Publications

Abstract:
Food Price Dynamics and Price Adjustment in the EU.

 

Abstract:
A PRIMER ON BOOTSTRAP TESTING OF HYPOTHESES IN TIME SERIES MODELS: WITH AN APPLICATION TO DOUBLE AUTOREGRESSIVE MODELS.

In this article, we discuss the bootstrap as a tool for statistical inference in econometric time series models. Importantly, in the context of testing, properties of the bootstrap under the null (size) as well as under the alternative (power) are discussed. Although properties under the alternative are crucial to ensure the consistency of bootstrap-based tests, it is often the case in the literature that only validity under the null is discussed. We provide new results on bootstrap inference for the class of double-autoregressive (DAR) models. In addition, we review key examples from the bootstrap time series literature in order to emphasize the importance of properly defining and analyzing the bootstrap generating process and associated bootstrap statistics, while also providing an up-to-date review of existing approaches. DAR models are particularly interesting for bootstrap inference: first, standard asymptotic inference is usually difficult to implement due to the presence of nuisance parameters; second, inference involves testing whether one or more parameters are on the boundary of the parameter space; third, even second-order moments may not exist. In most of these cases, the bootstrap is not considered an appropriate tool for inference. Conversely, and taking testing nonstationarity to illustrate, we show that although a standard bootstrap based on unrestricted parameter estimation is invalid, a correct implementation of the bootstrap based on restricted parameter estimation (restricted bootstrap) is first-order valid. That is, it is able to replicate, under the null hypothesis, the correct limiting distribution. Importantly, we also show that the behavior of this bootstrap under the alternative hypothesis may be more involved because of possible lack of finite second-order moments of the bootstrap innovations. This feature makes for some parameter configurations, the restricted bootstrap unable to replicate the null asymptotic distribution when the null is false. We show that this possible drawback can be fixed by using a novel bootstrap in this framework. For this “hybrid bootstrap,” the parameter estimates used to construct the bootstrap data are obtained with the null imposed, while the bootstrap innovations are sampled with replacement from unrestricted residuals. We show that the hybrid bootstrap mimics the correct asymptotic null distribution, irrespective of the null being true or false. Monte Carlo simulations illustrate the behavior of both the restricted and the hybrid bootstrap, and we find that both perform very well even for small sample sizes. 

Abstract:
Bootstrapping Noncausal Autoregressions: with Applications to Explosive Bubble Modeling.

© 2020, © 2020 American Statistical Association. In this article, we develop new bootstrap-based inference for noncausal autoregressions with heavy-tailed innovations. This class of models is widely used for modeling bubbles and explosive dynamics in economic and financial time series. In the noncausal, heavy-tail framework, a major drawback of asymptotic inference is that it is not feasible in practice as the relevant limiting distributions depend crucially on the (unknown) decay rate of the tails of the distribution of the innovations. In addition, even in the unrealistic case where the tail behavior is known, asymptotic inference may suffer from small-sample issues. To overcome these difficulties, we propose bootstrap inference procedures using parameter estimates obtained with the null hypothesis imposed (the so-called restricted bootstrap). We discuss three different choices of bootstrap innovations: wild bootstrap, based on Rademacher errors; permutation bootstrap; a combination of the two (“permutation wild bootstrap”). Crucially, implementation of these bootstraps do not require any a priori knowledge about the distribution of the innovations, such as the tail index or the convergence rates of the estimators. We establish sufficient conditions ensuring that, under the null hypothesis, the bootstrap statistics estimate consistently particular conditionaldistributions of the original statistics. In particular, we show that validity of the permutation bootstrap holds without any restrictions on the distribution of the innovations, while the permutation wild and the standard wild bootstraps require further assumptions such as symmetry of the innovation distribution. Extensive Monte Carlo simulations show that the finite sample performance of the proposed bootstrap tests is exceptionally good, both in terms of size and of empirical rejection probabilities under the alternative hypothesis. We conclude by applying the proposed bootstrap inference to Bitcoin/USD exchange rates and to crude oil price data. We find that indeed noncausal models with heavy-tailed innovations are able to fit the data, also in periods of bubble dynamics. Supplementary materials for this article are available online. 

Abstract:
Circular Economy as Fictional Expectation to Overcome Societal Addictions. Where do We Stand?.

Circular economy thinking has become the subject of academic enquiry across several disciplines recently. Yet whilst its technical and business angles are more widely discussed, its philosophical underpinnings and socio-economic implications are insufficiently investigated. In this article, we aim to contribute to their understanding by uncovering the circular economy role in shaping a new vision, highlighting the social and economic dimensions of future imaginaries and the mechanisms that can enable them to bring about change in the social context. We believe that defining the vision that the circular economy is contributing to shape is key to explain its conceptual framework and activities. Drawing on the concept of fictional expectations, we uncover one of the plausible social dimensions inherent to the circular economy thinking thereby opening up a new perspective on the current debate in the circular economy literature wherein authors, by contrast, are emphasising the lack of an explicit social dimension. Fictional expectations are introduced to refer to those imaginaries of the future that can catalyse social action in the present and counteract societal addictions, in which modern society seems to be trapped. We show how a circular economy inspired vision can be instrumental to the emergence of a fictional expectation that can provide therapies to the current societal addiction of wasteful production and consumption systems. This philosophical background allows us to provide, in conclusion, a new conceptualisation of the circular economy as a cognitive framework instrumental to the emergence of a future imaginary. 

Abstract:
Universals and variations in moral decisions made in 42 countries by 70,000 participants.

When do people find it acceptable to sacrifice one life to save many? Cross-cultural studies suggested a complex pattern of universals and variations in the way people approach this question, but data were often based on small samples from a small number of countries outside of the Western world. Here we analyze responses to three sacrificial dilemmas by 70,000 participants in 10 languages and 42 countries. In every country, the three dilemmas displayed the same qualitative ordering of sacrifice acceptability, suggesting that this ordering is best explained by basic cognitive processes rather than cultural norms. The quantitative acceptability of each sacrifice, however, showed substantial country-level variations. We show that low relational mobility (where people are more cautious about not alienating their current social partners) is strongly associated with the rejection of sacrifices for the greater good (especially for Eastern countries), which may be explained by the signaling value of this rejection. We make our dataset fully available as a public resource for researchers studying universals and variations in human morality. 

Abstract:
Drivers are blamed more than their automated cars when both make mistakes.

When an automated car harms someone, who is blamed by those who hear about it? Here, we asked human participants to consider hypothetical cases in which a pedestrian was killed by a car operated under shared control of a primary and a secondary driver, and to indicate how blame should be allocated. We find that when only one driver makes an error, that driver is blamed more, regardless of whether that driver is a machine or a human. However, when both drivers make errors in cases of human-machine shared-control vehicles, the blame attributed to the machine is reduced. This finding portends a public under-reaction to the malfunctioning AI components of automated cars and therefore has a direct policy implication: allowing the de-facto standards for shared-control vehicles to be established in courts by the jury system could fail to properly regulate the safety of those vehicles; instead, a top-down scheme (through federal laws) may be called for. 

Abstract:
Endogenous Price Leadership with Asymmetric Costs: Experimental Evidence.

© 2019 SAGE Publications India Pvt. Ltd. This paper presents experimental evidence on the action commitment game with cost-asymmetric firms in a differentiated-products Bertrand duopoly. Unlike its quantity-setting counterpart, the risk-dominant leader–follower equilibrium Pareto dominates the simultaneous-move equilibrium. This equilibrium also minimizes payoff differences between firms. Hence, one would expect the model to accurately capture behavior. The evidence partially supports the theory: low-cost firms price in the first period more often than high-cost firms, and depending on the treatment, between 40 and 57 per cent of all observations conform to equilibrium play. However, the modal timing outcome involved both firms delaying their pricing decision. This timing outcome is characterized by Nash play and some collusion. The high frequency of delaying decisions could be due to a desire to reduce strategic uncertainty. 

Abstract:
Multiple‑Purchaser Payments for Ecosystem Services: an Exploration Using Spatial Simulation Modelling.

This paper focuses on the issue of payments for ecosystem services (PES) mechanism design when the activity incentivised through the scheme benefits multiple groups, each of whom might be prepared to contribute to payments made through the scheme. In particular, we examine spatial coordination on the demand side of the market; that is to say, the question of which beneficiary of the PES scheme buys land-management changes on which land parcels. We show through spatial simulation modelling that it is possible for negotiation to lead to Pareto improvements when compared to solutions reached through non-cooperative strategic solutions; however, we also show that this result is not universal and only holds under certain conditions. In particular, the spatial correlation and spatial interdependence of the ecosystem service benefits are key in determining whether negotiation between beneficiaries is optimal and therefore if policy makers and designers of PES schemes should be prioritising bringing together multiple beneficiaries of ecosystem services. 

Abstract:
Product market competition and gender discrimination.

© 2018 Elsevier B.V. This paper presents novel empirical evidence for the prediction from Becker's (1957) classical theory, that competition drives discrimination out of the market. We use a comprehensive business registration reform in Portugal as a quasi-natural experiment to study the effect of increased product market competition on gender discrimination. We use employer-employee data for the universe of private sector firms and workers, and exploit the staggered implementation of the reform across municipalities for identification. Increased competition following the reform increases growth of the female employment share and reduces the gender pay gap for middle-managers and for medium- and high-skilled workers but not for top-managers or the unskilled. We also find that discriminatory employers, approximated by a low female employment share, are more likely to exit and those that survive reduce overall employment growth following the reform, while non-discriminatory employers grow faster. Existing evidence has shown that gender discrimination reduces output; our findings suggest that entry deregulation can contribute to reduce inefficiencies arising from gender discrimination. 

Abstract:
Property rights enforcement with unverifiable incomes.

© 2018, Springer-Verlag GmbH Germany, part of Springer Nature. I study the extent of secure property rights a planner can implement. Agents can produce output, appropriate others’ output, or work in property rights enforcement. The planner pays enforcement personnel using taxes collected from producers who can hide income from taxation at a cost. The planner implements perfectly secure property rights by incentivizing production through redistributive taxation and absorbing potential appropriators as enforcement personnel. Both taxation and employment in enforcement institutionalize redistribution that would otherwise take place through appropriation. Higher costs of hiding income permit more redistributive taxation and less enforcement, leading to more production and higher welfare. 

Abstract:
Religious fragmentation, social identity and other-regarding preferences: Evidence from an artefactual field experiment in India.

© 2019 Elsevier Inc. We examine the impact of religious identity and village-level religious fragmentation on other-regarding preferences. We report on a series of two-player binary Dictator experiments conducted on a sample of 516 Hindu and Muslim participants in rural West Bengal, India. Our treatments are the identity of the two players and the degree of religious fragmentation in the village where subjects reside. Both Muslims’ and Hindus’ aversion to advantageous inequality declines as the probability of facing an out-group member increases. We find no evidence of aversion to disadvantageous inequality on either religious sample. Both Muslim and Hindu participants display aversion to advantageous inequality in both fragmented villages and homogeneous villages. The effect of village fragmentation on aversion to disadvantageous inequality differs across religious groups. 

Abstract:
The naturalisation of the mind and neurosciences: a reform of anthropology?.

Naturalisation of mind and neurosciences seem to propose a new an-thropology, since man is identified more and more to an automaton and thought in continuation with the animal. In this article we highlight some of the defining characteristics of this research programme and we pro-pose some theoretical reflections on it, concluding that materialistic monism not only ends up. being self-refuting, by presenting itself as a conception – thus as a system of ideas – of reality and of man, but also, by bracketing the principle of consciousness, it abstracts also from the principle of responsibility, with potential ill-fated consequences at the anthropological level. 

Abstract:
Wild bootstrap seasonal unit root tests for time series with periodic nonstationary volatility.

© 2017, © 2017 Taylor. &. Francis Group, LLC. We investigate the behavior of the well-known Hylleberg, Engle, Granger and Yoo (HEGY) regression-based seasonal unit root tests in cases where the driving shocks can display periodic nonstationary volatility and conditional heteroskedasticity. Our set up allows for periodic heteroskedasticity, nonstationary volatility and (seasonal) generalized autoregressive-conditional heteroskedasticity as special cases. We show that the limiting null distributions of the HEGY tests depend, in general, on nuisance parameters which derive from the underlying volatility process. Monte Carlo simulations show that the standard HEGY tests can be substantially oversized in the presence of such effects. As a consequence, we propose wild bootstrap implementations of the HEGY tests. Two possible wild bootstrap resampling schemes are discussed, both of which are shown to deliver asymptotically pivotal inference under our general conditions on the shocks. Simulation evidence is presented which suggests that our proposed bootstrap tests perform well in practice, largely correcting the size problems seen with the standard HEGY tests even under extreme patterns of heteroskedasticity, yet not losing finite sample relative to the standard HEGY tests. 

Abstract:
Broken Promises and Hidden Partnerships: an Experiment.

Previous research indicates that cheap-talk promises promote cooperation. We extend the empirical study of promises to a three person environment. Doing this enabled us to study two features of promises in the naturally occurring world that have not been studied in the previous literature. For one, we are able to determine the impact of “contingent” promises, which refers to promises that need to be kept (or broken) only in the event that another event first occurs. Second, we were able to study “promise chains”, by which we mean a set of sequentially-made promises. In both cases, we are able to apply existing theories to these novel environments to predict promise keeping behavior. Consistent with theory predictions, we find that promises are not necessary, and do not change behavior, when incentives are aligned. When there is conflict of interest, and when a promise is definite (that is, not contingent), we find that people are indeed willing to forgo monetary payoff to keep their promises. However, when the promise is contingent, promises no longer promote cooperation: people are equally like to choose a selfish action regardless whether they made a promise. Finally, we find that promise chains do not promote trustworthiness, with people at the end of the chain no more likely to honor their promises than people at earlier positions, despite the additional indirect harm that people later in the chain cause by defecting. Our findings offer insights relevant for the behavioral economic theory of guilt aversion. 

Abstract:
Co-integration Rank Determination in Partial Systems Using Information Criteria.

© 2017 the Department of Economics, University of Oxford and John Wiley. &. Sons Ltd We investigate the asymptotic and finite sample properties of the most widely used information criteria for co-integration rank determination in ‘partial’ systems, i.e. in co-integrated vector autoregressive (VAR) models where a sub-set of variables of interest is modelled conditional on another sub-set of variables. The asymptotic properties of the Akaike information criterion (AIC), the Bayesian information criterion (BIC) and the Hannan–Quinn information criterion (HQC) are established, and consistency of BIC and HQC is proved. Notably, the consistency of BIC and HQC is robust to violations of weak exogeneity of the conditioning variables with respect to the co-integration parameters. More precisely, BIC and HQC recover the true co-integration rank from the partial system analysis also when the conditional model does not convey all information about the co-integration parameters. This result opens up interesting possibilities for practitioners who can now determine the co-integration rank in partial systems without being concerned about the weak exogeneity of the conditioning variables. A Monte Carlo experiment based on a large dimensional data generating process shows that BIC and HQC applied in partial systems perform reasonably well in small samples and comparatively better than ‘traditional’ methods for co-integration rank determination. We further show the usefulness of our approach and the benefits of the conditional system analysis in two empirical illustrations, both based on the estimation of VAR systems on US quarterly data. Overall, our analysis shows the gains of combining information criteria with partial system analysis. 

Abstract:
Decentralization and fuel subsidies.

© 2018 Elsevier B.V. This paper explores the role of decentralization in explaining variation in fuel subsidies across countries. Using panel data over the period 1998-2008 and for 108 countries, it emerges that the effect of ‘decentralization’ (taken to be an increase in the number of government levels) broadly decreases both diesel and gasoline subsidies, with this effect being more pronounced when the level of political accountability is low. For developing countries, for which political accountability is low, decentralization decreases gasoline and diesel subsidies by at least 6.98% and 12.99%, respectively. For developed countries, for which political accountability is high, decentralization does not have any impact on both gasoline and diesel. What this evidence points to is that in developing economies, where voters are poorly informed and accountability is low, decentralization appears to be associated with lower fuel subsidies. 

Abstract:
Determining the cointegration rank in heteroskedastic var models of unknown order.

© Cambridge University Press 2016. We investigate the asymptotic and finite sample properties of a number of methods for estimating the cointegration rank in integrated vector autoregressive systems of unknown autoregressive order driven by heteroskedastic shocks. We allow for both conditional and unconditional heteroskedasticity of a very general form. We establish the conditions required on the penalty functions such that standard information criterion-based methods, such as the Bayesian information criterion [BIC], when employed either sequentially or jointly, can be used to consistently estimate both the cointegration rank and the autoregressive lag order. In doing so we also correct errors which appear in the proofs provided for the consistency of information-based estimators in the homoskedastic case by Aznar and Salvador (2002, Econometric Theory 18, 926-947). We also extend the corpus of available large sample theory for the conventional sequential approach of Johansen (1995, Likelihood-Based Inference in Cointegrated Vector Autoregressive Models. Oxford University Press) and the associated wild bootstrap implementation thereof of Cavaliere, Rahbek, and Taylor (2014, Econometric Reviews 33, 606-650) to the case where the lag order is unknown. In particular, we show that these methods remain valid under heteroskedasticity and an unknown lag length provided the lag length is first chosen by a consistent method, again such as the BIC. The relative finite sample properties of the different methods discussed are investigated in a Monte Carlo simulation study. The two best performing methods in this study are a wild bootstrap implementation of the Johansen (1995, Likelihood-Based Inference in Cointegrated Vector Autoregressive Models. Oxford University Press) procedure implemented with BIC selection of the lag length and joint IC approach (cf. Phillips, 1996, Econometrica 64, 763-812) which uses the BIC to jointly select the lag order and the cointegration rank. 

Abstract:
High stakes: a little more cheating, a lot less charity.

© 2018 Elsevier B.V. We explore the downstream consequences of cheating–and resisting the temptation to cheat–at high stakes on pro-social behaviour and self-perceptions. In a large online sample, we replicate the seminal finding that cheating rates are largely insensitive to stake size, even at a 500-fold increase. We present two new findings. First, resisting the temptation to cheat at high stakes led to negative moral spill-over, triggering a moral license: participants who resisted cheating in the high stakes condition subsequently donated a smaller fraction of their earnings to charity. Second, participants who cheated maximally mispredicted their perceived morality: although such participants thought they were less prone to feeling immoral if they cheated, they ended up feeling more immoral a day after the cheating task than immediately afterwards. We discuss the theoretical implications of our findings on moral balancing and self-deception, and the practical relevance for organisational design. 

Abstract:
How feedback about leadership potential impacts ambition, organizational commitment, and performance.

© 2018 Elsevier Inc. In the present research we report results from two experimental studies that examine how feedback about leadership potential impacts leadership ambition, organizational commitment, and performance. Study 1 used an experimental vignette methodology that controls for prior performance. Results show that individuals who receive feedback that they have low potential to be a future leader have lower ambition and organizational commitment relative to those who receive feedback that they have high potential to be a future leader. Study 2 provides evidence of the causal behavioral effects of feedback about leadership potential using a real task effort environment. Results show that participants informed to be unlikely future leaders display lower performance in a subsequent task than participants informed to be likely future leaders. The findings from the two studies demonstrate that information about leadership potential affects subsequent ambition to become leaders as well as performance. We discuss the implications of these findings for the importance of followership, talent management, and leadership succession. 

Abstract:
La relazione di coscienza e oggetto nell’Introduzione alla Fenomenologia dello spirito di Hegel. [The relation between concept and object in the Introduction to Hegel’s Phenomenology of Spirit].

The relation between consciousness and object in the Introduction to the Phenomenology of Spirit synthetises two fundamental Hegelian concepts: that of “relation” and that of “absolute”. In this article we show that Hegel not always interprets the relation as a medium between extremes, because in some very significant passages he intends it as an act. Furthermore the absolute is not only interpreted as determined but also as emergent beyond the universe of determinations, that is beyond the relation/contraposition of determined and undetermined. 

Abstract:
Metaphysical Realism and Objectivity: Some Theoretical Reflections.

In this paper we aim to show an intrinsic contradiction of contemporary Metaphysical Realism by focusing on the relation between the subject and the object. Metaphysical Realism considers facts and objects as being empirical, and therefore they are considered in relation to the subject, while at the same time facts are assumed to belong to an autonomous and independent reality. However, if a real object is considered to be independent from the subject, once it enters in a relation with the latter, a real object must undergo an intrinsic transformation. However, since an object cannot avoid this transformation then recovering the real or “absolute” object from the perceived object is not possible. In this way, the inherent contradiction of the “absolute” as being determined, i.e. defined by virtue of a limit, is revealed. 

Abstract:
Public funding for public goods: a post-Brexit perspective on principles for agricultural policy.

© 2018 the Authors in early 2019 the United Kingdom is due to leave the European Union and with it the Common Agricultural Policy. The UK Government has announced its intentions to formulate a novel agricultural policy following the principle that public funding should be restricted to the provision of public goods. However, the acceptance, interpretation and application of this principle is the subject of intense debate. We overview the background to this debate, reveal the major flaws in present policy and identify and provide our answers to three key questions which future policy must address: (1) What are the farm related public goods that public money should support?; (2) How should that spending be allocated?; (3) How much should be spent? We believe that these questions and their answers will be of general interest beyond the UK. 

Abstract:
The Economic Consequences of Political Donation Limits.

© 2017 the London School of Economics and Political Science the economic consequences of limits on political donations depend on the degree of political competition. Donors, who are ideologically aligned with candidates, decide how much to contribute to their own candidate. They may benefit from rent-seeking by their own candidate but dislike rent-seeking by the opposition. Increased rent-seeking by politicians thus generates campaign contributions for themselves but also mobilizes donations to the opposing candidate, potentially to a greater extent. This latter effect acts as a deterrent to rent-seeking when contributions finance electoral campaigns and positively affect election chances. When political competition is low, incumbent donors outnumber opposition donors, and limits reduce rent-seeking. When political competition is high, donors are equalized and laissez-faire reduces rent-seeking. Consistent with these hypotheses, data from the USA suggest that limits are associated with better policies and stronger growth performance at low levels of political competition, while laissez-faire is preferred when political competition is high. 

Abstract:
The Moral Machine experiment.

With the rapid development of artificial intelligence have come concerns about how machines will make moral decisions, and the major challenge of quantifying societal expectations about the ethical principles that should guide machine behaviour. To address this challenge, we deployed the Moral Machine, an online experimental platform designed to explore the moral dilemmas faced by autonomous vehicles. This platform gathered 40 million decisions in ten languages from millions of people in 233 countries and territories. Here we describe the results of this experiment. First, we summarize global moral preferences. Second, we document individual variations in preferences, based on respondents’ demographics. Third, we report cross-cultural ethical variation, and uncover three major clusters of countries. Fourth, we show that these differences correlate with modern institutions and deep cultural traits. We discuss how these preferences can contribute to developing global, socially acceptable principles for machine ethics. All data used in this article are publicly available. 

Abstract:
Unit root inference for non-stationary linear processes driven by infinite variance innovations.

© Cambridge University Press 2016. The contribution of this paper is two-fold. First, we derive the asymptotic null distribution of the familiar augmented Dickey-Fuller [ADF] statistics in the case where the shocks follow a linear process driven by infinite variance innovations. We show that these distributions are free of serial correlation nuisance parameters but depend on the tail index of the infinite variance process. These distributions are shown to coincide with the corresponding results for the case where the shocks follow a finite autoregression, provided the lag length in the ADF regression satisfies the same o(T1/3) rate condition as is required in the finite variance case. In addition, we establish the rates of consistency and (where they exist) the asymptotic distributions of the ordinary least squares sieve estimates from the ADF regression. Given the dependence of their null distributions on the unknown tail index, our second contribution is to explore sieve wild bootstrap implementations of the ADF tests. Under the assumption of symmetry, we demonstrate the asymptotic validity (bootstrap consistency) of the wild bootstrap ADF tests. This is done by establishing that (conditional on the data) the wild bootstrap ADF statistics attain the same limiting distribution as that of the original ADF statistics taken conditional on the magnitude of the innovations. 

Abstract:
Zika virus incidence, preventive and reproductive behaviors: Correlates from new survey data.

During the outbreak of the Zika virus, Brazilian health authorities recommended that pregnant women take meticulous precaution to avoid mosquito bites and that women in general use contraceptive methods to postpone/delay pregnancies. In this article, we present new estimates on the Zika virus incidence, its correlates and preventive behaviors in the Northeast of Brazil, where the outbreak initiated, using survey data collected between March 30th and June 3rd of 2016. The target population were women aged 15-49 in the capital cities of the nine states of the Northeast region of Brazil. We find that more educated women were less likely to report suffering from Zika (or its symptoms) and more likely to report having taken precaution against Zika, such as having used long and light-colored clothes, having used mosquito repellent or insecticides, having used mosquito protective screens or kept windows closed, and having dumped standing water where mosquitoes can breed. In addition, more educated women were more likely to report being informed about the association between Zika and microcephaly and to avoid pregnancy in the last 12 months. Finally, we also find that women who reported experiencing sexual domestic violence in the last 12 months were more likely to report suffering from Zika. 

Abstract:
A theory of trade policy under dictatorship and democratization.

© 2017 This paper develops a new model of trade policy under dictatorship and democratization. The paper makes two contributions. One is to provide a deeper understanding of the relationship between political institutions and economic efficiency by studying the endogenous interaction between the form of government and trade policy. The paper's second contribution is to show how a dictatorship can manipulate trade policy to maintain its grip on power in the face of permanent world price shocks, thus opening the door to a re-examination of trade policy responses to technology shocks. The model is used to explain an interesting episode of trade policymaking between 1815 and 1846, during which time Britain substantially liberalized trade while Prussia, on the other side of the grain market, significantly increased protectionism. 

Abstract:
How Property Markets Determine Welfare Outcomes: an Equilibrium Sorting Model Analysis of Local Environmental Interventions.

This paper examines the pivotal role played by property markets in determining the magnitude and distribution of welfare changes resulting from localised environmental change. We address that issue using an equilibrium sorting model (ESM) calibrated, by way of example, to the circumstances of a road infrastructure project in the English town of Polegate. Previous ESM research has tended to assume that all households rent property from a fixed property stock. The narrative that arises from those models concerns environmental gentrification, wherein access to environmentally improved locations is appropriated by the relatively wealthy through their ability to out-compete the less wealthy in the rental property market. Our research shows that to be only part of a much more complex story. We develop a model that extends the sophistication with which ESMs replicate property market dynamics, allowing for households to choose whether to rent or purchase their home and introducing greater realism into housing supply responses to changing market conditions. Our research shows that property markets redistribute welfare gains across the population in complex ways in which tenure choice and housing supply constraints play central roles. 

Abstract:
Information Transmission within Federal Fiscal Architectures: Theory and Evidence.

This paper explores the role of information transmission and misaligned interests across levels of government in explaining variation in the degree of decentralization across countries. Within a two-sided incomplete information principal-agent framework, it analyzes two alternative policy-decision schemes��decentralization� and �centralization��when �knowledge� consists of unverifiable information and the quality of communication depends on the conflict of interests between the government levels. It is shown that, depending on which level of policy decision-making controls the degree of decentralization, the extent of misaligned interests and the relative importance of local and central government knowledge affects the optimal choice of policy-decision schemes. The empirical analysis shows that countries� choices depend on the relative importance of their private information and the results differ significantly between unitary and federal countries. 

Abstract:
La relazione come fondamento nella lettura di Anassimandro offerta da Heidegger e da Severino [Relation as ground in the reading of Anaximander by Heidegger and Severino].

Relation as ground in the reading of Anaximander by Heidegger and Severino. In this article the authors show that Heidegger and Severino interpret Anaximander’s ἄπειρον as a ground that either ends up in a relation (Heidegger) or is constituted by virtue of the relation itself (Severino). In Anaximander the concept of the unlimited is established with reference to the concept of limit: the limited requires an unlimited ground that can justify it, the latter must transcend the limit, however the limit is a relation. Thus if the unlimited is absolute, it cannot admit a relation with something different from it: neither a relation which holds between the ground and the determined beings, nor a relation within itself, which would convert it a sum-of-parts. The ontological difference itself must be understood as the undeniable emergence of the ground beyond the grounded and the ground is not bound to that over which it emerges. The bound can only attain that which is limited, so that the universe of determined beings is an unending tension to the ground, which can only aim for an ideal realisation. 

Abstract:
Le premesse concettuali de La Struttura Originaria di Emanuele Severino [Conceptual premises of “The Original Structure” of Emanuele Severino].

This paper focuses on the implicit conceptual premises of the
thought of E. Severino as it emerges from his work La Struttura
Originaria. These are found in the assumption of the ground as
determined by its attempted negation. The latter thus becomes
part of the ‘originary structure’ which represents the essence of the
ground. In this way, the ground ceases to stay as a unilateral
conditioning from the ground to the grounded and is reduced to
the circle of the presupposition which binds the former to the latter. 

Abstract:
On the Consistency of Bootstrap Testing for a Parameter on the Boundary of the Parameter Space.

Copyright © 2016 John Wiley. &. Sons Ltd it is well known that with a parameter on the boundary of the parameter space, such as in the classic cases of testing for a zero location parameter or no autoregressive conditional heteroskedasticity (ARCH) effects, the classic nonparametric bootstrap – based on unrestricted parameter estimates – leads to inconsistent testing. In contrast, we show here that for the two aforementioned cases, a nonparametric bootstrap test based on parameter estimates obtained under the null – referred to as ‘restricted bootstrap’ – is indeed consistent. While the restricted bootstrap is simple to implement in practice, novel theoretical arguments are required in order to establish consistency. In particular, since the bootstrap is analysed both under the null hypothesis and under the alternative, non-standard asymptotic expansions are required to deal with parameters on the boundary. Detailed proofs of the asymptotic validity of the restricted bootstrap are given and, for the leading case of testing for no ARCH, a Monte Carlo study demonstrates that the bootstrap quasi-likelihood ratio statistic performs extremely well in terms of empirical size and power for even remarkably small samples, outperforming the standard and bootstrap Lagrange multiplier tests as well as the asymptotic quasi-likelihood ratio test. 

Abstract:
Promises and lies: can observers detect deception in written messages.

© 2016, the Author(s). We design a laboratory experiment to examine predictions of trustworthiness in a novel three-person trust game. We investigate whether and why observers of the game can predict the trustworthiness of hand-written communications. Observers report their perception of the trustworthiness of messages, and make predictions about the senders’ behavior. Using observers’ decisions, we are able to classify messages as “promises” or “empty talk.” Drawing from substantial previous research, we hypothesize that certain factors influence whether a sender is likely to honor a message and/or whether an observer perceives the message as likely to behonored: the mention of money; the use of encompassing words; and message length. We find that observers have more trust in longer messages and “promises”; promises that mention money are significantly more likely to be broken; and observers trust equally in promises that do and do not mention money. Overall, observers perform slightly better than chance at predicting whether a message will be honored. We attribute this result to observers’ ability to distinguish promises from empty talk, and to trust promises more than empty talk. However, within each of these two categories, observers are unable to discern between messages that senders will honor from those that they will not. 

Abstract:
Protection in Government Procurement Auctions.

Discrimination against foreign bidders in procurement auctions has typically been achieved by price preferences. We demonstrate that in the bidding game, each level of protection via a price preference can be achieved by an equivalent tariff. When government welfare depends only on net expenditures, this equivalence carries over to the government's decision. As such, this equivalence provides a justification that agreements to eliminate price preferences to be taken in tandem with agreements to lower tariffs; e.g. the Government Procurement Agreement (GPA) in the broader context of the WTO. 

Abstract:
River water quality: who cares, how much and why?.

© 2017 by the authors. Licensee MDPI, Basel, Switzerland. An important motivation for the implementation of the Water Framework Directive is the creation of non-market environmental benefits, such as improved ecological quality, or greater opportunities for open-access river recreation via microbial pollution remediation. Pollution sources impacting on ecological or recreational water quality may be uncorrelated, but non-market benefits arising from riverine improvements are typically conflated within benefit valuation studies. Using stated preference choice experiments embedded within a survey that also collected respondents' socio-economic characteristics, we aimed to disaggregate these sources of value for different river users, thereby allowing decision makers to understand the consequences of adopting alternative investment strategies. Our results suggested that anglers derived greater value from improvements to the ecological quality of river water, in contrast to swimmers and rowers, for whom greater value is gained from improvements to recreational quality. More generally, we found three distinct groups of respondents: a majority preferring ecological over recreational improvements, a substantial minority holding opposing preference orderings, and a yet smaller proportion expressing relatively low values for either form of river quality enhancement. As such, this research demonstrates that the non-market benefits that may accrue from different types of water quality improvements are nuanced in terms of their potential beneficiaries and, by inference, their overall value and policy implications. 

Abstract:
Sustainability in Turbulent Times: Lessons from the Nexus Network for supporting transdisciplinary research.

Cairns, R. Wilsdon, J. O’Donovan, C. Arora, S. Bateman, I.J. Charman, D. Cranston, G. Mehta, L. Pharoah, J. Reynolds, J. Stirling, A. Tranter, H. and Welters, R. (2017). Sustainability in Turbulent Times: Lessons from the Nexus Network for supporting transdisciplinary research. The Nexus Network, available at www.thenexusnetwork.org 

Abstract:
The potential benefits of on-farm mitigation scenarios for reducing multiple pollutant loadings in prioritised agri-environment areas across England.

© 2017 the AuthorsMitigation of diffuse water pollution from agriculture is a key national environmental policy objective in England. With the recent introduction of the new agri-environment scheme, Countryside Stewardship, there is an increased emphasis on the macro-spatial targeting of on-farm mitigation measures to reduce pollutant pressures, and a concomitant need to forecast the technically feasible impacts of on-farm measures detailed in current policy and their associated costs and benefits. This paper reports the results of a modelling application to test these limits in the context of the associated costs and benefits for the reduction of diffuse water pollution from agriculture for each Water Framework Directive (WFD) water management catchment (WMC) and nationally. Four mitigation scenarios were modelled, including pollutant source control measures only (SC), mobilisation control measures only (MC), delivery control measures only (DC) and measures for source, mobilisation and delivery control (SMDC) combined. Projected impacts on nitrate, phosphorus and sediment export to water, ammonia, methane and nitrous oxide emissions to the atmosphere, together with the associated costs to the agricultural sector were estimated for each WFD WMC and nationally. Median WMC-scale reductions (with uncertainty ranges represented by 5th–95th percentiles) in current agricultural emissions, were predicted to be highest for the SMDC scenario; nitrate (18%, 11–23%), phosphorus (28%, 22–37%), sediment (25%, 18–43%), ammonia (26%, 17–32%), methane (13%, 7–18%) and nitrous oxide (18%, 16–20%). The median benefit-to-cost ratios (with uncertainty ranges represented by 5th–95th percentiles) were predicted to be in the following order; DC (0.15, 0.09–0.65), MC (0.19, 0.09–0.95), SMDC (0.31, 0.20–1.39) and SC (0.44, 0.19–2.48). of the four scenarios simulated, the SC and SMDC suites of measures have the greatest potential to deliver reductions in BAU emissions from agriculture, and the best benefit:cost ratio. 

Abstract:
Beauty, body size and wages: Evidence from a unique data set.

We analyze how attractiveness rated at the start of the interview in the German General Social Survey is related to weight, height, and body mass index (BMI), separately by gender and accounting for interviewers' characteristics or fixed effects. We show that height, weight, and BMI all strongly contribute to male and female attractiveness when attractiveness is rated by opposite-sex interviewers, and that anthropometric characteristics are irrelevant to male interviewers when assessing male attractiveness. We also estimate whether, controlling for beauty, body size measures are related to hourly wages. We find that anthropometric attributes play a significant role in wage regressions in addition to attractiveness, showing that body size cannot be dismissed as a simple component of beauty. Our findings are robust to controlling for health status and accounting for selection into working. 

Abstract:
Beware of popular kids bearing gifts: a framed field experiment.

© 2016 Elsevier B.V. The literature on pro-social behavior shows that older children are more generous than younger children; however, the level of individual generosity is heterogeneous even between children of the same age. This paper investigates whether a child's popularity affects his/her generosity. Our participants – 231 children, six to twelve years old – decide how many of their four colored wristbands they want to share with another anonymous child. We manipulate the visibility of this decision: in treatment Public, the decisions are revealed to the entire class at the end of the game, whereas in treatment Private children's decisions remain secret. In addition, we elicited each child's network of friends using an innovative “seating map” mechanism. Our results reveal that more popular children are more generous in Public than Private decision environments, while less popular children behave similarly in both cases. Moreover, older children in Public display greater generosity than (i) older children in Private and (ii) younger children in either Public or Private. Finally, in Public, older and more popular children share more than less popular older children, and more than younger children regardless of popularity; whereas, in Private there is no effect of popularity on children of any age. Our findings point to another reason to adopt transparent decision making in teams and organizations: it may promote the generosity of some (perhaps especially popular leaders) without detrimentally impacting the pro-sociality of others. 

Abstract:
Does poverty alleviation decrease depression symptoms in post-conflict settings? a cluster-randomized trial of microenterprise assistance in Northern Uganda.

Background.By 2009, two decades of war and widespread displacement left the majority of the population of Northern Uganda impoverished.Methods.This study used a cluster-randomized design to test the hypothesis that a poverty alleviation program would improve economic security and reduce symptoms of depression in a sample of mostly young women. Roughly 120 villages in Northern Uganda were invited to participate. Community committees were asked to identify the most vulnerable women (and some men) to participate. The implementing agency screened all proposed participants, and a total of 1800 were enrolled. Following a baseline survey, villages were randomized to a treatment or wait-list control group. Participants in treatment villages received training, start-up capital, and follow-up support. Participants, implementers, and data collectors were not blinded to treatment status.Results.Villages were randomized to the treatment group (60 villages with 896 participants) or the wait-list control group (60 villages with 904 participants) with an allocation ration of 1:1. All clusters participated in the intervention and were included in the analysis. The intent-to-treat analysis included 860 treatment participants and 866 control participants (4.1% attrition). Sixteen months after the program, monthly cash earnings doubled from UGX 22 523 to 51 124, non-household and non-farm businesses doubled, and cash savings roughly quadrupled. There was no measurable effect on a locally derived measure of symptoms of depression.Conclusions.Despite finding large increases in business, income, and savings among the treatment group, we do not find support for an indirect effect of poverty alleviation on symptoms of depression. 

Abstract:
Food security, welfare, and partial de-regulation of parastatals.

Complete de-regulation of parastatals is often advocated as a desirable reform, although it is usually opposed by vested interests and by those who perceive that the de-regulated market can be dominated by a small number of private firms. In practice, however, reform and de-regulation of parastatals is typically partial in nature. We specify a model that allows us to consider the effects of partial reform and partial de-regulation on various metrics of food security. We show that how these metrics change depends on the market structure that defines the starting point as well as the market structure that emerges after de-regulation. In this second-best world, partial de-regulation does not necessarily enhance food security and we identify the determinants of that outcome. The assessment of the desirability of de-regulation is also contingent on the food security metric used. 

Abstract:
Mind-Body Problem : dalla critica al monismo ad una possibile soluzione linguistica. [Mind-Body Problem: from the critique of monism to a possible linguistic solution].

The debate on «monism and dualism» plays a crucial role in Philosophy of Mind. In this article, we advance some criticisms to the «materialistic monism» conception, starting from «identitist theories», which identify mind with brain, but not the vice versa. After showing that it is impossible to think the concept of identity as if it could stand independently from the concept of relation, which cannot be thought of as medium between extremes but as the act of their self-referring, we clarify the nature of mind and brain: they are not res, but signs or, more precisely, linguistic universes. In this way, the problem of their relationship becomes the problem of the translation of the language of the one into the language of the other, and vice versa. 

Abstract:
Modeling corporate defaults: Poisson autoregressions with exogenous covariates (PARX).

© 2016 Elsevier B.V. We develop a class of Poisson autoregressive models with exogenous covariates (PARX) that can be used to model and forecast time series of counts. We establish the time series properties of the models, including conditions for stationarity and existence of moments. These results are in turn used in the analysis of the asymptotic properties of the maximum-likelihood estimators of the models. The PARX class of models is used to analyze the time series properties of monthly corporate defaults in the US in the period 1982–2011 using financial and economic variables as exogenous covariates. Results show that our model is able to capture the time series dynamics of corporate defaults well, including the well-known default counts clustering found in data. Moreover, we find that while in general current defaults do indeed affect the probability of other firms defaulting in the future, in recent years economic and financial factors at the macro level are capable to explain a large portion of the correlation of US firm defaults over time. 

Abstract:
Spatially explicit integrated modeling and economic valuation of climate driven land use change and its indirect effects.

We present an integrated model of the direct consequences of climate change on land use, and the indirect effects of induced land use change upon the natural environment. The model predicts climate-driven shifts in the profitability of alternative uses of agricultural land. Both the direct impact of climate change and the induced shift in land use patterns will cause secondary effects on the water environment, for which agriculture is the major source of diffuse pollution. We model the impact of changes in such pollution on riverine ecosystems showing that these will be spatially heterogeneous. Moreover, we consider further knock-on effects upon the recreational benefits derived from water environments, which we assess using revealed preference methods. This analysis permits a multi-layered examination of the economic consequences of climate change, assessing the sequence of impacts from climate change through farm gross margins, land use, water quality and recreation, both at the individual and catchment scale.  

Abstract:
Strict stationarity, persistence and volatility forecasting in ARCH(∞) processes.

© 2015 Elsevier B.V. This paper derives a simple sufficient condition for strict stationarity in the ARCH(∞) class of processes with conditional heteroscedasticity. The concept of persistence in these processes is explored, and is the subject of a set of simulations showing how persistence depends on both the pattern of lag coefficients of the ARCH model and the distribution of the driving shocks. The results are used to argue that an alternative to the usual method of ARCH/GARCH volatility forecasting should be considered. 

Abstract:
Tackling agricultural diffuse pollution: What might uptake of farmer-preferred measures deliver for emissions to water and air?.

© 2015 Elsevier B.V. Mitigation of agricultural diffuse pollution poses a significant policy challenge across Europe and particularly in the UK. Existing combined regulatory and voluntary approaches applied in the UK continue to fail to deliver the necessary environmental outcomes for a variety of reasons including failure to achieve high adoption rates. It is therefore logical to identify specific on-farm mitigation measures towards which farmers express positive attitudes for higher future uptake rates. Accordingly, a farmer attitudinal survey was undertaken during phase one of the Demonstration Test Catchment programme in England to understand those measures towards which surveyed farmers are most receptive to increasing implementation in the future. A total of 29 on-farm measures were shortlisted by this baseline farm survey. This shortlist comprised many low cost or cost-neutral measures suggesting that costs continue to represent a principal selection criterion for many farmers. The 29 measures were mapped onto relevant major farm types and input, assuming 95% uptake, to a national scale multi-pollutant modelling framework to predict the technically feasible impact on annual agricultural emissions to water and air, relative to business as usual. Simulated median emission reductions, relative to current practise, for water management catchments across England and Wales, were estimated to be in the order sediment (20%)>ammonia (16%)>total phosphorus (15%)>nitrate/methane (11%)>nitrous oxide (7%). The corresponding median annual total cost of the modelled scenario to farmers was £3 ha-1yr-1, with a corresponding range of -£84ha-1yr-1 (i.e. a net saving) to £33ha-1yr-1. The results suggest that those mitigation measures which surveyed farmers are most inclined to implement in the future would improve the environmental performance of agriculture in England and Wales at minimum to low cost per hectare. 

Abstract:
The effects of induced emotions on pro-social behaviour.

© 2016 Elsevier B.V. Emotions are commonly experienced and expressed in human societies; however, their consequences on economic behaviour have received only limited attention. This paper investigates the effects of induced positive and negative emotions on cooperation and sanctioning behaviour in a one-shot voluntary contributions mechanism game, where personal and social interests are at odds. We concentrate on two specific emotions: anger and happiness. Our findings provide clear evidence that measures of social preferences are sensitive to subjects' current emotional states. Specifically, angry subjects contribute, on average, less than happy subjects and overall welfare as measured by average net earnings is lower when subjects are in an angry mood. We also find that how punishment is used is affected by moods: angry subjects punish harsher than happy subjects, ceteris paribus. These findings suggest that anger, when induced, can have a negative impact on economic behaviour. 

Abstract:
Time series modeling of paleoclimate data.

© 2016 John Wiley. &. Sons, Ltd. This paper applies time series modeling methods to paleoclimate series for temperature, ice volume, and atmospheric concentrations of CO2 and CH4. These series, inferred from Antarctic ice and ocean cores, are well known to move together in the transitions between glacial and interglacial periods, but the dynamic relationship between the series is open to question. A further unresolved issue is the role of Milankovitch theory, in which the glacial/interglacial cycles are correlated with orbital variations. We perform tests for Granger causality in the context of a vector autoregression model. Previous work with climate series has assumed nonstationarity and adopted a cointegration approach, but in a range of tests, we find no evidence of integrated behavior. We use conventional autoregressive methodology while allowing for conditional heteroscedasticity in the residuals, associated with the transitional periods. 

Abstract:
A Simple Bargaining Mechanism that Elicits Truthful Reservation Prices.

© 2014, Springer Science+Business Media Dordrecht. We describe a simple 2-stage mechanism whereby for two bargainers, a Buyer and a Seller, it is a weakly dominant strategy to report their true reservation prices in the 1st stage. If the Buyer reports a higher reservation price than the Seller, then the referee announces that there is a possibility for trade, and the bargainers proceed to make offers in a 2nd stage. The average of the 2nd-stage offers becomes the settlement if they both fall into the interval between the reported reservation prices; if only one offer falls into this interval, it is the settlement, but it is implemented with probability $$\frac{1}{2}$$12; if neither offer falls into the interval, there is no settlement. Comparisons are made with other bargaining mechanisms. 

Abstract:
A test of the long memory hypothesis based on self-similarity.

This paper develops a new test of true versus spurious long memory, based on log-periodogram estimation of the long memory parameter using skip-sampled data. A correction factor is derived to overcome the bias in this estimator due to aliasing. The procedure is designed to be used in the context of a conventional test of significance of the long memory parameter, and a composite test procedure is described that has the properties of known asymptotic size and consistency. The test is implemented using the bootstrap, with the distribution under the null hypothesis being approximated using a dependent-sample bootstrap technique to approximate short-run dependence following fractional differencing. The properties of the test are investigated in a set of Monte Carlo experiments. The procedure is illustrated by applications to exchange rate volatility and dividend growth series. 

Abstract:
Advances in Auctions.

© 2015 Elsevier B.V. As a selling mechanism, auctions have acquired a central position in the free market economy all over the globe. This development has deepened, broadened, and expanded the theory of auctions in new directions. This chapter is intended as a selective update of some of the developments and applications of auction theory in the two decades since Wilson (1992) wrote the previous Handbook chapter on this topic. 

Abstract:
An experiment on case-based decision making.

© 2015, Springer Science+Business Media New York. We experimentally investigate the disposition of decision makers to use case-based reasoning as suggested by Hume (An enquiry concerning human understanding, 1748) and formalized by case-based decision theory (Gilboa and Schmeidler in Q J Econ 110:605–639, 1995). Our subjects face a monopoly decision problem about which they have very limited information. Information is presented in a manner which makes similarity judgements according to the feature matching model of Tversky (Psychol Rev 84:327–352, 1977) plausible. We provide subjects a “history” of cases. In the $$2\times 2$$2×2 between-subject design, we vary whether information about the current market is given and whether immediate feedback about obtained profits is provided. The results provide support for the predictions of case-based decision theory, particularly when no immediate feedback is provided. 

Abstract:
Communication of uncertainty in temperature forecasts.

© 2015 American Meteorological Society. Experimental economics is used to test whether undergraduate students presented with a temperature forecast with uncertainty information in a table and bar graph format were able to use the extra information to interpret a given forecast. Participants were asked to choose the most probable temperature-based outcome between a set of "lotteries." Both formats with uncertainty information were found on average to significantly increase the probability of choosing the correct outcome. However, in some cases providing uncertainty information was damaging. Factors that influence understanding are statistically determined. Furthermore, participants who were shown the graph with uncertainty information took on average less response time compared to those who were shown a table with uncertainty information. Over time, participants improve in speed and initially improve in accuracy of choosing the correct outcome. 

Abstract:
Conserving tropical biodiversity via market forces and spatial targeting.

The recent report from the Secretariat of the Convention on Biological Diversity [(2010) Global Biodiversity Outlook 3] acknowledges that ongoing biodiversity loss necessitates swift, radical action. Protecting undisturbed lands, although vital, is clearly insufficient, and the key role of unprotected, private land owned is being increasingly recognized. Seeking to avoid common assumptions of a social planner backed by government interventions, the present work focuses on the incentives of the individual landowner. We use detailed data to show that successful conservation on private land depends on three factors: conservation effectiveness (impact on target species), private costs (especially reductions in production), and private benefits (the extent to which conservation activities provide compensation, for example, by enhancing the value of remaining production). By examining the high-profile issue of palm-oil production in a major tropical biodiversity hotspot, we show that the levels of both conservation effectiveness and private costs are inherently spatial; varying the location of conservation activities can radically change both their effectiveness and private cost implications. We also use an economic choice experiment to show that consumers' willingness to pay for conservation-grade palm-oil products has the potential to incentivize private producers sufficiently to engage in conservation activities, supporting vulnerable International Union for Conservation of Nature Red Listed species. However, these incentives vary according to the scale and efficiency of production and the extent to which conservation is targeted to optimize its cost-effectiveness. Our integrated, interdisciplinary approach shows how strategies to harness the power of the market can usefully complement existing—and to-date insufficient—approaches to conservation. 

Abstract:
Lag Length Selection for Unit Root Tests in the Presence of Nonstationary Volatility.

© 2015, Copyright Taylor. &. Francis Group, LLC. A number of recent papers have focused on the problem of testing for a unit root in the case where the driving shocks may be unconditionally heteroskedastic. These papers have, however, taken the lag length in the unit root test regression to be a deterministic function of the sample size, rather than data-determined, the latter being standard empirical practice. We investigate the finite sample impact of unconditional heteroskedasticity on conventional data-dependent lag selection methods in augmented Dickey–Fuller type regressions and propose new lag selection criteria which allow for unconditional heteroskedasticity. Standard lag selection methods are shown to have a tendency to over-fit the lag order under heteroskedasticity, resulting in significant power losses in the (wild bootstrap implementation of the) augmented Dickey–Fuller tests under the alternative. The proposed new lag selection criteria are shown to avoid this problem yet deliver unit root tests with almost identical finite sample properties as the corresponding tests based on conventional lag selection when the shocks are homoskedastic. 

Abstract:
Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions.

This paper explores the role of tax instruments in affecting foreign direct investment (FDI), paying particular attention on their effect on two forms of FDI strategy, ‘horizontal’ and ‘vertical’. Applying a decomposition of FDI strategies to the universe of cross-border mergers (the dominant form of FDI) over the period 1999–2010, it emerges that taxes have a much more nuanced effect on FDI than frequently suggested; while corporate taxes affect FDI negatively, the tax elasticity varies depending on the FDI strategy (with vertical FDI being in general more responsive), the exact measure of taxation, and international tax considerations (double taxation, withholding taxes). Sales taxes also affect FDI, but only horizontally. 

Abstract:
Natural capital and ecosystem services informing decisions: from promise to practice.

The central challenge of the 21st century is to develop economic, social, and governance systems capable of ending poverty and achieving sustainable levels of population and consumption while securing the life-support systems underpinning current and future human well-being. Essential to meeting this challenge is the incorporation of natural capital and the ecosystem services it provides into decision-making. We explore progress and crucial gaps at this frontier, reflecting upon the 10 y since the Millennium Ecosystem Assessment. We focus on three key dimensions of progress and ongoing challenges: raising awareness of the interdependence of ecosystems and human well-being, advancing the fundamental interdisciplinary science of ecosystem services, and implementing this science in decisions to restore natural capital and use it sustainably. Awareness of human dependence on nature is at an all-time high, the science of ecosystem services is rapidly advancing, and talk of natural capital is now common from governments to corporate boardrooms. However, successful implementation is still in early stages. We explore why ecosystem service information has yet to fundamentally change decision-making and suggest a path forward that emphasizes: (i) developing solid evidence linking decisions to impacts on natural capital and ecosystem services, and then to human well-being; (ii) working closely with leaders in government, business, and civil society to develop the knowledge, tools, and practices necessary to integrate natural capital and ecosystem services into everyday decision-making; and (iii) reforming institutions to change policy and practices to better align private short-term goals with societal long-term goals. 

Abstract:
Property rights, governance, and economic development.

© 2015 John Wiley. &. Sons Ltd. In this review article we give an intuitive account of why good institutions in general, and secure property rights in particular, matter for economic growth and development. We also discuss implications for good governance, defined as the efficient provision of property rights and other aspects of governance. Finally, we briefly touch on political institutions that might be conducive to good governance and thus economic development. 

Abstract:
Scale economies and heterogeneity in business money demand: the Italian experience.

© 2012 Board of Trustees of the Bulletin of Economic Research and John Wiley. &. Sons Ltd. This paper investigates the demand for money by firms and the existence of economies of scale in the Italian manufacturing industry. We estimate a model for cash elaborated by Fujiki and Mulligan using a different estimation procedure from the previous literature. We then introduce an iterative procedure based on backward exclusion of firms from model estimation which points out the high heterogeneity of Italian companies in money demand. Our estimates show that the Italian manufacturing industry, considered as a whole, does not enjoy scale economies in money demand. However, our iterative procedure points out that the cause of this result has to be ascribed to small firms which are characterized by thin cash money holdings and a consequent very modest opportunity cost. 

Abstract:
Sharing ambiguous risks.

© 2014 Elsevier B.V. We analyse risk-sharing when individuals perceive ambiguity about future events. The main departure from previous work is that different individuals perceive ambiguity differently. We show that individuals fail to share risks for extreme events. This may provide an explanation why we do not observe individuals buying insurance for certain events like hurricanes or earthquakes and why many contracts contain an "act of God"clause, which allows non-performance if an unforeseen event occurs. 

Abstract:
Testing for Unit Roots Under Multiple Possible Trend Breaks and Non-Stationary Volatility Using Bootstrap Minimum Dickey-Fuller Statistics.

© 2015 Wiley Publishing Ltd. In a recent paper, Harvey et al. (2013) (HLT) propose a new unit root test that allows for the possibility of multiple breaks in trend. Their proposed test is based on the infimum of the sequence (across all candidate break points) of local GLS detrended augmented Dickey-Fuller-type statistics. HLT show that the power of their unit root test is robust to the magnitude of any trend breaks. In contrast, HLT show that the power of the only alternative available procedure of Carrion-i-Silvestre et al. (2009), which employs a pretest-based approach, can be very low indeed (even zero) for the magnitudes of trend breaks typically observed in practice. Both HLT and Carrion-i-Silvestre et al. (2009) base their approaches on the assumption of homoskedastic shocks. In this article, we analyse the impact of non-stationary volatility (for example, single and multiple abrupt variance breaks, smooth transition variance breaks and trending variances) on the tests proposed in HLT. We show that the limiting null distribution of the HLT unit root test statistic is not pivotal under non-stationary volatility. A solution to the problem, which does not require the practitioner to specify a parametric model for volatility, is provided using the wild bootstrap and is shown to perform well in practice. A number of different possible implementations of the bootstrap algorithm are discussed. 

Abstract:
The environmental impact of climate change adaptation on land use and water quality.

Encouraging adaptation is an essential aspect of the policy response to climate change. Adaptation seeks to reduce the harmful consequences and harness any beneficial opportunities arising from the changing climate. However, given that human activities are the main cause of environmental transformations worldwide, it follows that adaptation itself also has the potential to generate further pressures, creating new threats for both local and global ecosystems. From this perspective, policies designed to encourage adaptation may conflict with regulation aimed at preserving or enhancing environmental quality. This aspect of adaptation has received relatively little consideration in either policy design or academic debate. To highlight this issue, we analyse the trade-offs between two fundamental ecosystem services that will be impacted by climate change: provisioning services derived from agriculture and regulating services in the form of freshwater quality. Results indicate that climate adaptation in the farming sector will generate fundamental changes in river water quality. In some areas, policies that encourage adaptation are expected to be in conflict with existing regulations aimed at improving freshwater ecosystems. These findings illustrate the importance of anticipating the wider impacts of human adaptation to climate change when designing environmental policies. 

Abstract:
The optimal design of rewards in contests.

Using contests to generate innovation has been and is widely used. Such contests often involve offering a prize that depends upon the accomplishment (effort). Using an all-pay auction as a model of a contest, we determine the optimal reward for inducing innovation. In a symmetric environment, we find that the reward should be set to (Formula presented.) where c is the cost of producing an innovation of level x and (Formula presented.) is the weight attached by the designer to the sum of efforts. In an asymmetric environment with two firms, we find that it is optimal to set different rewards for each firm. There are cases where this can be replicated by a single reward that depends upon accomplishments of both contestants. 

Abstract:
Voting and the economic cycle.

© 2014, Springer Science+Business Media New York. Sophisticated voters assess incumbent competence by filtering out economic cycles (which they do not like) from trend growth (which they do). Naive voters on the other hand respond only to raw economic growth. This implies that voting in the aggregate should respond asymmetrically to the economic cycle. Upswings are rewarded by the naive, but punished by the sophisticated. Downswings are punished by all voters. Using an established dataset of over 400 general elections we find that the incumbent vote share (a) responds differently to trend growth than to the cycle, (b) does not respond significantly to positive variation in the economic cycle, and (c) responds significantly and negatively to negative realizations in the economic cycle. In contrast to standard formulations of the ‘grievance asymmetry’ this asymmetric vote response is found to be independent of trend growth. 

Abstract:
World Price Shocks, Income, and Democratization.

This paper shows how a world price shock can increase the likelihood that democratization must be used to resolve the threat of revolution. Initially, a ruling elite may be able to use trade policy to maintain political stability. But a world price shock can push the country into a situation where the elite face a commitment problem that only democratization can resolve. Because the world price shock may also reduce average incomes, the model provides a way to understand why the level of national income per capita and democracy may not be positively correlated. The model is also useful for understanding dictatorial regimes� rebuttal of World Bank calls to keep their export markets open in the face of the 2007-08 world food crisis. 

Abstract:
A fine is a more effective financial deterrent when framed retributively and extracted publicly.

Introducing monetary fines to decrease an undesired behavior can sometimes have the counterintuitive effect of increasing the prevalence of the behavior being targeted. Such findings raise important social psychological questions in relation to both the way in which financial penalties are framed and the social contexts in which they are administered. In a field experiment (Study 1), we informed participants who had signed up for an experiment that they would be fined if they arrived late. This fine was presented as either compensatory or retributive in nature and as being administered either privately or publicly. We then observed participants’ subsequent arrival time. In accordance with our hypotheses, participants’ punctuality was only improved (relative to a no-fine control) in response to retributive rather than compensatory fines and when told that fines would be administered publicly rather than privately. In Study 2 we used a scenario method to demonstrate that the greater efficacy of retributively framed fines can be attributed to their presence being less likely to undermine the perceived immorality of transgression than is the case for compensatory fines. We propose a material promotion-moral prevention (MPMP) theory to account for our findings and consider its practical implications for the use of financial disincentives to encourage cooperative behavior through public policy in domains such as climate change. 

Abstract:
Bootstrap Determination of the Co-Integration Rank in Heteroskedastic VAR Models.

In a recent paper Cavaliere et al. (2012) develop bootstrap implementations of the (pseudo-) likelihood ratio (PLR) co-integration rank test and associated sequential rank determination procedure of Johansen (1996). The bootstrap samples are constructed using the restricted parameter estimates of the underlying vector autoregressive (VAR) model which obtain under the reduced rank null hypothesis. They propose methods based on an independent and individual distributed (i.i.d.) bootstrap resampling scheme and establish the validity of their proposed bootstrap procedures in the context of a co-integrated VAR model with i.i.d. innovations. In this paper we investigate the properties of their bootstrap procedures, together with analogous procedures based on a wild bootstrap resampling scheme, when time-varying behavior is present in either the conditional or unconditional variance of the innovations. We show that the bootstrap PLR tests are asymptotically correctly sized and, moreover, that the probability that the associated bootstrap sequential procedures select a rank smaller than the true rank converges to zero. This result is shown to hold for both the i.i.d. and wild bootstrap variants under conditional heteroskedasticity but only for the latter under unconditional heteroskedasticity. Monte Carlo evidence is reported which suggests that the bootstrap approach of Cavaliere et al. (2012) significantly improves upon the finite sample performance of corresponding procedures based on either the asymptotic PLR test or an alternative bootstrap method (where the short run dynamics in the VAR model are estimated unrestrictedly) for a variety of conditionally and unconditionally heteroskedastic innovation processes. © 2014 Copyright Taylor and Francis Group, LLC. 

Abstract:
Coordinating climate and trade policies: Pareto efficiency and the role of border tax adjustments.

This paper explores the role of trade instruments in globally efficient climate policies, focusing on whether or not some form of border tax adjustment (BTA) is warranted when carbon prices differ internationally. The analysis shows that, while there is no case for BTA when all instruments can be freely deployed, Pareto-efficiency does require a form of BTA when carbon taxes in some countries are constrained: its purpose then is to partly counteract the impact on emissions of inappropriate carbon pricing there, or, equivalently, to undo the trade distortions such pricing creates. The required form of BTA is generally complex, but a special case is identified in which it optimally has the simple structure envisaged in practical policy discussions. It is also shown that the efficiency case for BTA depends critically on whether climate policies are pursued by carbon taxation or by cap-and-trade. 

Abstract:
Economic Analysis for the UK National Ecosystem Assessment: Synthesis and Scenario Valuation of Changes in Ecosystem Services.

We combine natural science modelling and valuation techniques to present economic analyses of a variety of land use change scenarios generated for the UK National Ecosystem Assessment. Specifically, the agricultural, greenhouse gas, recreational and urban greenspace impacts of the envisioned land use changes are valued. Particular attention is given to the incorporation of spatial variation in the natural environment and to addressing issues such as biodiversity impacts where reliable values are not available. Results show that the incorporation of ecosystem services and their values within analyses can substantially change decisions. © 2013 Springer Science+Business Media Dordrecht. 

Abstract:
Indirect tax harmonization and global public goods.

This paper identifies conditions under which, starting from any tax-distorting equilibrium, destination- and origin-based indirect tax-harmonizing reforms are potentially Pareto improving in the presence of global public goods. The first condition (unrequited transfers between governments) requires that transfers are designed in such a way that the marginal valuations of the global public goods are equalized, whereas the second (conditional revenue changes) requires that the change in global tax revenues, as a consequence of tax harmonization, is consistent with the under/over-provision of global public goods relative to the (modified) Samuelson rule. Under these conditions, tax harmonization results in redistributing the gains from a reduction in global deadweight loss and any changes in global tax revenues according to the Pareto principle. and this is the case independently of the tax principle in place (destination or origin). © 2012 Springer Science+Business Media, LLC. 

Abstract:
Monetary shocks, exchange rates, and the extensive margin of exports.

This paper develops a two-country Dynamic General Equilibrium model to assess the relationship between the real exchange rate and the extensive margin of exports. Exchange rate pass-through to consumer prices governs the relative strength of a demand channel onto the exporting decision of a firm. With incomplete pass-through, a favorable movement in the real exchange rate generates increased export participation and an expansion in the extensive margin of exports. This result is consistent with firm-level studies, and contributes to an ongoing empirical debate as to the importance of changes in export participation over the business cycle. © 2013 Elsevier Ltd. 

Abstract:
Optimism and pessimism in games.

This article considers the impact of ambiguity in strategic situations. It extends the existing literature on games with ambiguity-averse players by allowing for optimistic responses to ambiguity. We use the CEU model of ambiguity with a class of capacities introduced by Jaffrray and Philippe (Mathematics of Operations Research 22 (1997), 165-85), which allows us to distinguish ambiguity from ambiguity-attitude, and propose a new solution concept, equilibrium under ambiguity (EUA), for players who may be characterized by ambiguity-preference. Applying EUA, we study comparative statics of changes in ambiguity-attitude in games with strategic complements. This extends work in Eichberger and Kelsey (Journal of Economic Theory 106 (2002), 436-66) on the effects of increasing ambiguity if players are ambiguity averse. © (2014) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association. 

Abstract:
Retail price dynamics and retailer heterogeneity: UK evidence.

We examine retailer heterogeneity in price adjustment in UK supermarkets. Considerable variation in the price change frequency of identically bar-coded products among retail chains is found. Decomposition analysis suggests that price adjustment is evenly split between sales and reference prices with substantive variation across retailers. © 2014. 

Abstract:
Using revealed preferences to estimate the value of travel time to recreation sites.

The opportunity Value of Travel Time (VTT) is one of the most important elements of the total cost of recreation day-trips and arguably the most difficult to estimate. Most studies build upon the theoretical framework proposed by Becker (1965) by using a combination of revealed and stated preference data to estimate a value of time which is uniform in all activities and under all circumstances. This restriction is relaxed by DeSerpa's (1971) model which allows the value of saving time to be activity-specific. We present the first analysis which uses actual driving choices between open access and toll roads to estimate a VTT specific for recreation trips, thereby providing a value which conforms to both Becker's and DeSerpa's theoretical models. Using these findings we conduct a Monte Carlo simulation to identify generalizable results for subsequent valuation studies. Our results indicate that 3/4 of the wage rate provides a reasonable approximation of the average VTT for recreation trips, while the commonly implemented assumption of 1/3 of the wage rate generates downward biased results. © 2013 the Authors. 

Abstract:
Valuing Climate Change Effects Upon UK Agricultural GHG Emissions: Spatial Analysis of a Regulating Ecosystem Service.

This article provides estimates of the physical and economic value of changes in greenhouse gas (GHG) emissions projected to arise from climate change induced shifts in UK agricultural land use during the period 2004-2060. In physical terms, significant regional differences are predicted with the intensity of agricultural GHG emissions increasing in the upland north and western parts of the UK and decreasing in the lowland south and east of the country. Overall these imply relative modest increases in the physical quantity of emissions. However, rapid rises in the expected marginal value of such emissions translate these trends into major increases in their economic costs over the period considered. © 2013 European Union. 

Abstract:
Valuing Provisioning Ecosystem Services in Agriculture: the Impact of Climate Change on Food Production in the United Kingdom.

This paper provides an estimate of the contribution of the ecosystem to the provisioning services generated by agriculture. This is achieved by valuing the changes in productivity generated by a marginal alteration in ecosystem inputs. As an example, we consider the variation in rainfall and temperature projected by the recent UK Climate Impacts Programme. The analysis implements a spatially explicit, econometric model of agricultural land use based on the methodology recently developed by Fezzi and Bateman (Am J Agric Econ 93:1168-1188, 2011). Land use area and livestock stocking rates are then employed to calculate farm gross margin estimates of the value of changes in provisioning ecosystem services. Findings suggest that the variation in ecosystem inputs induced by climate change will have substantial influence on agricultural productivity. Interestingly, within the UK context climate change generates mainly positive effects, although losses are forecasted for those southern areas most vulnerable to heat-stress and drought. © 2013 Springer Science+Business Media Dordrecht. 

Abstract:
The natural capital approach to integrating science, economics and policy into decisions affecting the natural environment.

 

Abstract:
Transformative Pathways to Inclusive Green Development.

 

Abstract:
A meta-analysis of Wetland Contingent valuation studies.

 

Abstract:
Plato and Parmenides' Parricide: some Theoretical Reflections.

 

Abstract:
Tax and Welfare Reform in Greece.

 

Abstract:
The environmental impact of climate change adaptation on land use and water quality.

 

Abstract:
Valuing preferences for ecosystem related goods and services.

 

Abstract:
Ecosystem Services Assessment and Benefit Transfer.

 

Abstract:
Food inflation in the EU: contrasting experience and recent insights.

 

Abstract:
Investigating stock market behavior using a multivariate markov-switching approach.

 

Abstract:
The first UK National Ecosystem Assessment and beyond.

 

Abstract:
The first United Kingdom’s national ecosystem assessment and beyond.

 

Abstract:
The Contribution of Circular Economy to Human Betterment:. Moral Imagination and Teleological Ethics.

 

Abstract:
The role of humanities in economic education: the case of philosophy of economics.

 

Abstract:
Reciprocal determination and the unity of distinct determinations. in the Original Structure of Emanuele Severino.

 

Abstract:
The Fixed Volatility Bootstrap for a Class of Arch(q) Models.

 

Abstract:
Testing for unit roots in bounded time series.

 

Abstract:
State of Natural Capital Annual Report 2019: Sixth Report to the Economic Affairs Committee of the Cabinet, National Capital Committee.

 

Abstract:
Updating the Woodland Valuation Tool: a review of recent literature on the non-market values of woodlands.

 

Abstract:
Bringing Health and the Environment into Decision-Making: the Natural Capital Approach.

 

Abstract:
Valuing the social and environmental contribution of woodlands and trees in England, Scotland and Wales. Second edition: to 2018.