Long-Term Load Forecasting Considering Volatility Using Multiplicative Error Model

Long-term load forecasting plays a vital role for utilities and planners in terms of grid development and expansion planning. An overestimate of long-term electricity load will result in substantial wasted investment in the construction of excess power facilities, while an underestimate of future load will result in insufficient generation and unmet demand. This paper presents first-of-its-kind approach to use multiplicative error model (MEM) in forecasting load for long-term horizon. MEM originates from the structure of autoregressive conditional heteroscedasticity (ARCH) model where conditional variance is dynamically parameterized and it multiplicatively interacts with an innovation term of time-series. Historical load data, accessed from a U.S. regional transmission operator, and recession data for years 1993-2016 is used in this study. The superiority of considering volatility is proven by out-of-sample forecast results as well as directional accuracy during the great economic recession of 2008. To incorporate future volatility, backtesting of MEM model is performed. Two performance indicators used to assess the proposed model are mean absolute percentage error (for both in-sample model fit and out-of-sample forecasts) and directional accuracy.Comment: 19 pages, 11 figures, 3 table

Complementarity analysis of the Priority Areas Development Program and the Priority Attention Areas Program in the National Crusade Against Hunger Program in indigenous municipalities in the State of Veracruz Mexico

Mexico, with the commissioning of the "National Crusade Against Hunger Program" in 2013, aimed at serving the population that presents both extreme poverty and food deprivation. The article aims to analyze whether the criterion of the selection of the municipalities of the State of Veracruz incorporated in the National Crusade Against Hunger Program (PNCH) show complementarity with the efforts in the fight against poverty in the social expenditure strategy applied in the Priority Attention Zones Program (ZAP) and the Priority Areas Development Program (PDZP) and, particularly, the indigenous municipalities that have a greater degree of social exclusion. The adjustment of a binary logistic regression model is presented, in order to assess the incidence of contextual factors to interpret the scope of the strategy adopted by the federal government in the fight against poverty and hunger. As a result, it is evident that there is no continuity in the fight against poverty, since the municipalities included in the strategy Priority Areas of Attention and Program of Development of Priority Zones are not considered in the selection of municipalities incorporated in the National Program of Crusade Against Hunger, a situation that identifies the relationship between programs is not complementary

Does Social Security Affect Retirement and Labor Supply? Using the Chilean Experience as an Experiment

The paper explores the effects of the social security system over retirement and labor supply decision of individuals aged 55 to 65 in Chile. We use the 1998 CASEN survey elaborated by the Chilean government. Due to regulations established by the current social security law, two social security systems coexist on 1998: the .Pay-as-you-go. and the individual account system. This property of the dataset, allows us to disentangle the effects of those two systems over retirement and labor supply. The results show that social security may significantly affect retirement and labor supply decisions. The effects are mainly twofold. First, larger benefits may induce earlier retirement and lower labor supply and second, larger variance of benefits may induce later retirement and larger labor supply, due to a precautionary motive. This last effect seems to be important when analyzing the path of the Chilean retirement rates on the nineties.

Ceaseless Toil? Health and Labor Supply of the Elderly in Rural China

Deborah Davis-Friedmann (1991) described the “retirement” pattern of the Chinese elderly in the prereform era as “ceaseless toil”: lacking sufficient means of support, the elderly had to work their entire lives. In this paper we re-cast the metaphor of ceaseless toil in a labor supply model, where we highlight the role of age and deteriorating health. The empirical focus of our paper is (1) Documenting the labor supply patterns of elderly Chinese; and (2) Estimating the extent to which failing health drives retirement. We exploit the panel dimension of the 1991-93-97 waves of the China Health and Nutrition Survey, confronting a number of econometric issues, especially the possible contamination of age by cohort effects, and the measurement error of health. In the end, it appears that “ceaseless toil” is also an accurate depiction of elderly Chinese work patterns since economic reform, but failing health only plays a small observable role in explaining declining labor supply over the life-cycle.http://deepblue.lib.umich.edu/bitstream/2027.42/39965/3/wp579.pd

Patterns of welfare state indicators in the EU: Is there convergence?

Convergence of social protection objectives and policies in member states is an explicit objective of the EU. Earlier research has shown that there has indeed been a tendency of convergence of social protection levels over the last decades. However, comparative studies of welfare states frequently use indicators which may not be representative as measures of the level or generosity of benefits in different countries. In this paper we have done several σ- and β-convergence tests with the most recent data, using a variety of indicators of social protection: social expenditures, both at the macro and at the program level, replacement rates of unemployment benefits and social assistance benefits and poverty indicators. Together, these indicators provide a more broad picture of the evolution of social protection. Our results are less clear cut than earlier findings. We still find a quite strong convergence of social expenditure in EU-countries over a longer period. However, this trend seems to have stagnated in recent years. The evidence is mixed for the other indicators. Replacement rates of unemployment benefits clearly converged to a higher level, but social assistance benefits and poverty rates do not show a trend of convergence.welfare states, convergence, Europeanization, social indicators

Is There an Endogenous Problem if Sustainability on the Pay-as-you-go Social Security System? Using the Chilean Experience as an Experiment

The paper provides empirical evidence about the effects of the "pay-as-you-go" and the individual account social security systems over the family choice variables such as fertility rate, schooling, and time spent on children and it links those effects with the sustainability of the fiscal budget on the "pay-as-you-go"system. The paper uses the 1998 CASEN database from Chile. On the database, the "pay-as-you-go" and the individual account systems coexist for individuals 35 years and older as result of the regulations established by the 1981 social security reform law. The results show that the numbers of children per family and female labor supply are depressed by increases on the "pay-as-you-go" payroll tax rate. Those effects produce an endogenous sustainability problem over the fiscal budget, as the number of individuals paying taxes and the amount of taxes paid by females decrease endogenously over time. The individual system does not show effect at all over the family decision choice analyzed.