Multinational Firms and the Factor Intensity of Trade

In studying the impact of direct investment on the amount, direction, and composition of international trade we have found that the multinational firm fits uncomfortably into the usual theory of trade and capital movements. We attempt here to introduce the fact of the existence of multinational firms into the explanation of trade flows and particularly into the long-running debate over the relations among factor abundance, factor prices and trade.

Sex, lies and self-reported counts: Bayesian mixture models for heaping in longitudinal count data via birth-death processes

Surveys often ask respondents to report nonnegative counts, but respondents may misremember or round to a nearby multiple of 5 or 10. This phenomenon is called heaping, and the error inherent in heaped self-reported numbers can bias estimation. Heaped data may be collected cross-sectionally or longitudinally and there may be covariates that complicate the inferential task. Heaping is a well-known issue in many survey settings, and inference for heaped data is an important statistical problem. We propose a novel reporting distribution whose underlying parameters are readily interpretable as rates of misremembering and rounding. The process accommodates a variety of heaping grids and allows for quasi-heaping to values nearly but not equal to heaping multiples. We present a Bayesian hierarchical model for longitudinal samples with covariates to infer both the unobserved true distribution of counts and the parameters that control the heaping process. Finally, we apply our methods to longitudinal self-reported counts of sex partners in a study of high-risk behavior in HIV-positive youth.Comment: Published at http://dx.doi.org/10.1214/15-AOAS809 in the Annals of Applied Statistics (http://www.imstat.org/aoas/) by the Institute of Mathematical Statistics (http://www.imstat.org

Mortgage Default Risk and Real Estate Prices: The Use of Index-Based Futures and Options in Real Estate

Evidence is shown, using US foreclosure data by state 1975-93, that periods of high default rates on home mortgages strongly tend to follow real estate price declines or interruptions in real estate price increase. The relation between price decline and foreclosure rates is modelled using a distributed lag. Using this model, holders of residential mortgage portfolios could hedge some of the risk of default by taking positions in futures or options markets for residential real estate prices, were such markets to be established.