An Efficient Estimator for Dealing with Missing Data on Explanatory Variables in a Probit Choice Model

A common approach to dealing with missing data in econometrics is to estimate the model on the common subset of data, by necessity throwing away potentially useful data. In this paper we consider a particular pattern of missing data on explanatory variables that often occurs in practice and develop a new efficient estimator for models where the dependent variable is binary. We derive exact formulae for the estimator and its asymptotic variance. Simulation results show that our estimator performs well when compared to popular alternatives, such as complete case analysis and multiple imputation. We then use our estimator to examine the portfolio allocation decision of Italian households using the Survey of Household Income and Wealth carried out by the Bank of ItalyMissing Data, Probit Model, Portfolio Allocation, Risk Aversion

MAKE-OR-BUY’ IN INTERNATIONAL OLIGOPOLY AND THE ROLE OF COMPETITIVE PRESSURE

We study how competitive pressure influences the make-or-buy decision that oligopolistic firms face between producing an intermediate component in-house or purchasing it from a domestic supplier. We model outsourcing as a bilateral relationship in which the supplier undertakes relationship-specific investments. A home and foreign firm compete in the home market. Firms’ mode of operation decision depends on cost and strategic considerations. Competitive pressure increases firms’ incentive to outsource. Consumer gains from trade liberalisation are enhanced when it leads to less outsourcing.Outsourcing, Vertical Integration, Trade Liberalisation, Oligopoly

Efficient Estimation of the Non-linear Volatility and Growth Model

Econometrics, Macroeconomics, Growth, Volatility

Tax uniformity: A commitment device for restraining opportunistic behaviour.

We investigate whether and to what extent uniform and differentiated tax systems diverge in their propensity to create distortionary opportunistic behavoiur. The set-up in which we carry out our analysis features polluting firms that are confronted with existence a Pigovian emission tax. Firms can invest in pollution abatement. We first show that the existence of emmission taxes, although optimally chosen, create strategic incentives for firms to distort their abatement investment. Second, we find that a system of differentiated emission taxes has a greater propensity to foster strategic distortions in abatement investment than a uniform emission tax regime.Uniform tax, Differentiated taxes, Emission tax, Short-run policy commitment, Pollution-abating investment, Strategic investment.

The Impact of Monetary Policy Shocks on Stock Prices: Evidence from Canada and the United States

monetary policy shocks; stock prices; open economy; structural vector autoregressive model

Optimal Initial Public O¤ering design with aftermarket trading.

We characterize the optimal pricing and allocation of shares in the presence of distinct adverse selection problems. Some investors have private information at the time of the IPO and sell their shares in the after-market upon facing liquidity needs. Others learn their private interest in the after-market, and sell their shares strategically. The optimal mechanism trades-o¤ informational rents and rents to strategic traders. Flipping facilitates truthful information revelation. When liquidity needs are likely, it is optimal to allocate all shares to investors informed at the IPO stage. Otherwise, some shares are allocated to those who trade strategically in the after-market.

Assessing Brand Image through Communalitites and Asymmetries Brand-to-Attribute and Attribute-to-Brand Associations.

Brand image is a key component of customer-based brand equity, and refers to the associations a consumer holds in memory. Such associations are often directional; one should distinguish between brand-to-attribute and attribute-to-brand associations. Information on these associations arise from two ways of collecting data respectively: brand-by-brand evaluations of all attributes and attribute-by-attribute evaluations of all brands. In this paper, the authors present a methodological approach, namely correspondence analysis of matched matrices, to assess the communalitites as well as asymmetries between brand-to-attribute and attribute-to-brand associations. The methodology results in perceptual maps visualizing brand image. The approach is illustrated in an empirical market research project in which two samples of consumers evaluated ten brands of deodorants and eleven attributes.

PICES Press, Vol. 13, No. 1, January 2005

The state of PICES science - 2004 (pdf 0.7 MB) 2004 Wooster Award (pdf 0.2 MB) Micronekton – What are they and why are they important? (pdf 0.5 MB) Upscaling for a better understanding of climate links to ecosystems (pdf 0.1 MB) PICES Interns (pdf 0.1 MB) Report of the APN workshop on “Climate interactions and marine ecosystems” (pdf 0.6 MB) Photo highlights of PICES XIII (pdf 0.3 MB) Recent trends in waters of the subarctic NE Pacific – summer 2004 (pdf 0.1 MB) The state of the western North Pacific in the first half of 2004 (pdf 0.3 MB) The Bering Sea: Current status and recent events (pdf 0.1 MB) Study Group on Fisheries Ecosystem Responses to Recent Regime Shifts completes its mandate for the provision of scientific advice (pdf 0.1 MB) PICES Calendar (pdf 0.1 MB) The new PICES Working Group on Ecosystem-based management (pdf 0.05 MB) CO2 data integration activity for the North Pacific (pdf 0.2 MB) Carbon cycle changes in the North Pacific (pdf 0.8 MB) New and upcoming PICES publications (pdf 0.8 MB

The U.S. and Irish Credit Crises: Their Distinctive Differences and Common Features

Abstract: Although the US credit crisis precipitated it, the Irish credit crisis is an identifiably separate one, which might have occurred in the absence of the U.S. crash. The distinctive differences between them are notable. Almost all the apparent causal factors of the U.S. crisis are missing in the Irish case; and the same applies vice-versa. At a deeper level, we identify four common features of the two credit crises: capital bonanzas, irrational exuberance, regulatory imprudence, and moral hazard. The particular manifestations of these four “deep” common features are quite different in the two cases.

OLIGOPOLY AND TRADE

In this chapter we present a selective analytic survey of some of the main results of trade under oligopoly. We concentrate on three topics: oligopoly as an independent determinant of trade, as illustrated by the reciprocal-markets model of Brander (1981); oligopoly as an independent rationale for government intervention, as illustrated by strategic trade and industrial policy in the third-market model of Spencer and Brander (1983); and the challenges and potential of embedding trade under oligopoly in general equilibrium as illustrated by the GOLE model of Neary (2002).GOLE (General Oligopolistic Equilibrium); reciprocal dumping; strategic trade policy.