Auctioning airport slots (?)

The current allocation of slots on congested European airports constitutes an obstacle to the effective liberalisation of air transportation undertaken in Europe. With a view to favouring efficient slot utilisation and competition, as is the goal of the European commission, we propose to use a market mechanism, based on temporary utilisation licences. In order to allocate those licences, we propose and describe an iterated combinatorial auction mechanism where a percentage of licences would be reallocated each season. A secondary market would also be set up in order to reallocate slots during a season. Since a combinatorial auction involve a complex optimisation procedure, we describe how it can be made to work in the case of auctions.slots; airports; licence; auction; combinatorial

Power of the Spacing test for Least-Angle Regression

Recent advances in Post-Selection Inference have shown that conditional testing is relevant and tractable in high-dimensions. In the Gaussian linear model, further works have derived unconditional test statistics such as the Kac-Rice Pivot for general penalized problems. In order to test the global null, a prominent offspring of this breakthrough is the spacing test that accounts the relative separation between the first two knots of the celebrated least-angle regression (LARS) algorithm. However, no results have been shown regarding the distribution of these test statistics under the alternative. For the first time, this paper addresses this important issue for the spacing test and shows that it is unconditionally unbiased. Furthermore, we provide the first extension of the spacing test to the frame of unknown noise variance. More precisely, we investigate the power of the spacing test for LARS and prove that it is unbiased: its power is always greater or equal to the significance level $\alpha$. In particular, we describe the power of this test under various scenarii: we prove that its rejection region is optimal when the predictors are orthogonal; as the level $\alpha$ goes to zero, we show that the probability of getting a true positive is much greater than $\alpha$; and we give a detailed description of its power in the case of two predictors. Moreover, we numerically investigate a comparison between the spacing test for LARS and the Pearson's chi-squared test (goodness of fit).Comment: 22 pages, 8 figure

Consistent estimation of the filtering and marginal smoothing distributions in nonparametric hidden Markov models

In this paper, we consider the filtering and smoothing recursions in nonparametric finite state space hidden Markov models (HMMs) when the parameters of the model are unknown and replaced by estimators. We provide an explicit and time uniform control of the filtering and smoothing errors in total variation norm as a function of the parameter estimation errors. We prove that the risk for the filtering and smoothing errors may be uniformly upper bounded by the risk of the estimators. It has been proved very recently that statistical inference for finite state space nonparametric HMMs is possible. We study how the recent spectral methods developed in the parametric setting may be extended to the nonparametric framework and we give explicit upper bounds for the L2-risk of the nonparametric spectral estimators. When the observation space is compact, this provides explicit rates for the filtering and smoothing errors in total variation norm. The performance of the spectral method is assessed with simulated data for both the estimation of the (nonparametric) conditional distribution of the observations and the estimation of the marginal smoothing distributions.Comment: 27 pages, 2 figures. arXiv admin note: text overlap with arXiv:1501.0478

Endogenous Technical Progress and the Emergence of Child Labor Laws

I develop a theory of technical progress that uncovers sufficient conditions for opposition to the adoption of child labor laws to disappear over time. The supply of child labor comes exclusively from unskilled parents, because of their inability to help their children benefit from formal education, while its demand originates from capitalists-the firms' owners. Because child labor crowds out adult employment, there are always social pressures to ban it. However, such pressures are met by capitalists' opposition. Capitalist oppose the adoption of a ban on child labor because such a ban reduces opportunities for earning a high return on capital. Technical progress, induced by skill accumulation, improves the earning prospects of firms hiring adult workers only, while it reduces those of firms hiring children only. As a result, more capitalists are drawn into the adult labor market, and industrial opposition to a ban on child labor eventually vanishes over time. Provided child labor exhibits skill-enhancing learning-by-doing, policy action to speed up the emergence of child labor laws should therefore focus on education reforms that raise the quality of education school-goers receive, and on political reforms that raise the cost of lobbying legislators against adopting a ban on child labor. However, in countries where child labor provides little or no opportunities for learning-by-doing, no law will emerge unless appropriately targeted poverty alleviation mechanisms are designed, in order to induce unskilled parents to allocate a positive fraction of child's time to schooling.Child labor, Learning-by-doing, Education, Technical progress, Lobbying cost, Voting equilibrium

The Impact of Government-Sponsored Training Programs on the Labor Market Transitions of Disadvantaged Men

Dans ce travail, nous cherchons à déterminer l'impact des mesures actives d'insertion sur les transitions des jeunes prestataires masculins de l'aide de dernier recours sur le marché du travail. La richesse des données à notre disposition nous permet de recréer de façon très détaillée l'historique de chaque prestataire sur une période relativement longue. Nous avons recours à un modèle de durée en temps continue pour estimer la densité des durées observées dans plus de sept états différents. L'endogénéité de la présence dans une mesure active est explicitement prise en compte. Nous analysons la sensibilité des paramètres estimés en comparant les résultats d'un modèle non-paramétrique standard avec ceux de plusieurs modèles paramétriques à deux ou trois facteurs de charge. Nos résultats montrent que les jeunes hommes peu scolarisés qui participent à des mesures actives destinées aux prestataires d'aide de dernier recours ont davantage de difficultés à s'intégrer au marché du travail que ceux qui ne participent pas à des telles mesures. En revanche, les mesures d'insertion offertes dans le cadre du programme d'assurance-emploi semblent donner de meilleurs résultats. De façon générale, la durée dans chacun des sept états considérés est sensible aux variables considérées dans l'analyse, soient les prestations d'aide de dernier recours, le salaire minimum, et le taux de chômage. The analysis focuses on the impact of government-sponsored training programs aimed at disadvantaged male youths on their labour market transitions. The richness of the data at our disposal allows us to recreate very detailed individual histories over a relatively long period. We use a continuous time duration model to estimate the density of duration times in as many as seven states, controlling for the endogeneity of an individual's training status. We investigate the sensitivity of the parameter estimates by comparing a typical non-parametric specification with a series of parametric two-factor loading models, as well as a parametric three-factor loading model. Our results show that young, poorly educated males who participate in welfare training programs do worse on the labour market than those who do not participate. On the other hand, participation in unemployment training programs provides them some benefits. In general, we find that duration times in any of the seven states considered are sensitive to variations in program parameters such as welfare benefits, policy variables such as the minimum wage rate, and in the economic environment as proxied by the unemployment rate.Modèle de durée multi-états multi-épisodes, hétérogénéité non-paramétrique, mesures active d'insertion, aide de dernier recours, multi-state multi-episods duration model, non-parametric heterogeneity, training programs, welfare

Effects of Workers' Compensation: A Survey

This survey covers extensively the theoretical and the empirical work that was done on the incentive effects related to the existence of workers' compensation (WC) in the North American context. It first analyzes the economic rationale for compulsory WC. Then it studies the impact of WC on behavior. Three types of effects can be distinguished: 1) WC may influence frequency, duration and nature of claims through a variety of incentive effects. Under asymmetrical information about accident prevention activities, WC may affect safety behavior of both employers and employees and the risk level in the market place. Under asymmetrical information about the true nature of workplace injuries, insured workers may attempt to report false or off-the-job accidents and to undertake activities in order to obtain higher WC benefits, especially in the case of hard-to-diagnose injuries. Moreover, substitution between WC and other insurance programs may be observed. The decision of reporting a workplace accident may also be affected by the generosity of WC benefits. 2) WC may induce changes in occupational wages rates and 3) WC may affect firms' productivity. So far, the literature has focused mainly on the first type of effects. The main results show that increases in WC insurance are associated with an increase in the frequency of injuries (elasticities ranging from 0.4 to 1), and with an increase in the average duration of claims (elasticities ranging from 0.2 to 0.5). Furthermore, increases in WC are associated with more reporting of injuries that are hard-to-diagnose and, in the same line, there are some evidence (at least in Canada) of substitution between unemployment insurance and WC insurance. Lastly, there are empirical results showing that the presence of WC insurance induces important reductions in wage rates, while an emerging literature suggests that changes in WC insurance may also have negative productivity effects. Cette étude couvre un grand nombre des travaux théoriques et empiriques réalisés sur les effets incitatifs de l'existence d'indemnisation pour les accidentés du travail (IAT) dans le contexte nord- américain. Nous analysons d'abord la rationalité économique de l'indemnisation obligatoire des accidentés du travail. Nous étudions ensuite l'impact de l'IAT sur le comportement. On peut distinguer trois types d'effets : 1) l'IAT peut influencer la fréquence, la durée et la nature des réclamations à travers une variété d'effets incitatifs. Dans le cas d'information asymétrique sur les activités de prévention des accidents, l'IAT peut affecter les activités préventives des employés et des employeurs, ainsi que le niveau de risque sur le marché. Dans le cas d'information asymétrique sur la véritable nature des accidents du travail, les travailleurs assurés peuvent tenter de déclarer de faux accidents, ou des accidents survenus à l'extérieur de leur lieu de travail. Ils pourront aussi entreprendre certaines activités afin de bénéficier d'indemnisations plus élevées, particulièrement dans le cas de blessures difficiles à diagnostiquer. De plus, on peut observer une substitution entre l'IAT et d'autres programmes d'assurance. La décision de déclarer un accident du travail peut également être affectée par la générosité des prestations. 2) L'IAT peut modifier le taux de salaire des travailleurs et 3) l'IAT peut affecter la productivité de la firme. Jusqu'à présent, les écrits ont mis l'accent sur le premier type d'effets. Les principaux résultats montrent qu'une hausse de l'IAT est associée à une augmentation de la fréquence des blessures (élasticités entre 0.4 et 1), et à une hausse de la durée moyenne des réclamations (élasticités entre 0.2 et 0.5). Par ailleurs, on peut constater une relation positive entre l'accroissement de l'IAT et le nombre de blessures difficiles à diagnostiquer. Et, dans le même ordre d'idées, les études ont montré (du moins au Canada) qu'il s'effectue une substitution entre l'assurance chômage et l'assurance contre les accidents du travail. Enfin, des résultats empiriques ont montré que la présence de l'assurance contre les accidents du travail conduit à d'importantes réductions du taux de salaire, tandis qu'une nouvelle vague d'études suggère que les changements de l'assurance contre les accidents du travail peuvent également exercer un effet négatif sur la productivité.Assurance, accidents du travail, sécurité du travail, incitation, salaires, productivité, Insurance, workers' compensation, occupational safety and health, incentives, wages, productivity

Serial Cost Sharing in Multidimensional Contexts

The Serial Cost Sharing Rule was originally conceived for situations where the demands of agents pertain to a homogeneous private good, produced by an unreplicable technology. In this context, it is endowed with a variety of desirable equity and coherency properties. This paper investigates the extension of this rule to the context where agents request many goods that may be public, private or specific to some of them, where the aggregation rule may be very general and where demands may have to be scaled in a non proportional way, more precisely along a path, in order to compute cost shares. It proposes the Path Serial Rule to address these general problems. It then shows which properties and characteristics are satisfied by this rule. Some of them are transposed directly from the single good context to the general one while other must be weakened. More precisely, they are required to hold only on the paths along which demands must be scaled if needed. Nevertheless, some of the characterisations of the serial rule in the single good case do not carry over to the general context. La règle de partage séquentiel des coûts a été conçue à l'origine pour le cas où les demandes des agents portent sur un bien privé homogène, produit par une technologie non reproductible. Dans un tel contexte, cette règle satisfait de nombreuses propriétés d'équité et de cohérence. Dans cet article, on étudie l'extension de cette règle aux cas où les demandes des agents peuvent être des vecteurs qui ne représentent pas forcément des biens homogènes entre les agents, dont l'agrégation ne se fait pas uniquement via la sommation et où les demandes doivent être ajustées de manière non proportionnelle, plus précisément le long d'un sentier, pour le calcul des parts de coût. On montre ensuite quelles sont les propriétés qui sont satisfaites par cette règle ou qui la caractérisent. Certaines sont transposées directement du contexte à un seul bien au contexte général alors que d'autres doivent être affaiblies. Plus précisément, on exige leur respect uniquement le long des sentiers servant à ajuster les demandes le cas échéant. Néanmoins, certaines caractérisations de la règle séquentielle dans le contexte à un seul bien ne peuvent pas être transposées au contexte général.Serial cost sharing, multi products, general aggregation

Impact of Regulatory Agencies on the Efficiency of Publicly-Owned Utilities

We compare the economic efficiency of a publicly-owned utility directly controlled by the government with a publicly-owned utility regulated by a public utility commission (PUC). Regulation by a PUC is modelled as a Nash equilibrium of a game between two principals, the government and the PUC, each of them having control over a subset of decision variables determining the utility performance. A utility manager, who has private information over a productivity parameter, is the agent. Comparisons of both regulatory regimes are made with respect to output, choice of inputs, manager's information rent and firm's profit. Reasons for which the government should prefer one regulatory regime over the other are discussed. The recent regulatory reform of electricity markets in the province of Quebec (Canada) provides an illustration of the model.Regulation, Public Enterprises

Nash Implementable Liability Rules for Judgement-Proof Injurers

I provide a complete characterization of Nash implementable allocations of spending in prevention by judgement-proof injurers. This characterization is used to identify the optimal rule that allows for the maximum total spending in prevention. The optimal rule amounts to apply the negligence rule to the "deep-pocket" (or the "victim"), that is the injurer who responds the most to monetary incentives under the strict liability rule, and the strict liability rule to everybody else.Negligence rule, limited liability, multiple injurers, Nash implementation

The Role of Demand Uncertainty in Airline Network Structure

In this paper, we provide another reason that may explain the adoption of the hub-and-spoke network structure in the airline industry. We show that when an airline has to decide on its capacity before the demand conditions are perfectly known, a hub-and-spoke network structure by pooling passengers from several markets into the same plane helps the firm to lower its cost of excess capacities in the case of low demand and to reduce its opportunity cost of rationing in the case of high demand.Airlines, Network, Demand uncertainty, Hub