Unemployment and Liquidity Constraints

In this paper we propose a modelling approach for labor supply and consumption decisions that is firmly grounded within a utility maximizing framework and allows for a role of such institutional constraints as limited access to borrowing and involuntary unemployment. We report estimations for a system of dynamic probit models with data from the Panel Study of Income Dynamics. These estimations test broad predictions of the theoretical model. One of our models describes a household’s propensity to be liquidity constrained in a given period. The second is a dynamic ordered probit model for a labor constraint indicator describing qualitative aspects of the conditions of employment, that is whether the household head is involuntarily overemployed, voluntarily employed, or involuntarily underemployed or unemployed. These models are estimated separately as well as jointly. Our results provide strong support for the basic theory of constrained behavior and the interaction between liquidity constraints and exogenous constraints on labor supply

A Note on the Dual Approach to the Existence and Characterization of Optimal Consumption Decisions Under Uncertainty and Liquidity Constraints

This paper considers a dual approach to the problem of maximizing lifetime utility subject to liquidity constraints in a discrete time setting. These constraints prohibit the decision maker from borrowing against future endowment income. The dual approach allows us to exploit directly the supermartingale property of the marginal utility of expenditure and to establish existence and uniqueness of the optimal solution. The optimal solution is interpreted as deriving from a version of the problem that is subject to a single lifetime budget constraint, where expenditures and incomes are discounted to the beginning of the horizon by means of individualized Arrow-Debreu prices.Consumer choice, duality theory

Unemployment and Liquidity Constraints

In this paper we propose a modelling approach for labor supply and consumption decisions that is firmly grounded within a utility maximizing framework and allows for a role of such institutional constraints as limited access to borrowing and involuntary unemployment. We report estimations for a system of dynamic probit models with data from the Panel Study of Income Dynamics. These estimations test broad predictions of the theoretical model. One of our models describes a household's propensity to be liquidity constrained in a given period. The second is a dynamic ordered probit model for a labor constraint indicator describing qualitative aspects of the conditions of employment, that is whether the household head is involuntarily overemployed, voluntarily employed, or involuntarily underemployed or unemployed. These models are estimated separately as well as jointly. Our results provide strong support for the basic theory of constrained behavior and the interaction between liquidity constraints and exogenous constraints on labor supply.Intertemporal optimization, quantity constraints, liquidity constraints, unemployment, dynamic probit models, simulation estimation

Cyprus' image—a sun and sea destination—as a detrimental factor to seasonal fluctuations. Exploration into motivational factors for holidaying in Cyprus

Cyprus is established as a summer destination. To aid the destination in developing its winter season as well, this research uses a qualitative inductive approach to explore the tourists’ current image of the island and their motivations of visiting it. The research indicates that the current image, which essentially portrays Cyprus as a sun-and-sea destination is thought to dissuade tourists from perceiving the island as a year-round destination. Nonetheless, increasing the pull factors of the destination through the development of unique special interest products can help in extending the tourism season as well as broaden its narrow image

A Bayesian test for the appropriateness of a model in the biomagnetic inverse problem

This paper extends the work of Clarke [1] on the Bayesian foundations of the biomagnetic inverse problem. It derives expressions for the expectation and variance of the a posteriori source current probability distribution given a prior source current probability distribution, a source space weight function and a data set. The calculation of the variance enables the construction of a Bayesian test for the appropriateness of any source model that is chosen as the a priori infomation. The test is illustrated using both simulated (multi-dipole) data and the results of a study of early latency processing of images of human faces. [1] C.J.S. Clarke. Error estimates in the biomagnetic inverse problem. Inverse Problems, 10:77--86, 1994.Comment: 13 pages, 16 figures. Submitted to Inverse Problem