Attrition in longitudinal panel data and the empirical analysis of dynamic labour market behaviour

In the empirical analysis of unemployment durations and job durations, it is generally assumed that the stochastic processes underlying labour market behaviour and the behaviour concerning participation in a panel survey are independent. However, there are reasons to believe that the probability of dropping out of the panel is related to the rate at which a (different) job is found. If there is such a relation, and if it is ignored, then the estimator of the rate at which individuals become employed or change jobs will generally be inconsistent. In this paper we analyse the relation between the duration spent in a particular labour market state and the duration of panel survey participation, by explicitly modelling and estimating the joint distribution of both durations. The emphasis will be on models allowing for stochastically related unobserved determinants of both types of duration. We estimate models both for unemployment durations and for job durations.     

Entry,exit and profitability

In this paper arguments are set forward explaining the interrelationship between the entry and exit decision. The simultaneous effect of entry and exit on profitability for some Belgian sectors is studied. The empirical results seem to suggest that future research in this area has to take into account the link between entry and exit.     

Tall buildings on cheap land: Building heights and intrabuilding travel costs

The optimum building height depends on the activity provided within the building. For an activity that provides central services to its tenants (e.g., food, recreation, medical care), intrabuilding travel costs are important. If the unit cost of horizontal travel exceeds the unit cost of vertical travel, a tall building will economize on intrabuilding travel costs, and may be efficient even if the price of land is relatively low. Some examples of relatively tall buildings are elderly housing facilities, hospitals, and hotels.     

The manufacturing/design interface

The paper explains why the traditional relationship between design and manufacturing needs to be changed and what it should be replaced with. Traditionally, the relationship has been sequential. At the beginning of the innovation process design goes ahead alone, manufacturing's input being largely overlooked. Only after the design has been completed does manufacturing take over responsibility, and only then may it emerge that re-design is necessary to make production feasible. The results can be high costs, late delivery and disappointing performance. The changes that have made this practice less supportable include shortened product lifecycles, Japanese competition, customers becoming increasingly quality-conscious, need to deliver exactly on time, and minimization of inventories. Fortunately, new technologies such as CAD/CAM and FMS have come along that can help to rectify these deficiencies; how far they are taken up and effectively used depends on the sharp distinction between the functions being discarded and replaced by their substantial integration. Possibilities that each enterprise could explore include ensuring continuous communication and cooperation between the functions, joint problem solving, replacement of functional management by project management, supplier involvement, elimination of the status differential between design and manufacturing, design for manufacturability, and better understanding by the design function of the realities of the business world. The author warns that integration may not be a universal cure. In particular, he suggests that the innovations closely linked with scientific advances may need some degree of functional differentiation. Changes in the competitive environment require manufacturing organizations to change their view on the relationship between manufacturing and design, and on the way the interface between these two functions has to be managed. In this paper we will first describe the traditional view. Afterwards we will describe the environmental changes that make us question the effectiveness of this view. Finally in a third part we will describe the characteristics of the new approach.     

Investigation of giving behavior to united way using log-linear modeling and discriminant analysis: An empirical study

Giving behavior toward a charitable organization is modeled by two different procedures: discriminant analysis and a log-linear model. Although the discriminant procedure is beter known in marketing, the log-linear approach has less restrictive model assumptions and may more accurately represent the conceptual basis of consumer decisions. Two situations are considered: (1) a simple binary classification of the giving decision, and (2) a three-group case of no gift, small, and large gift. Utilizing a large data base and a holdout sample for comparative purposes, the log-linear procedure is found to be an attractive alternative to discriminant analysis in terms of correct classification of individuals. Research support for this study was provided by the School of Business, University of Louisville     

Conventions and institutions in coordination problems

Summary This survey article starts with a game-theory interpretation of coordination problems that occur in an economy. Three types of games are discussed in which the degree of coordination versus conflict varies. It is shown that game-theoretic techniques for equilibrium selection or securing the highest pay-off outcome do not always suffice, which raises the need for exogenous information. Norms, such as conventions and institutions, may provide this information. The emergence and persistence of norms as well as the relationship between the type of game and the type of norm are discussed. After a discussion on conventions and rationality, some notions from Institutional Economics are introduced, in which institutions are explained as a way to deal with limited and costly information. Some applications are given in the last section.The author gratefully acknowledges comments given by Simon Kuipers, Hans van Ees, Elma van de Mortel and an anonymous referee without implicating them in remaining errors.     

PENSIONS AND PUBLIC CHOICE: THE ROAD TO MYNERS

The Myners Review of Institutional Investment is the latest of several classic examples of how Public Choice theory can be applied to the financial services industry. It demonstrates changing objectives and lack of knowledge and satisfies the vested interests of government and the pension fund advisory industry.     

Insurance as a Giffen good

When natural attrition from membership makes dividend-maximization a reasonable goal, are labor managers perverse? For homogeneous technologies, we demonstrate that improving product market conditions always lead the competitive dividend maximizer to substitute capital for labor if optimal scale is determinate.