ICT Penetration and Aggregate Production Efficiency: Empirical Evidence for a Cross-Section of Fifty Countries

This study investigates the impact of telecommunications penetration on the aggregate production efficiency in a large cross-section of fifty countries. We show that higher levels of ICT capital stock penetration increase technical efficiency levels in the aggregate production function. However, depending on the geographical location the effects of ICT penetration are different. Our empirical findings suggest that increasing the per capita telecommunications capital in the form of land line and mobile telephones, computers, Internet access and the like is likely to considerably increase productive efficiency in case of the poorest nations, while in the more developed countries such gains have been largely exhausted. In the end we offer several avenues for more research based on the caveats discovered while working on this study.economic growth; technical efficiency; telecommunications investment

ICT PENETRATION AND AGGREGATE PRODUCTION EFFICIENCY: EMPIRICAL EVIDENCE FOR A CROSS-SECTION OF FIFTY COUNTRIES

This study investigates the impact of telecommunications penetration on the aggregate production efficiency in a large cross-section of fifty countries. We show that higher levels of ICT capital stock penetration increase technical efficiency levels in the aggregate production function. However, depending on the geographical location the effects of ICT penetration are different. Our empirical findings suggest that increasing the per capita telecommunications capital in the form of land line and mobile telephones, computers, Internet access and the like is likely to considerably increase productive efficiency in case of the poorest nations, while in the more developed countries such gains have been largely exhausted. In the end we offer several avenues for more research based on the caveats discovered while working on this studyeconomic growth, technical efficiency, telecommunications investment

Measuring the Value of a Moscow Apartment: a Spatial Approach to the Hedonic Pricing of Attributes

In this paper we explore spatial effects in a hedonic price function framework for a large sample of apartments in Moscow. We find strong evidence of both spatial lag and spatial autocorrelation. Our results are robust across both the spatial model specifications and the choice of the spatial weight matrices. The fact that the quality attributes’ shadow prices we estimate are not much different from the OLS (ML) estimates suggests that spatial effects are orthogonal to the quality characteristics. One interesting finding is that an increase in the kitchen area contributes much more significantly to the apartment’s price compared a marginal increase in the living area, which is reflecting the traditional role kitchen has been playing in the Russian households as a dining and communication area. House type, time needed to walk to the nearest subway station and subway time to the city center are other important apartment attributes. Methodologically, we believe our study is demonstrating the need to develop spatial econometric techniques for application in the environment where both types of spatial effects are simultaneously present.spatial models, housing market, hedonic price functions

A Network-Economic Policy Study of Identity Management Systems and Implications for Security and Privacy Policy

Solving the problems associated with identity management in the “virtual” world is proving to be one of the keys to full realization of the economic and social benefits of networked information systems. By definition, the virtual world lacks the rich combination of sensory and contextual cues that permit organizations and individual humans interacting in the physical world to reliably identify people and authorize them to engage in certain transactions or access specific resources. Being able to determine who an online user is and what they are authorized to do thus requires an identity management infrastructure. Some of the most vexing problems associated with the Internet (the deluge of spam, the need to regulate access to certain kinds of content, securing networks from intrusion and disruption, problems of inter-jurisdictional law enforcement related to online activities, impediments to the sharing of distributed computing resources) are fundamentally the problems of identity management. And yet, efforts by organizations and governments to solve those problems by producing and consuming identity systems may create serious risks to freedom and privacy. Thus the implementation and maintenance of identity management systems raises important public policy issues. The identity management systems (the IMS-s) often tend to require more information from the consumers than would otherwise be necessary for the authentication purposes. The typical choice being analyzed in IMS is the one between a completely centralized or integrated system (one ID - one password, and a single sign-on) and the one comprising a plethora of (highly) specialized IMS-s (multiple ID-s and passwords). While the centralized system is the most convenient one, it is also likely to require too much personal information about the users, which may infringe on their rights to privacy and which definitely will result in serious damage should this personal information be stolen and/or abused. When more than two IMS-s interconnect (more of a practical side with various types of commercial values), they share the private information with each other, thus increasing consumers’ exposure to possible information misuse. It is thus rather obvious that the public policy plays an important role to maintain the structure of identity management systems ensuring the existence of a sound balance between the authentication requirements and consumers’ rights to privacy. The focus of this paper is on investigating this type of tradeoff by employing a theoretical framework with agents whose utility depends on the amount of private information revealed, and on making policy recommendations related to the issue of interconnection between alternative IMS-s. Our model derives optimal process of interconnection between IMS-s in the simple case of three IMS-s, then generalizing it to the case of more than three firms. The socially optimal outcome of the interconnection process in our model implies encouraging the interconnection between smaller rather than larger IMS-s.Networks; Interconnection; Identity Management; Regulation Policy

Telecommunications Capital Intensity and Aggregate Production Efficiency: a Meta-Frontier Analysis

This study explores the link between telecommunications capital intensity and the aggregate production efficiency in the framework of meta-frontier analysis. The latter makes it possible to compare technical efficiency levels between countries operating under different technological frontiers. Our analysis suggests that increases in per capita levels of telecommunication capital will be most helpful in increasing the efficiency with which the existing technological knowledge and production resources are used, but not the technological frontier itself. We thus identify countries where additional investments in telecommunications are desirable as the ones where the technological lag is relatively small and efficient usage of productive resources is a problem. Africa appears to be the region where policies providing incentives for firms and households to purchase more telecommunications equipment will produce the most sizeable effect. In contrast, in the OECD countries where production practices are already the most efficient ones globally and the existing per capita telecommunications capital stock is high, further increases in the latter are not likely to result in any sizable production efficiency gains.telecommunications; meta-frontier analysis; economic growth; production efficiency

Charting Technical Trading Rules and the Lottery of Technical Analysis: Empirical Evidence from Foreign Exchange Market

We use trend-following, trend continuation and trend reversal pattern recognition techniques to apply technical charting rules to trading seven major currency pairs for the period of 1999 through early 2007. Our results suggest that the persistent popularity of technical analysis among practicing traders may be the result of a “lottery” wherein most of the participants end up with zero profits. However, the rest of the participants are much more likely to end up winning rather than losing. In this way, the popularity of technical trading rules may co-exist with the validity of market efficiency hypothesis.market efficiency; technical analysis; forecasting; foreign exchange markets

Measuring the Value of a Moscow Apartment: a Spatial Approach to the Hedonic Pricing of Attributes

In this paper we explore spatial effects in a hedonic price function framework for a large sample of apartments in Moscow. We find strong evidence of both spatial lag and spatial autocorrelation. Our results are robust across both the spatial model specifications and the choice of the spatial weight matrices. The fact that the quality attributes’ shadow prices we estimate are not much different from the OLS (ML) estimates suggests that spatial effects are orthogonal to the quality characteristics. One interesting finding is that an increase in the kitchen area contributes much more significantly to the apartment’s price compared a marginal increase in the living area, which is reflecting the traditional role kitchen has been playing in the Russian households as a dining and communication area. House type, time needed to walk to the nearest subway station and subway time to the city center are other important apartment attributes. Methodologically, we believe our study is demonstrating the need to develop spatial econometric techniques for application in the environment where both types of spatial effects are simultaneously present

Estimating Consumers’ Willingness to Pay for the Individual Quality Attributes with DEA

In a highly competitive environment a product’s commercial success depends increasingly more upon the ability to satisfy consumers’ preferences that are highly diversified. Since a consumer product typically comprises a host of technological attributes, its market value incorporates all of the individual values of technological attributes. If the willingness-to-pay (WTP) for individual technological characteristics of a product is known, one can conjecture the overall WTP or the imputed market price for the product. The market price listed by the producer has to be equal to or lower than this WTP for the commercial survival of the product. In this paper we propose a methodology for estimating the value of individual product characteristics and thus the overall WTP of the product with DEA. Our methodology is based on a model derived from the consumer demand theory on the one hand, and the recent theoretical developments on the flexible DEA frontiers on the other hand. The paper also presents a real case study for the mobile phone market, which is characterized by its high speed of innovation. The suggested model and its empirical applications has implications for the extension of DEA methodology to the estimation of market value of a complex multi-attribute product and/or of a value of quality attribute that is not explicitly marketable in isolation. We also expect that the framework will shed some light on the successful way of product differentiation when the cost information for individual characteristics is available.DEA; efficient consumption; willingness to pay; multi-attribute product pricing

How Similar Are the East Asian Economies? A Cluster Analysis Perspective on Economic Cooperation in the Region

Recent economic calamities such as the 1997 Asian financial crisis have amply demonstrated the need for increased economic integration in the East Asian economic region. While various forms of economic cooperation are possible, it is important to identify groups, or clusters, of countries that are similar to each other economically. Such similarity not only has been shown to be associated with the increased bilateral trade flows, but also with the increased net welfare gains to the participating countries. I employ a variety of clustering techniques and come up with a clustering solution containing four groups of economically similar countries. The clusters are robust across the estimation procedures. Hierarchical clustering also conducted in this study suggests a sequential agglomerating path for the countries to follow. The results of this study are intended as one of the (many) decision tools used by the parties considering multilateral economic cooperation and trade agreements in the region

Telecommunications Capital Intensity and Aggregate Production Efficiency: a Meta-Frontier Analysis

This study explores the link between telecommunications capital intensity and the aggregate production efficiency in the framework of meta-frontier analysis. The latter makes it possible to compare technical efficiency levels between countries operating under different technological frontiers. Our analysis suggests that increases in per capita levels of telecommunication capital will be most helpful in increasing the efficiency with which the existing technological knowledge and production resources are used, but not the technological frontier itself. We thus identify countries where additional investments in telecommunications are desirable as the ones where the technological lag is relatively small and efficient usage of productive resources is a problem. Africa appears to be the region where policies providing incentives for firms and households to purchase more telecommunications equipment will produce the most sizeable effect. In contrast, in the OECD countries where production practices are already the most efficient ones globally and the existing per capita telecommunications capital stock is high, further increases in the latter are not likely to result in any sizable production efficiency gains