GROWING LIKE SPAIN: 1995–2007

Measured total factor productivity (TFP) fell in Spain during the boom years of 1995–2007. Using administrative data from the quasi-universe of firms, we show that there was an increase in misallocation, which was more severe in sectors where connections with public officials are more important for business success. We write and estimate a simple model of cronyism in which heterogeneous firms invest in political connections. Our quantitative exercise concludes that the institutional decline over this period costed 1.9% growth in TFP per year and a 0.8% annual increase in the resources spent by firms in establishing political connections.     

An alternative approach to estimating demand: Neural network regression with conditional volatility for high frequency air passenger arrivals

In this paper we provide an alternative approach to analyze the demand for international tourism in the Balearic Islands, Spain, by using a neural network model that incorporates time-varying conditional volatility. We consider daily air passenger arrivals to Palma de Mallorca, Ibiza and Mahon, which are located in the islands of Mallorca, Ibiza and Menorca, respectively, as a proxy for international tourism demand for the Balearic Islands. Spain is a world leader in terms of total international tourist arrivals and receipts, and Mallorca is one of the most popular destinations in Spain. For tourism management and marketing, it is essential to forecast high frequency international tourist demand accurately. As it is important to provide sensible international tourism demand forecast intervals, it is also necessary to model their variances accurately. Moreover, time-varying variances provide useful information regarding the risks associated with variations in international tourist arrivals.     

Horizontal Inequity and Vertical Redistribution

Inequality of post-tax income among pre-tax equals is evaluated andaggregated to form a global index of horizontal inequity in the income tax.The vertical action of the tax is captured by its inequality effect on averagebetween groups of pre-tax equals. Putting the two together, horizontalinequity measures loss of vertical performance. The identification problem,which has previously been thought insuperable, is addressed by a procedurevalidating the banding of income units into close equals groups. Thehorizontal and vertical effects of a major Spanish income tax reform areevaluated. Lines for future investigation are suggested.     

Simulated Annealing in Optimization of Energy Production in a Water Supply Network

In water supply systems, the potential exists for micro-hydropower that uses the pressure excess in the networks to produce electricity. However, because urban drinking water networks are complex systems in which flows and pressure vary constantly, identification of the ideal locations for turbines is not straightforward, and assessment implies the need for simulation. In this paper, an optimization algorithm is proposed to provide a selection of optimal locations for the installation of a given number of turbines in a distribution network. A simulated annealing process was developed to optimize the location of the turbines by taking into account the hourly variation of flows throughout an average year and the consequent impact of this variation on the turbine efficiency. The optimization is achieved by considering the characteristic and efficiency curves of a turbine model for different impeller diameters as well as simulations of the annual energy production in a coupled hydraulic model. The developed algorithm was applied to the water supply system of the city Lausanne (Switzerland). This work focuses on the definition of the neighborhood of the simulated annealing process and the analysis of convergence towards the optimal solution for different restrictions and numbers of installed turbines.     

Employees' overestimation of functional and relational service quality: A gap analysis

This study extends previous research on gap analysis of service quality by including not only functional service quality but also relational benefits. To this end, a field study was carried out in 36 hotels and 35 restaurants. The samples consisted of 213 employees and 657 customers. A questionnaire format was used to measure both functional and relational service quality, as well as customers' loyalty. When comparing employee and customer perceptions, gaps potentially range from ‘overestimation’ (employees' perceptions are greater than customers' perceptions) to ‘underestimation’ (customers' perceptions are greater than employees' perceptions). In general, the results indicated that the employees surveyed overestimated the service quality they offer to customers, although gaps were greater for certain service attributes than for others. In addition, some gaps were more related to customer loyalty than others. The findings also showed that employees' overestimation of relational benefits plays a moderating role, increasing the negative relationship between employees' overestimation of functional service quality and customers' loyalty. The theoretical and managerial implications of the results are discussed further in this paper.     

Treatment of wastewater containing high phenol concentrations using stabilisation ponds enriched with activated sludge.

Treatment of wastewater containing high phenol concentrations (up to 4,000 mg/l, 1,600 kg/ha.d) in laboratory-scale stabilisation ponds enriched with activated sludge was studied. Phenol was biodegraded efficiently, even when fed as the sole carbon source. At influent concentrations of 1,000, 1,300, 1,600, 1,900, 2,500, 3,000 and 4,000 mg/l of phenol (loading rates of 400, 520, 640, 760, 1,000, 1,200 and 1,600 kg phenol/ha.d), the phenol removal efficiencies were 92, 89, 81, 81, 76, 65 and 22%, respectively. At 4,000 mg/l of phenol, the enriched ponds were significantly inhibited. The maximum phenol removal rate observed was 780 kg/ha.d, which is 7.7 times higher than the maximum value reported for attached-growth waste stabilisation ponds. All along the experiments, the enriched ponds showed removal rates 1.8-20.5 times higher than the values observed in control pond (not enriched). The results suggest that enrichment is an effective method to increase xenobiotic removal rates of stabilisation ponds.     

APPROACHES TO INEQUALITY OF OPPORTUNITY: PRINCIPLES,MEASURES AND EVIDENCE

We put together the different conceptual issues involved in measuring inequality of opportunity, discuss how these concepts have been translated into computable measures, and point out the problems and choices researchers face when implementing these measures. Our analysis identifies and suggests several new possibilities to measure inequality of opportunity. The relevance of the conceptual issues and modelling choices are illustrated with findings from the empirical literature on income inequality of opportunity.     

INEQUALITY AND HAPPINESS

In recent years there has been an accumulation of empirical evidence suggesting that individuals dislike inequality. The literature has built upon estimating the degree of this dislike as well as its causes. The use of self‐reported measures of satisfaction or well‐being as a proxy for utility has been one of the empirical strategies used to this end. In this survey, we review the papers that estimate or examine the relationship between inequality and self‐reported happiness to conclude that inequality correlates negatively with happiness in Western societies. Some of the surveyed papers identify particular sources of heterogeneity on preferences over inequality. The evidence for non‐Western societies is more mixed and less reliable. Notwithstanding that, trust in the institutions seems to play an important role in shaping the relationship between income inequality and subjective well‐being. We conclude with suggestions for further research.     

Short-run Effects of Tariff Reform in Zimbabwe: Applied General Equilibrium Analysis

This paper applies a short-run computable general equilibriummodel for Zimbabwe to analyse how tariff reform could have modifiedthe effects of the actual trade liberalisation that took placein the 1990s. This is important because the trade liberalisationremoved quantitative restrictions but left tariff rates intact.The results show that tariffs on intermediates have held backproduction in traded sectors. Thus, the nature of the tradereform taken contributed to more deindustrialisation than necessary.The results also show the tradeoff with respect to the fiscalbalance, which points to the need to ensure that an alternativetax system is in place before removing customs tax revenue.     

Wages and skills utilization: effect of broad skills and generic skills on wages in Singapore

Many people go for training to upgrade their skills which is hoped to pave the way for better pay. But what are the kinds of skills that really affect wages? Employers have emphasized the value of generic skills such as interpersonal and communication skills, teamwork and problem solving. Does possession of these skills translate to at least the same or better wages as compared with having broad skills represented by educational qualifications and job‐related training? This paper, arising from the research project on the Skills Utilisation in Singapore, aims to answer which skills can have more influence on wages and which job‐related training in terms of training duration can have more impact on wages. Using ordinal logistic regression, our findings show that educational qualification and initial training time can influence wages as well as utilization of leadership, planning and problem‐solving skills.