Consumption and habits : evidence from panel data

The purpose of this paper is to test for the presence of habit formation in consumption decisions using household panel data. We use the test proposed by Meghir and Weber (1996) and estimate the within -period marginal rate of substitution between commodities, which is robust to the presence of liquidity constraints. To that end, we use a Spanish panel data set in which households are observed up to eight consecutive quarters. This temporal dimension is crucial, since it allows us to take into account time invariant unobserved heterogeneity across households ("fixed effects") and, therefore, to investigate if the relationship between current and past consumption reflects habits or heterogeneity. Our results conf irm the importance of accounting for fixed effects when analyzing intertemporal consumption decisions allowing for time non-separabilities. Once fixed effects are controlled for and a proper set of instruments is used, the results yield supporting evidence of habit formation in the demand system of food at home, transport and services

Key issues on partial least squares (PLS) in operations management research: A guide to submissions

Purpose: This work aims to systematise the use of PLS as an analysis tool via a usage guide or recommendation for researchers to help them eliminate errors when using this tool. Design/methodology/approach: A recent literature review about PLS and discussion with experts in the methodology. Findings: This article considers the current situation of PLS after intense academic debate in recent years, and summarises recommendations to properly conduct and report a research work that uses this methodology in its analyses. We particularly focus on how to: choose the construct type; choose the estimation technique (PLS or CB-SEM); evaluate and report the measurement model; evaluate and report the structural model; analyse statistical power. Research limitations: It was impossible to cover some relevant aspects in considerable detail herein: presenting a guided example that respects all the report recommendations presented herein to act as a practical guide for authors; does the specification or evaluation of the measurement model differ when it deals with first-order or second-order constructs?; how are the outcomes of the constructs interpreted with the indicators being measured with nominal measurement levels?; is the Confirmatory Composite Analysis approach compatible with recent proposals about the Confirmatory Tetrad Analysis (CTA)? These themes will the object of later publications. Originality/value: We provide a check list of the information elements that must contain any article using PLS. Our intention is for the article to act as a guide for the researchers and possible authors who send works to the JIEM (Journal of Industrial and Engineering Management). This guide could be used by both editors and reviewers of JIEM, or other journals in this area, to evaluate and reduce the risk of bias (Losilla, Oliveras, Marin-Garcia & Vives, 2018) in works using PLS as an analysis procedure

A new adaptive response surface method for reliability analysis

Response surface method is a convenient tool to assess reliability for a wide range of structural mechanical problems. More specifically, adaptive schemes which consist in iteratively refine the experimental design close to the limit state have received much attention. However, it is generally difficult to take into account a lot of variables and to well handle approximation error. The method, proposed in this paper, addresses these points using sparse response surface and a relevant criterion for results accuracy. For this purpose, a response surface is built from an initial Latin Hypercube Sampling (LHS) where the most significant terms are chosen from statistical criteria and cross-validation method. At each step, LHS is refined in a region of interest defined with respect to an importance level on probability density in the design point. Two convergence criteria are used in the procedure: The first one concerns localization of the region and the second one the response surface quality. Finally, a bootstrap method is used to determine the influence of the response error on the estimated probability of failure. This method is applied to several examples and results are discussed

Semiparametric Bayesian inference in multiple equation models

This paper outlines an approach to Bayesian semiparametric regression in multiple equation models which can be used to carry out inference in seemingly unrelated regressions or simultaneous equations models with nonparametric components. The approach treats the points on each nonparametric regression line as unknown parameters and uses a prior on the degree of smoothness of each line to ensure valid posterior inference despite the fact that the number of parameters is greater than the number of observations. We develop an empirical Bayesian approach that allows us to estimate the prior smoothing hyperparameters from the data. An advantage of our semiparametric model is that it is written as a seemingly unrelated regressions model with independent normal-Wishart prior. Since this model is a common one, textbook results for posterior inference, model comparison, prediction and posterior computation are immediately available. We use this model in an application involving a two-equation structural model drawn from the labour and returns to schooling literatures

UKERC Review of evidence for the rebound effect: Technical report 2: Econometric studies

This Working Paper examines the evidence for direct rebound effects that is available from studies that use econometric techniques to analyse secondary data. The focus throughout is on consumer energy services, since this is where the bulk of the evidence lies

Uncertainty Propagation and Feature Selection for Loss Estimation in Performance-based Earthquake Engineering

This report presents a new methodology, called moment matching, of propagating the uncertainties in estimating repair costs of a building due to future earthquake excitation, which is required, for example, when assessing a design in performance-based earthquake engineering. Besides excitation uncertainties, other uncertain model variables are considered, including uncertainties in the structural model parameters and in the capacity and repair costs of structural and non-structural components. Using the first few moments of these uncertain variables, moment matching requires only a few well-chosen point estimates to propagate the uncertainties to estimate the first few moments of the repair costs with high accuracy. Furthermore, the use of moment matching to estimate the exceedance probability of the repair costs is also addressed. These examples illustrate that the moment-matching approach is quite general; for example, it can be applied to any decision variable in performance-based earthquake engineering. Two buildings are chosen as illustrative examples to demonstrate the use of moment matching, a hypothetical three-story shear building and a real seven-story hotel building. For these two examples, the assembly-based vulnerability approach is employed when calculating repair costs. It is shown that the moment-matching technique is much more accurate than the well-known First-Order-Second-Moment approach when propagating the first two moments, while the resulting computational cost is of the same order. The repair-cost moments and exceedance probability estimated by the moment-matching technique are also compared with those by Monte Carlo simulation. It is concluded that as long as the order of the moment matching is sufficient, the comparison is satisfactory. Furthermore, the amount of computation for moment matching scales only linearly with the number of uncertain input variables. Last but not least, a procedure for feature selection is presented and illustrated for the second example. The conclusion is that the most important uncertain input variables among the many influencing the uncertainty in future repair costs are, in order of importance, ground-motion spectral acceleration, component capacity, ground-motion details and unit repair costs