The optimal behaviour of firms facing stochastic costs

This paper aims at assessing the optimal behavior of a firm facing stochastic costs of production. In an imperfectly competitive setting, we evaluate to what extent a firm may decide to locate part of its production in other markets different from which it is actually settled. This decision is taken in a stochastic environment. Portfolio theory is used to derive the optimal solution for the intertemporal profit maximization problem. In such a framework, splitting production between different locations may be optimal when a firm is able to charge different prices in the different local markets.

Human Capital, the Structure of Production, and Growth

Recent decisions by the Spanish national competition authority (TDC) mandate payment systems to include only two costs when setting their domestic multilateral interchange fees (MIF): a fixed processing cost and a variable cost for the risk of fraud. This artificial lowering of MIFs will not lower consumer prices, because of uncompetitive retailing; but it will however lead to higher cardholders fees and, likely, new prices for point of sale terminals, delaying the development of the immature Spanish card market. Also, to the extent that increased cardholders fees do not offset the fall in MIFs revenue, the task of issuing new cards will be underpaid relatively to the task of acquiring new merchants, causing an imbalance between the two sides of the networks. Moreover, the pricing scheme arising from the decisions will cause unbundling and underprovision of those services whose costs are excluded. Indeed, the payment guarantee and the free funding period will tend to be removed from the package of services currently provided, to be either provided by third parties, by issuers for a separate fee, or not provided at all, especially to smaller and medium-sized merchants. Transaction services will also suffer the consequences that the TDC precludes pricing them in variable terms.

Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate

[eng] This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market.

Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate

This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market.

Aggregate Costs of Gender Gaps in the Labor Market: A Quantitative Estimate

This paper examines the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate productivity and income per capita. We simulate an occupational choice model with heterogeneous agents in entrepreneurial ability, where agents choose to be workers, self-employed or employers. The model assumes that men and women have the same talent distribution, but we impose several frictions on women's opportunities and pay in the labor market. In particular, we restrict the fraction of women participating in the labor market.

Input diffusion and the evolution of production networks

What determines which inputs are initially considered and eventually adopted in the productionof new or improved goods? Why are some inputs much more prominent than others? We modelthe evolution of input linkages as a process where new producers first search for potentially usefulinputs and then decide which ones to adopt. A new product initially draws a set of 'essentialsuppliers'. The search stage is then confined to the network neighborhood of the latter, i.e., to theinputs used by the essential suppliers. The adoption decision is driven by a tradeoff between thebenefits accruing from input variety and the costs of input adoption. This has important implicationsfor the number of forward linkages that a product (input variety) develops over time. Inputdiffusion is fostered by network centrality ? an input that is initially represented in many networkneighborhoods is subsequently more likely to be adopted. This mechanism also delivers a powerlaw distribution of forward linkages. Our predictions continue to hold when varieties are aggregatedinto sectors. We can thus test them, using detailed sectoral US input-output tables. We showthat initial network proximity of a sector in 1967 significantly increases the likelihood of adoptionthroughout the subsequent four decades. The same is true for rapid productivity growth in aninput-producing sector. Our empirical results highlight two conditions for new products to becomecentral nodes: initial network proximity to prospective adopters, and technological progress thatreduces their relative price. Semiconductors met both conditions.

Privatization, cooperation and costs of solid waste services in small towns

This paper analyzes the cost implications of privatization and cooperation in the provision of solid waste services for a sample of small municipalities. In conducting this empirical analysis, a survey is first designed and administered to municipalities in the Spanish region of Aragon, and then an estimation of the determinants of service costs is undertaken, considering the possible endogeneity of delivery choices. Our findings indicate that cooperation is more effective than privatization in saving costs. Both production forms can enable small municipalities to cut costs by exploiting scale economies. However, the fact that inter-municipal cooperation involves lower transaction costs and is less likely to be affected by competition problems would seem to account for the fact that it is a more effective way of reducing costs.

Does urban sprawl increase the costs of providing local public services? Evidence from Spanish municipalities

This paper examines the impact of urban sprawl, a phenomenon of particular interest in Spain, which is currently experiencing this process of rapid, low-density urban expansion. Many adverse consequences are attributed to urban sprawl (e.g., traffic congestion, air pollution and social segregation), though here we are concerned primarily with the rising costs of providing local public services. Our initial aim is to develop an accurate measure of urban sprawl so that we might empirically test its impact on municipal budgets. Then, we undertake an empirical analysis using a cross-sectional data set of 2,500 Spanish municipalities for the year 2003 and a piecewise linear function to account for the potentially nonlinear relationship between sprawl and local costs. The estimations derived from the expenditure equations for both aggregate and six disaggregated spending categories indicate that low-density development patterns lead to greater provision costs of local public services.

Rethinking economies: regulation and responsibility in contemporary ethnographic cases of production and exchange

Informe de investigación realizado a partir de una estancia en la University of London entre el 3 de marzo al 10 de abril 2007. Redacción de un artículo sobre aspectos metodológicos centrales para las ciencias sociales en su vertiente tanto teórica como aplicada: la articulación entre la investigación etnográfica y los modelos abstractos. Tanto la etnografía en sus múltiples formas de describir la realidad observable, como los modelos en su intento por reducir la complejidad con el fin de subrayar las conexiones causales son instrumentos de las ciencias sociales. Los modelos cambian el mundo: gracias a su cualidad abstracta pueden presentar no sólo una imagen de cómo funcionan las cosas, sino también subrayar el aspecto procesual de las conexiones permitiendo de este modo establecer proposiciones prospectivas y guiar las políticas públicas de desarrollo. En la base de la acción encontramos siempre alguna forma de modelización, incluso en el ámbito de las disposiciones subjetivas que mueven a la gente a la toma de decisiones cotidianas. A menudo la realidad escapa a la matriz de los modelos, sin embargo, y el cambio y la adaptación toman caminos insospechados y no planificados. Este proyecto busca construir la posibilidad de un diálogo constructivo, creativo y no-jerárquico entre los modelos de desarrollo económico y la etnografía(...)

Calibration of a Structured Light-Based Stereo Catadioptric Sensor

Catadioptric sensors are combinations of mirrors and lenses made in order to obtain a wide field of view. In this paper we propose a new sensor that has omnidirectional viewing ability and it also provides depth information about the nearby surrounding. The sensor is based on a conventional camera coupled with a laser emitter and two hyperbolic mirrors. Mathematical formulation and precise specifications of the intrinsic and extrinsic parameters of the sensor are discussed. Our approach overcomes limitations of the existing omni-directional sensors and eventually leads to reduced costs of production

The hidden costs of hidden debt

We report evidence that salience may have economically signi.cant e¤ects on homeowners.borrowing behavior, through a bias in favour of less salient but more costly loans. Survey evidence corroborates the existence of such a bias. We outline a simple model in which some consumers are biased and show that under plausible assumptions this affects prices in equilibrium. Market data support the predictions of the model.

Markups, Gaps, and the Welfare Costs of Business Fluctuations

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social marginal cost, and give some evidence in support of this interpretation. We then show that, with some auxilliary assumptions our gap variable may be used to measure the efficiency costs of business fluctuations. We find that the latter costs are modest on average. However, to the extent the flexible price equilibrium is distorted, the gross efficiency losses from recessions and gains from booms may be large. Indeed, we find that the major recessions involved large efficiency losses. These results hold for reasonable parameterizations of the Frisch elasticity of labor supply, the coefficient of relative risk aversion, and steady state distortions.

Schooling supply and the structure of production: Evidence from US States 1950-1990

We find that over the period 1950-1990, US states absorbed increases in the supplyof schooling due to tighter compulsory schooling and child labor laws mostly throughwithin-industry increases in the schooling intensity of production. Shifts in the industrycomposition towards more schooling-intensive industries played a less important role.To try and understand this finding theoretically, we consider a free trade model withtwo goods/industries, two skill types, and many regions that produce a fixed rangeof differentiated varieties of the same goods. We find that a calibrated version ofthe model can account for shifts in schooling supply being mostly absorbed throughwithin-industry increases in the schooling intensity of production even if the elasticityof substitution between varieties is substantially higher than estimates in the literature.