Economists tackle the challenges of a pandemic

Business Economics - The COVID-19 pandemic radically and rapidly changed the world, including the world of business economists. Eight NABE members employed in a wide variety of fields discuss how...     

Emerging themes in banking: Recent literature and directions for future research

This paper presents a review of the recent banking literature centred on the core themes of performance, risk and governance of financial institutions. We write this review against the backdrop of the recent financial crisis and the major changes it caused to banking sectors in many countries. Several themes emerge, but the overarching issue relates to the need to better understand bank risk-taking incentives and the implications for systemic stability. Specifically, there is a need for more work on: the role of safety net subsidies and how these relate to systemic risk; financial innovation and the adoption of new products and processes; and how innovative behaviour links to risk-taking, market returns and contagion. Future research could also be directed to provide a better understanding of the inter-connections between competition, capital, profitability, liquidity and risk.     

MEASUREMENT ERROR IN THE BANK OF ITALY'S SURVEY OF HOUSEHOLD INCOME AND WEALTH

This paper is aimed at evaluating the incidence of measurement error in the Bank of Italy's Survey of Household Income and Wealth (SHIW). In the case of time-invariant variables, we assess the degree of inconsistency of answers given by panel households in subsequent survey waves. For quantities that vary with time, we estimate the incidence of measurement error by decomposing observed variability into true dynamics and error-induced noise. We apply the Heise model or the latent Markov model, depending on whether the data are continuous or categorical. We also present regression models that explain the error-generating process. Our results are relevant to researchers who use SHIW data for economic analysis, but also to data producers involved in similar income and wealth surveys. The methods we describe and test can be employed in a number of contexts to gain better understanding of data-related problems and plans for survey improvement.     

Economic Efficiency and Productivity Growth in the Post-Privatization Chilean Hydroelectric Industry

Chiles hydroelectric industry was privatized in 1985, but required to operate within a regulatory framework designed to achieve a competitive outcome. A centralized dispatch center was established to ensure production at minimum cost, subject to constraints on minimum release and minimum reservoir stock. A reluctance to rapidly reduce the industry work force may also have existed. We develop a constrained cost-minimization model for thermal and hydro generation to obtain the shadow price of water and to determine the qualitative effect of these constraints on allocative efficiency. Using panel data from 1986–1997, we assess the economic efficiency of the hydro industry by estimating a stochastic distance frontier and price equations from the dual cost-minimization problem. We find dramatic increases in technical change and productivity change, with positive efficiency change for all years but the last. We also observe a dramatic decline in allocative inefficiencies over our sample period. The share of hydro generation from run-of-river and thermal plants relative to reservoir plants has increased, presumably in reaction to the water release and reservoir stock constraints, reducing the relative over-utilization of capital to water from the pre-1985 regime. Further, the over-utilization of labor to capital and water has fallen over time. However, considerable allocative inefficiencies remain, consistent with our finding of industry-wide scale economies. Substantial cost savings would result if technical and allocative efficiency were eliminated.JEL Classification: L94, D24     

Cost-effectiveness of asenapine in the treatment of bipolar I disorder patients with mixed episodes

Objective:

Around one-third of patients with bipolar I disorder (BD-I) experience mixed episodes, characterized by both mania and depression, which tend to be more difficult and costly to treat. Atypical antipsychotics are recommended for the treatment of mixed episodes, although evidence of their efficacy, tolerability, and cost in these patients is limited. This study evaluates, from a UK National Health Service perspective, the cost-effectiveness of asenapine vs olanzapine in BD-I patients with mixed episodes.

Methods:

Cost-effectiveness was assessed using a Markov model. Efficacy was informed by a post-hoc analysis of two short-term clinical trials, with response measured as a composite Young Mania Rating Score and Montgomery-Åsberg Depression Rating Scale end-point. Probabilities of discontinuation and relapse to manic, mixed, and depressive episodes were sourced from published meta-analyses. Direct costs (2012–2013 values) included drug acquisition, monitoring, and resource use related to bipolar disorder as well as selected adverse events. Benefits were measured as quality-adjusted life years (QALYs).

Results:

For treating mixed episodes, asenapine generated 0.0187 more QALYs for an additional cost of £24 compared to olanzapine over a 5-year period, corresponding to a £1302 incremental cost-effectiveness ratio. The higher acquisition cost of asenapine was roughly offset by the healthcare savings conferred through its greater efficacy in treating these patients. The model shows that benefits were driven by earlier response to asenapine during acute treatment and were maintained during longer-term follow-up. Results were sensitive to changes in key parameters including short and longer-term efficacy, unit cost, and utilities, but conclusions remained relatively robust.

Conclusions:

Results suggest that asenapine is a cost-effective alternative to olanzapine in mixed episode BD-I patients, and may have specific advantages in this population, potentially leading to healthcare sector savings and improved outcomes. Limitations of the analysis stem from gaps in clinical and economic evidence for these patients and should be addressed by future clinical trials.     

Combating the effects of turnover: Military lessons learned from project teams rebuilding Iraq

The literature concerning turnover has traditionally been composed of studies and analyses which assume that turnover rates are malleable, and can be reduced. We take the opposite position and contend that turnover rates for certain organizations are not variable, but rather remain fixed. Is it possible, then, to reduce the deleterious effects of turnover without reducing the actual churn of individuals? To answer this question, we draw from experiences of the U.S. military during Operation Iraqi Freedom, in order to learn from its methods of dealing with high personnel turnover during the management of projects. Specifically, we offer four best practices that reduce the negative effects of turnover, while allowing the rate itself to remain constant. These best practices aim toward sharing the knowledge and mental models critical for sustained operations, to insulate the organization against the departure of key personnel. Herein, we demonstrate how efficient operations can be maintained amidst high churn rates.     

Bank-specific shocks and the real economy

Governments often justify interventions into the financial system in the form of bail outs or liquidity assistance with the systemic importance of large banks for the real economy. In this paper, we analyze whether idiosyncratic shocks to loan growth at large banks have effects on real GDP growth. We employ a measure of idiosyncratic shocks which follows Gabaix (forthcoming). He shows that idiosyncratic shocks to large firms have an impact on US GDP growth. In an application to the banking sector, we find evidence that changes in lending by large banks have a significant short-run impact on GDP growth. Episodes of negative loan growth rates and the Eastern European countries in our sample drive these results.     

Augmented Reality Smart Glasses (ARSG) visitor adoption in cultural tourism

ABSTRACT

A number of organizations in cultural tourism have started to explore the use of augmented reality (AR) to enhance visitor experience. While many studies have been conducted to identify adoption criteria of mobile AR applications, research exploring the adoption of augmented reality smart glasses (ARSG) is still limited. This paper contributes to the technology adoption literature by investigating attributes of visitor adoption of ARSG in cultural tourism. Twenty-eight interviews were conducted with visitors to a UK art gallery, where they experienced an ARSG application. Findings inform an ARSG adoption framework that integrates societal impact, perceived benefits, perceived attributes of innovation, and visitor resistance as the main themes of ARSG adoption in cultural tourism.     

Werte und Normen als Sollensvorstellungen in der KommunikationswissenschaftValues and norms as ought-statements in communication studies

Values and norms as research topics are central theoretical and empirical constructs in communication studies and are also used to substantiate research questions or to interpret results. Despite the relevance of values and norms, a respective debate within the discipline has been neglected so far. It is a challenge to discuss the values and norms of our discipline and to initiate an exchange of the societal relevance of one’s own research. The network “Values and norms as research objects and guiding principles in communication research”, funded by the German Research Foundation (DFG), makes a contribution to this by systematically analyzing values and norms in communication studies and by critically reflecting them. Therefore, the paper proposes to operationalize values and norms as “ought-statements”. Ought-statements either describe a situational state that is explicitly evaluated or address a desirable state. Three elements of an ought-statement are identified, which are coded in a multistage content analysis. The operationalization of norms and values as ought-statements allows not only to examine already known values and norms, but also to assess all possible values and norms, to assess the change of values and norms more validly in long-term studies, and to assess those constructs that are labeled as norms or values by the researchers themselves.