Price Perception

The purpose of this article is to investigate the influence of culture on consumers’ price perception of local products as well as the creation of competitive advantage for local firms. In particular, we analyze the locally produced goods of the Calabrian region in southern Italy. The research methodology is based on qualitative approach and quantitative approach. The results of the study offer important insights into consumers and firms. Since the firm has a better understanding about the role of culture and its effect on consumer perception, it will be able to adjust or improve its pricing policy and thus achieve consumer satisfaction and retention and gain competitive advantage to increasing sales. In this study we introduce specific cultural factors, such as the image and tradition of Magna Græcia culture. Although substantial research on the influence of cultural factors on consumer’s perception exists in the field of consumer research, this study further contributes to the literature by acting as a catalyst for future scientific enquiries in this important area.     

Optimal monetary policy for a small open economy

This paper focuses on the design of monetary policy rules for a small open economy. The model features optimizing behavior, general equilibrium and price stickiness. The real exchange rate is shown to affect the firm's real marginal cost, aggregate supply and aggregate demand. The welfare objective depends on the openness of the economy, and the optimal policy rule differs from that which obtains in a closed economy. The inflation versus output gap stabilization trade-off is caused by the real exchange rate. The implied optimal monetary policy regime is domestic inflation target coupled with controlled floating of the real exchange rate.     

Seasoned Equity Offerings: Stock Market Liquidity and the Rights Offer Paradox

This paper examines the impact of market liquidity on seasoned equity offerings (SEO) characteristics in France. We find that, besides blockholders’ takeup, liquidity is an important determinant of SEO flotation method choice. We document higher direct equity offering flotation costs, but also improved stock market liquidity after public offerings and standby rights relative to uninsured rights. After controlling for endogeneity in the choice of SEO flotation method, we find that pure public offerings and standby rights are comparable in terms of direct costs and liquidity improvement. Our results provide new insights as to why firms choose public offerings despite apparently higher costs.     

Measurement of the Quality of Life for Economic Evaluation and the Assessment of Quality of Life (AQoL) Mark 2 Instrument

Including the quality of life in the economic assessment of health and medical services is well established in the literature and a number of multi‐attribute utility (MAU) instruments are available which purport to measure health state utilities. One of these, the Assessment of Quality of Life (AQoL) instrument was developed in Australia and uses Australian importance weights. The present article discusses some of the methodological problems encountered by existing instruments. It outlines the construction of the AQoL Mark 2 and the methodological innovations which have attempted to overcome some of these problems. Technical and other details may be obtained in Richardson et al. (2003a, 2003b, 2003c) and Peacock et al. (2003). These papers may be accessed from the Health Economics Unit web site at 〈 http://heu.buseco.monash.edu.au 〉.     

Why are distributions of firm growth rates tent-shaped?

Recent empirical analyses on different datasets have revealed a common exponential behavior in the shape of the probability density of the corporate growth rates. We present new evidence on this topic from the Italian Manufacturing Industry and propose a very simple mechanism that, under rather general assumptions, provides a robust explanation for the observed regularities.     

State-dependent preferences can explain the equity premium puzzle

We introduce state-dependent recursive preferences into the Mehra–Prescott economy. We show that such preferences can match the historical first two moments of the returns on equity and the risk-free rate. Other authors have reported similar results using state-dependent expected utility preferences. These authors have tended to emphasize the importance of countercyclical risk aversion in explaining the equity premium puzzle. We find that countercyclical risk aversion plays an important role but only when combined with modest cyclical variation in intertemporal substitution.     

Estimation of a rational expectations model of the term structure

This paper shows how to represent a vector autoregression (VAR) in terms of the eigenvalues and eigenvectors of its companion matrix. This representation is used to impose the exact restrictions implied by the expectations hypothesis on the VAR for short and long term interest rates and to calculate the restricted maximum likelihood estimates. The first difference representation for short and long rates used by Sargent (1979) is shown to be inconsistent with the expectations hypothesis, but a VAR with two unit roots is constructed that satisfies the exact restrictions and leads to similar restricted estimates.     

Multivariate Small Area Estimation of Multidimensional Latent Economic Well-being Indicators

Factor analysis models are used in data dimensionality reduction problems where the variability among observed variables can be described through a smaller number of unobserved latent variables. This approach is often used to estimate the multidimensionality of well-being. We employ factor analysis models and use multivariate empirical best linear unbiased predictor (EBLUP) under a unit-level small area estimation approach to predict a vector of means of factor scores representing well-being for small areas. We compare this approach with the standard approach whereby we use small area estimation (univariate and multivariate) to estimate a dashboard of EBLUPs of the means of the original variables and then averaged. Our simulation study shows that the use of factor scores provides estimates with lower variability than weighted and simple averages of standardised multivariate EBLUPs and univariate EBLUPs. Moreover, we find that when the correlation in the observed data is taken into account before small area estimates are computed, multivariate modelling does not provide large improvements in the precision of the estimates over the univariate modelling. We close with an application using the European Union Statistics on Income and Living Conditions data.     

The Contribution of the Italian Liberal Thought to the European Union: Einaudi and His Heritage from Leoni to Alesina

The Italian classical liberal tradition of Federalism and European integration is well founded. Starting with Luigi Einaudi, who took up the heritage of Carlo Cattaneo, it has continued with Giovanni Malagodi, Giovanni Demaria, and Bruno Leoni, not to mention the liberals of Einaudi’s times. The same reflection continues today. Alberto Alesina is a prominent personality among the scholars who can be considered as full heirs of Einaudi. A foresight, often impressive, is the thread linking Einaudi’s writings on European federation. Between the twenties and the early fifties of the 20th century, Einaudi traced with great precision the profile and many details of a politically and economically unified Europe. Today, we do not have the federation that he wished for, but the economic sovereignty among EU countries has been shared to a great extent. Other prominent Italian liberal thinkers and politicians have reflected on the idea of a federal Europe and on the incipient European construction: thinkers such as Bruno Leoni, Giovanni Malagodi and Giovanni Demaria. Giovanni Malagodi, for many years a member of the Italian Parliament and secretary general of the Italian Liberal party, in his speech for the ratification of the Treaty of Rome, advocated a European monetary union with a single currency substituting those of the Member States of the EEC. Both Giovanni Demaria and Bruno Leoni warned against the danger of Government interventionist policies in the European common market. Alesina, in various scholarly contributions on European integration and in the essay The Future of Europe, adopts a liberal perspective for his critical analysis of EU policies.     

Comovement among returns of the private Chilean pension system

Abstract

The measurement of comovement among economic variables is key in several areas of economics and finance. This article examines the comovement among Pension Fund Administrators (AFPs) in the Chilean private pension system from 2005 to 2016. We use several statistical methods to assess the comovement among the returns during this period. We found evidence of strong comovement among the returns of all AFPs; the higher the percentage of risk rate of the investment instrument, the higher the comovement was. The introduction of a new AFP in 2010 did not change the comovement patterns. The comovement analysis study shows that the quality attributes of the products offered by the AFPs are homogeneous, supporting the idea that concentrated markets with homogeneous products could incentivize tacit collusive behavior, which could distort the functioning of the pension market, thereby affecting the aggregate well-being of workers.