Impact of Performance - B ased Contracting on Product Reliability : An Empirical Analysis

Using a proprietary data set provided by a major manufacturer of aircraft engines, we empirically investigate how product reliability is impacted by the use of two different types of after-sales maintenance support contracts: time and material contracts (T&MC) and performance-based contracts (PBC). We offer a number of competing arguments based on the theory of incentives that establish why product reliability may increase or decrease under PBC. We build a two-stage econometric model that explicitly accounts for the endogeneity of contract choices, and find evidence of a positive and significant effect of PBC on product reliability. The estimation of our model indicates that product reliability is higher by 25%–40% under PBC compared to under T&MC, once the endogeneity of contract choice is taken into account. Our results are consistent with two mechanisms for reliability improvement under PBC: more frequent scheduled maintenance and better care performed in each maintenance event

Service Competition and Product Quality in the U.S. Automobile Industry

We study the impact of service attributes (warranty length, after-sales service quality) on consumer demand in the U.S. automobile industry, examining the presence of complementarities/substitution between service attributes and product quality. Our results estimate a median willingness to pay for one year of a warranty of approximately $850, which is equivalent to 3.1% of the median vehicle price in our sample. We find that, for a car with median characteristics, the effect on consumer utility of a 1% price decrease is equivalent, all else being equal, to increasing product quality by 2.2%, and is in turn equivalent to increasing the warranty length by 8%. Our results also indicate that service attributes play a compensatory role with respect to product quality; i.e., the impact of warranty length and service quality on demand increases when product quality decreases. Conversely, both service metrics are complementary with respect to demand; i.e., the better the service quality, the higher the marginal effect of longer warranties. Our results thus imply that, in our period of analysis, warranties played a more important role for American firms than for foreign firms, consistent with the fact that American manufacturers exhibited lower product quality and higher service quality than non-American firms

Effects of Education on the Intergenerational Transmission of Labor Income in Mexico

This paper studies the relationship between the labor market earnings of parents and their children, with a particular emphasis on education. We incorporate heterogeneity of levels of income in two ways: first, by examining the transmission mechanism of family income by grouping households according to income levels. Second, we use quantile regressions to evaluate how the earnings distribution changes over time. For this purpose, we use hourly earnings of the household head and decompose it into the estimated hourly earnings and a residual.Education, Labor Income

Impact of Performance-Based Contracting on Product Reliability: An Empirical Analysis

Using a proprietary data set provided by a major manufacturer of aircraft engines, we empirically investigate how product reliability is impacted by the use of two different types of after-sales maintenance support contracts: time and material contracts (T&MC) and performance-based contracts (PBC). We offer a number of competing arguments based on the theory of incentives that establish why product reliability may increase or decrease under PBC. We build a two-stage econometric model that explicitly accounts for the endogeneity of contract choices, and find evidence of a positive and significant effect of PBC on product reliability. The estimation of our model indicates that product reliability is higher by 25%–40% under PBC compared to under T&MC, once the endogeneity of contract choice is taken into account. Our results are consistent with two mechanisms for reliability improvement under PBC: more frequent scheduled maintenance and better care performed in each maintenance event

Life Project for Adolescents: A Concept Analysis

It is essential to identify protective factors during adolescence due to its high incidence on risk behaviors. One of these factors is to have a life project that influences adolescent decision-making. The concept of life project has mainly been linked to teen pregnancy, depression and suicide; however, some authors agree that the concept is not clearly defined. Therefore, the objective of this paper is to define the concept of adolescent life project, using the methodology developed by Walker and Avant for concept analysis. The following steps were followed are: select a concept, determining the purpose of analysis, identifying all uses of the concept, determining the defining attributes, identifying a model, a borderline and a contrary cases, identifying history and consequences of the concept, and finally defining empirical referents. After the analysis, the final definition of the concept of adolescent life project includes the set of desires, future plans and actions necessary to accomplish it that influence the adolescent decisions. Knowing the importance of this concept when working with adolescents may guide development more effective interventions

Multiple star systems in the Orion nebula

This is the author accepted manuscript. The final fersion is available from EDP Sciences via the DOI in this record.This work presents an interferometric study of the massive-binary fraction in the Orion Trapezium cluster with the recently comissioned GRAVITY instrument. We observed a total of 16 stars of mainly OB spectral type. We find three previously unknown companions for θ1 Ori B, θ2 Ori B, and θ2 Ori C. We determined a separation for the previously suspected companion of NU Ori. We confirm four companions for θ1 Ori A, θ1 Ori C, θ1 Ori D, and θ2 Ori A, all with substantially improved astrometry and photometric mass estimates. We refined the orbit of the eccentric high-mass binary θ1 Ori C and we are able to derive a new orbit for θ1 Ori D. We find a system mass of 21.7 M⊙ and a period of 53 days. Together with other previously detected companions seen in spectroscopy or direct imaging, eleven of the 16 high-mass stars are multiple systems. We obtain a total number of 22 companions with separations up to 600 AU. The companion fraction of the early B and O stars in our sample is about two, significantly higher than in earlier studies of mostly OB associations. The separation distribution hints toward a bimodality. Such a bimodality has been previously found in A stars, but rarely in OB binaries, which up to this point have been assumed to be mostly compact with a tail of wider companions. We also do not find a substantial population of equal-mass binaries. The observed distribution of mass ratios declines steeply with mass, and like the direct star counts, indicates that our companions follow a standard power law initial mass function. Again, this is in contrast to earlier findings of flat mass ratio distributions in OB associations. We excluded collision as a dominant formation mechanism but find no clear preference for core accretion or competitive accretion.Marie Skłodowska-Curie Grant AgreementFCT-PortugalERC Starting Gran

Increasing wage dispersion and the changes in relative employment and wages in Mexico's urban informal sector: 1987-1993

This study analyses the role of changes in informal/formal relative employment, wage levels and wage inequality in explaining increasing wage dispersion in Mexico during the 1987–1993 period. From 1987 to 1993, the variance of the log of hourly wages for Mexican workers increased by more than 50 per cent. Using data from the Encuesta nacional de empleo urbano we find that this increase in the overall wage dispersion was mainly driven by increasing wage dispersion in the formal sector coupled with a faster growth in formal sector employment as a percentage of total employment. However, compression in the distribution of wages within the informal sector contributed to substantially slowdown the increasing overall wage inequality. About 60 per cent of the 1987–1993 4.65 percentage point reduction in the informal sector share of total employment is explained by changes in the structure that determines sectoral employment; the rest is explained by changes in the composition of the labour force, particularly increases in the sectoral education gap and a change in the regional relative share of sectoral employment. Also, from 1987 to 1993 the sectoral wage ratio increased from 0.59 to 0.63. It seems that a relative improvement in unobserved skills in the informal sector helped to close the wage differential but this effect was partially offset by an increase in the relative prices of both observed and unobserved skills, as well as increases in relative observed skills in the formal sector, particularly education.