Size, density and costs of network services - the case of the distribution of electricity in Italy

The classical approach to the effects of territorial context in defining costs of distibution in network services (as the distribution of electric energy), often makes confusion between scale and density economies The consequence is a wrong definition of some variables and a misleading specification of the model. The result is a heavy underestimationf ot the role of the territorial context in shaping the curve of the average spatial cost of distribution. Both Cobb-Douglas and Translog functions are used to estimate the role of territorial characteristics in defining costs. We find, for the Italian case, that the share of cost due to a "non optimal territorial context" is about 40% on average (with a maximum of 68% in low density and scattered areas). There is a trade off between a policy equalizing spatial prices and a choice of minimize costs in central areas.

The estimation of Human Capital in structural models with flexible specification

The present paper focuses on statistical models for estimating Human Capital (HC) at disaggregated level (worker, household, graduates). The more recent literature on HC as a latent variable states that HC can be reasonably considered a broader multi-dimensional non-observable construct, depending on several and interrelate causes, and indirectly measured by many observed indicators. In this perspective, latent variable models have been assuming a prominent role in the social science literature for the study of the interrelationships among phenomena. However, traditional estimation methods are prone to different limitations, as stringent distributional assumptions, improper solutions, and factor score indeterminacy for Covariance Structure Analysis and the lack of a global optimization procedure for the Partial Least Squares approach. To avoid these limitations, new approaches to structural equation modelling, based on Component Analysis, which estimates latent variables as exact linear combinations of observed variables minimizing a single criterion, were proposed in literature. However, these methods are limited to model particular types of relationship among sets of variables. In this paper, we propose a class of models in such a way that it enables to specify and fit a variety of relationships among latent variables and endogenous indicators. Specifically, we extend this new class of models to allow for covariate effects on the endogenous indicators. Finally, an application aimed to measure, in a realistic structural model, the causal impact of formal Human capital (HC), accumulated during Higher education, on the initial earnings for University of Milan (Italy) graduates is illustrated.

Development and economic growth: the effectiveness of traditional policies

The empirical evidence of low effectiveness for growth of investment in physical and human capital policies based on international aid is analyzed and discussed (§ 1 and 2). Reasons are linked both to limits of analytical and econometric methods (§ 4) and the existence of strong complementarities between different dimensions of macroeconomic, social and institutional context (§ 3). We critically discuss the new strategies proposed to gain effectiveness in development projects and policies.Aid Effectiveness, Growth Policies, Institutions, Development

Multidimensional economic well-being. Is it measurable? The case of Lombardy

The definition and measurement of economic well-being is receiving growing attention, both in academic research and policy agenda, as a key issue to provide a solid basis for decision-making at all levels, both national and local. There is general agreement among economists and policy-makers about the necessity to go beyond GDP but the convergence towards a new and wider definition and measurement is far from being reached. This is why research and experiments that try to test different definitions and indicators can help, through empirical results, to the ongoing debate. This paper attempts to measure the multidimensional well-being of the Italian Region Lombardy, for the years 1995-2005, along the lines of the Index of Economic Well-Being (IEWB) proposed by the Centre for the Study of Living Standards (Osberg, 1985; Osberg and Sharpe, 2002, 2005). The evolution of the index is aligned with that of per capita GDP from 1995 to 2001 but diverges in the following period because of the fall of regional per capita GDP and consumption in the period 2002-2005 and a contemporary strong growth of the health dimension and of the level of human capital stock (education).well-being, composite indicators, development

Size, density and costs of network services - the case of the distribution of electricity in Italy

The classical approach to the effects of territorial context in defining costs of distibution in network services (as the distribution of electric energy), often makes confusion between scale and density economies The consequence is a wrong definition of some variables and a misleading specification of the model. The result is a heavy underestimationf ot the role of the territorial context in shaping the curve of the average spatial cost of distribution. Both Cobb-Douglas and Translog functions are used to estimate the role of territorial characteristics in defining costs. We find, for the Italian case, that the share of cost due to a "non optimal territorial context" is about 40% on average (with a maximum of 68% in low density and scattered areas). There is a trade off between a policy equalizing spatial prices and a choice of minimize costs in central areas

HUMAN CAPITAL MEASUREMENT: A SURVEY

Abstract After a short history of the concept of human capital (henceforth HC) in economic thought (Section 1), this study presents the two main methods for estimating the value of the stock of HC – the retrospective and prospective one – with a review of the models proposed (Section 2). These methods are linked both to the theory of HC investment as a rational choice (Section 3), the literature analysing the contribution of HC investment to economic growth and the HC estimating method through educational attainment (Section 4). The more recent literature on HC as a latent variable is also assessed (Section 5) and a new method of estimation where HC is seen both as an unknown function of formative indicators and as a 'latent effect' underlying earned income is proposed (Section 6). Section 7 concludes

Multidimensional economic well-being. Is it measurable? The case of Lombardy

The definition and measurement of economic well-being is receiving growing attention, both in academic research and policy agenda, as a key issue to provide a solid basis for decision-making at all levels, both national and local. There is general agreement among economists and policy-makers about the necessity to go beyond GDP but the convergence towards a new and wider definition and measurement is far from being reached. This is why research and experiments that try to test different definitions and indicators can help, through empirical results, to the ongoing debate. This paper attempts to measure the multidimensional well-being of the Italian Region Lombardy, for the years 1995-2005, along the lines of the Index of Economic Well-Being (IEWB) proposed by the Centre for the Study of Living Standards (Osberg, 1985; Osberg and Sharpe, 2002, 2005). The evolution of the index is aligned with that of per capita GDP from 1995 to 2001 but diverges in the following period because of the fall of regional per capita GDP and consumption in the period 2002-2005 and a contemporary strong growth of the health dimension and of the level of human capital stock (education)

Beyond GDP: the Index of Economic Well-Being for Lombardy

The definition and measurement of economic well-being is receiving growing attention, both in academic research and on the policy agenda, as a key factor in decision-making at all levels, both national and local. There is general agreement among economists and policy-makers that it is necessary to go beyond gross domestic product (GDP), but a new and wider definition and measurement is far from being achieved. It is for this reason that research and experiments which seek to test different definitions and indicators can contribute to the ongoing debate by furnishing empirical results. This paper attempts to measure the multidimensional well-being of the Italian region of Lombardy, for the years 1995-2005, on the basis of the Index of Economic Well-Being (IEWB) proposed by the Centre for the Study of Living Standards (Osberg, 1985; Osberg and Sharpe, 2002b, 2005). The evolution of the Index is aligned with that of per capita GDP from 1995 to 2001, but diverges in the following period. Well-being exhibits a strong decline in 2002, mainly due to a consumption crisis and a decline in voluntary work, and a slight increase in 2004-05 (owing to a positive trend in per capita consumption, voluntary work, public expenses and capital stock). Per capita GDP showed a negative trend between 2003 and 2005