The price,quality and distribution of mortgage payment protection insurance: A hedonic pricing approach

Mortgage payment protection insurance (hereafter MPPI) provides varying combinations of accident, sickness and unemployment insurance and is used to protect the mortgage payments of policyholders in the event of a fall in income. Despite alleviating housing market failures, this service has been heavily criticised for providing poor value for money and being associated with unhelpful sales techniques especially when sold jointly with a mortgage in the UK. Consequently, the Competition Commission (2009) ruled that after February 2011 MPPI should not be sold jointly with mortgage lending within seven days of the credit transaction. We examine whether this prohibition was justified and if the form of distribution, either jointly with the mortgage or independently influences the premium levels. This assessment uses a hedonic pricing approach with details and premiums of MPPI policies in 2010 and 2012. Despite the success in reducing MPPI premium levels, we conclude that the Competition Commission judgement has raised concerns as to mortgagee protection.     

Post-socialist financial fragility: the case of Albania

The 1997 collapse of the Albanian economy caused by the collapseof economy-wide Ponzi schemes contrasts sharply to its successstatus as a post-Socialist transition country in the years 1992-1996.In this paper, an attempt is made to explain this 'AlbanianParadox'. The specific Albanian conditions for the growth ofPonzi schemes are identified. Theoretically, the Albanian Paradoxcan be interpreted as one version of the 'Financial InstabilityHypothesis' suggested by Minsky. Investigation of the underlyingfactors that render financial markets fragile suggest that theAlbanian case is extreme but not unique in the region. It isemphasised that sustainable growth is predicted on the qualityof government, on proper financial-sector regulation, on actualmicroeconomic restructuring and on the development of marketinstitutions through which adequate market information is disseminated.     

Openness, centralized wage bargaining, and inflation

This paper develops a model of an open economy containing both sectors in which wages are market-determined and sectors with wage-setting arrangements. A portion of the latter group of sectors coordinate their wages, taking into account that their collective actions influence the equilibrium inflation outcome in an environment in which the central bank engages in discretionary monetary policymaking. Key predictions forthcoming from this model are (1) increased centralization of wage setting initially causes inflation to increase at low degrees of wage centralization but then, as wage centralization increases, results in an inflation drop-off; (2) a greater degree of centralized wage setting reduces the inflation-restraining effect of greater central bank independence; and (3) increased openness is more likely to reduce inflation in nations with less centralized wage bargaining. Analysis of data for seventeen nations for the period 1970–1999 provides generally robust empirical support for all three of these predictions.     

Dynamic Incentive Contracts in Multiple Penalty Systems with No-commitment to Tenure-track Auditing

This paper generalizes Khalil's (1997) static model to a multiperiod one in the tenure-track auditing. Three penalty systems considered are full-transfer-dependent, partial-transfer-dependent, and transfer-independent ones. It is found that the equilibrium under the tenure-track auditing is also an equilibrium under the periodic auditing. The conditions under which the principal prefers the periodic auditing, or is indifferent between the two auditing schemes are derived. Incentive contracts may vary in different penalty systems. For instance, the equilibrium with principal’s sure ex post auditing exists only under the partial-transfer-dependent and transfer-independent penalty systems. And the equilibrium with the first-best contract as the first-period optimum appears merely under the transfer-independent penalty system.     

Optimal payment schemes for physicians

Increasingly, physicians payment schemes are being reformed to enhance performance and to ensure an optimal allocation of scarce medical resources. The empirical evidence points towards the use of mixed payment schemes that appear better at achieving efficiency than either lump sum payments (such as capitation) or piece rates (fee for service). Yet, this alleged superiority remains to be established from a theoretical standpoint. The Principal-Agent model developed in this paper offers a contribution in this line, with a primary care physician as agent and a public regulator as principal. Alternative specifications of the principals objective function are considered in the model (efficiency versus fairness). Uncertainty is introduced by two random variables that represent the probability for an individual of being ill and his productivity parameter which determines the amount of resources (the physicians effort in particular) necessary to restore health. The relationship is characterised by information asymmetry since the physician is assumed to observe both variables after the contract has been signed, but before choosing his effort level. Both selection and moral hazard issues are addressed in the model and the results show that, under GP risk neutrality, mixed payment schemes fully correct for both types of information asymmetry.Received: June 2002, Accepted: May 2003, JEL Classification: I18, I11, D82Rosella Levaggi: Correspondence toThe authors would like to thank participants to the LEA Barcelona Workshop, November 2001, to the Second Health Economics Workshop, Lisbon, February 2002 and two anonymous referees for their helpful comments. The usual disclaimer applies.     

Local flexibility in wage setting: evidence from the Norwegian local public sector

The public sectors in the Scandinavian countries have been prominent examples of centralized wage-setting systems. In Norway, more room for local flexibility was implemented by a wage frame system introduced in 1990 in which the national wage scale system merely works like a minimum wage system. We analyze the effect of this reform using a unique database where we can track employees and their local government over time and explore the consequences of controlling for fixed individual effects and fixed employer effects. We find that the wage dispersion increased across local governments after 1990, and that wages to some extent became more responsive to local government income, monopsony power and other local government characteristics after the reform. However, the numerical effects of the reform are estimated to be quite small.     

旅游立市与旅游利市--以桂林市为例

运用经济学的相关理论时"旅游立市"的含义进行了分析,并结合桂林近年来旅游业发展情况的实证分析,就旅游对创新的重要作用进行了探讨.     

Multiple Objective Approach as an Alternative to Radial Projection in DEA

Radial projection is a standard technique applied in data envelopment analysis (DEA) to calculate efficiency scores for input and/or output variables. In this paper, we have studied the appropriateness of radial projection for target setting. We have created a situation where the decision making units (DMUs) are free to choose their own target values on the efficient frontier and then compared the results to those of radial projection. In practice, target values are primarily used for future goal attainment; hence, not only preferences but also, and on the whole, change in time frame, affect the choice of target values. Based on that, we conducted an empirical experiment with an aim to study how the DMUs choose their most preferred target values on the efficient frontier. The subjects, who all were students of the Helsinki School of Economics, were given the freedom to explore their personalized efficient frontiers by using a multiple objective linear programming (MOLP) approach. To study various and relevant scenarios, the personalized efficient frontiers for all students were constructed in such a way that the current position of each student in relation to the frontier made him/her inefficient, efficient, or super-efficient. The results show that the use of radial projection for target setting is too restrictive.     

What Is the Way Forward for IASB’s Research Programme under the Evidence-Supported Approach? Some Analyses and Comments Based on the 2015 Agenda Consultation

The purpose of this paper is twofold: (1) the paper reviews the International Accounting Standards Board (IASB's) evidence-supported approach to standard setting, in particular the very broad definition of evidence that does not distinguish between scientific evidence used for developing the normative foundation (the standards) and observations in practice. Based on comparisons with medicine and auditing, we argue that there are good reasons for the IASB to separate scientific evidence from other sources of information. As producers of scientific evidence, the academic community must consider whether better alignment between publishing incentives and standard setting can be achieved. (2) Examining the 2015 Agenda Consultation, the ‘top-five’ research projects were identified: ‘Disclosure Initiative – Principles of Disclosure’, ‘Primary Financial Statements’, ‘Financial Instruments with Characteristics of Equity’, ‘Business Combinations under Common Control’, and ‘Goodwill and Impairment’. In order to further support evidence-informed standard setting, we provide research-based comments on these projects (based on the European Accounting Association's Agenda Consultation comment letter).     

The failed implementation of performance management in Irish central government

Ireland's Strategic Management Initiative was launched in 1994 and aimed to improve public services delivery. In line with public sector reforms in other countries, it placed strong emphasis on performance management in public sector organisations. Initiatives stressed the need for strategic planning and performance monitoring. The overall impact of these reforms was disappointing, with the Organisation for Economic Co‐operation and Development reporting in 2008 that the Irish public sector lacked a performance culture. This paper utilizes a series of interviews with senior managers in order to identify why performance management did not gain traction and our contribution highlights the complex contextual factors which undermined this agenda.