Shortfall aversion

Shortfall aversion reflects the higher utility loss of spending cuts from a reference than the utility gain from similar spending increases. Inspired by Prospect Theory's loss aversion and the peak‐end rule, this paper posits a model of utility from spending scaled by past peak spending. In contrast to traditional models, which call for spending rates proportional to wealth, the optimal policy in this model implies a constant spending rate equal to the historical peak when wealth is relatively large. The spending rate increases when wealth reaches a model‐determined multiple of peak spending. In 1926–2015, shortfall‐averse spending is smooth and typically increasing.     

Who should sell stocks?

Never selling stocks is optimal for investors with a long horizon and a realistic range of preference and market parameters, if relative risk aversion, investment opportunities, proportional transaction costs, and dividend yields are constant. Such investors should buy stocks when their portfolio weight is too low and otherwise hold them, letting dividends rebalance to cash over time rather than selling. With capital gains taxes, this policy outperforms both static buy‐and‐hold and dynamic rebalancing strategies that account for transaction costs. Selling stocks becomes optimal if either their target weight is low or intermediate consumption is substantial.     

Mapping the antecedents of telework diffusion: firm‐level evidence from Italy

Previous literature has studied telework practices predominantly from the employees' perspective rather than exploring its use at the firm level. With the objective of contributing to reducing this research gap, the relationship between firms' adoption of telework and the firms' technological, organisational and environmental contexts is explored. Data were obtained from a survey conducted between 2005 and 2009 on a sample of 1,134 Italian firms in the Piedmont region. The results show an overall increase in the diffusion of telework primarily attributable to a rise in the adoption of ‘mobile’ work rather than home‐based forms of telework. The results also show that firms that had previously adopted information systems supporting core business processes and knowledge management were more inclined to adopt telework. Telework arrangements were more widely diffused among firms facing a growing and geographically dispersed market demand, and also in the contexts of higher levels of human capital and lower capital intensity.     

Restructuring the Alitalia business model

This paper analyzes the performance of the Italian airline company, Alitalia, after the deregulation in the air transport industry in the European Union. Company performance is analyzed using Tornqvist indices. The evidence shows as Alitalia productivity slowdown has been caused by the company failure to support an increase in input with a supply-oriented strategy.     

Deferred taxation under default risk

In this article, we have used a continuous EBIT-based model to study deferred tax liabilities under default risk. Quite surprisingly, default risk has been disregarded in research on deferred taxation. In order to underline its importance, we first calculated the probability of default, over a given time period, together with the contingent value of tax deferral. We then applied our theoretical model to a sample of 27,749 OECD companies. We showed that, when accounting for both firms with a negative EBIT and firms with a probability of default higher than 50% (over a 10-year period), a relevant percentage of firms were close enough to default. Hence, the expected present value of deferred taxes is much lower than that obtained in a deterministic context. From the Government’s point of view, deferred tax liabilities are a risk-free loan. Since only a portion are subsequently repaid, the Government should account for future losses due to companies’ default. So far, these estimates have been missing, although techniques do exist and are quite practical.     

The economic impact of digital technologies in Europe

This paper analyses the economic impact of digital technologies in Europe distinguishing between different stages/domains of the digitalization process. A set of composite Information and Communication Technologies (ICT) indicators is used for capturing the access to ICTs, the ability to use them and the digital empowerment of individuals in key social and economic domains. We argue that the mere accessibility to ICT facilities is only a pre-condition for moving towards a digitalized society, while the ‘level’ and the ‘quality’ in the use of these technologies, as well as the conditions facilitating or hampering digital empowerment, play a much more important role. Several transmission mechanisms from ICT access, usage and digital empowerment to key macro-economic variables (namely labour productivity, gross domestic product per capita, employment growth and the employment rate) are identified. The econometric evidence supports our hypotheses showing that the usage of ICT, and mostly digital empowerment, exert the major economic effects, especially on employment also favouring the inclusion of ‘disadvantaged’ groups in the labour market. We conclude that digitalization may drive productivity and employment growth and that inclusive policies may effectively contribute to bridge the gap between the most favoured and the disadvantaged parts of the population, thus helping in achieving the 2020 Europe targets.     

Gender Differences in Sorting

In this paper, we investigate gender differences in workers’ career development within and outside the firm to explain the existence of gender wage gaps. Using Danish employer–employee matched data, we find that good female workers are more likely to move to better firms than men but are less likely to be promoted. Furthermore, these differences in career advancement widen after the first child is born. Our findings suggest that career impediments in certain firms cause the most productive female workers to seek better jobs in firms in which there is less gender bias.     

Off-season tourists and the cultural offer of a mass-tourism destination: The case of Rimini

This paper assesses the potential implications on off-season tourism of enhancing the cultural offer of Rimini, a popular Italian seaside holiday destination hosting about 12 million overnight stays per year. Since more than 9 million of these stays are concentrated in the summer season, in the last 20 years. Rimini has been undergoing a policy of seasonality smoothing, which mainly pivots around business and cultural tourism. This assessment has been carried out through discrete choice experiments submitted to a sample of about 800 tourists who visited Rimini outside the summer months. Since tourism can be viewed as a composite good, which overall utility depends on how the component characteristics are arranged, the choice experiments allow to disentangle the importance and the willingness to pay of tourists for different attributes of the holiday. The choice model incorporates a number of possible changes to actual tourism features (which are also the subject of public debate), including them in hypothetical alternative “holiday packages”. The conditional logit analysis of the choice experiments can highlight any synergy or trade-off between cultural and business tourism. Results suggest that business and leisure tourists share many features related to the use of the territory, while there are important trade-offs between these two groups and cultural tourists. Since business tourists have a higher willingness to extend their stay, a softer budget, and their demand is also complementary to the demand of summer tourists (Brau, Scorcu, & Vici, 2009), from the destination point of view investing in this market segment would be the best option. Although a “second best”, however, cultural tourists share with the local population of Rimini many aspects of the demand of territory (Figini, Castellani, & Vici, 2009). Hence, cultural tourism can play a fundamental role in the intermediate season as a tool for smoothing seasonality, to diversify investments and to give value to the city’s cultural heritage.