A Structural Analysis of the Health Expenditures and Portfolio Choices of Retired Agents

Richer and healthier agents tend to hold riskier portfolios and spend proportionally less on health expenditures. Potential explanations include health and wealth effects on preferences, expected longevity or disposable total wealth. Using HRS data, we perform a structural estimation of a dynamic model of consumption, portfolio and health expenditure choices with recursive utility, as well as health-dependent income and mortality risk. Our estimates of the deep parameters highlight the importance of health capital, mortality risk control, convex health and mortality adjustment costs and binding liquidity constraints to rationalize the stylized facts. They also provide new perspectives on expected longevity and on the values of life and health.

Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

Pliocene and Pleistocene diversification and multiple refugia in a Eurasian shrew (Crocidura suaveolens group).

We sequenced 998 base pairs (bp) of mitochondrial DNA cytochrome b and 799 bp of nuclear gene BRCA1 in the Lesser white-toothed shrew (Crocidura suaveolens group) over its geographic range from Portugal to Japan. The aims of the study were to identify the main clades within the group and respective refugia resulting from Pleistocene glaciations. Analyses revealed the Asian lesser white-toothed shrew (C. shantungensis) as the basal clade, followed by a major branch of C. suaveolens, subdivided sensu stricto into six clades, which split-up in the Upper Pliocene and Lower Pleistocene (1.9-0.9 Myr). The largest clade, occurring over a huge range from east Europe to Mongolia, shows evidence of population expansion after a bottleneck. West European clades originated from Iberian and Italo-Balkanic refugia. In the Near East, three clades evolved in an apparent hotspot of refugia (west Turkey, south-west and south-east of the Caucasus). Most clades include specimens of different morphotypes and the validity of many taxa in the C. suaveolens group has to be re-evaluated.

Trait decoupling promotes evolutionary diversification of the trophic and acoustic system of damselfishes.

Trait decoupling, wherein evolutionary release of constraints permits specialization of formerly integrated structures, represents a major conceptual framework for interpreting patterns of organismal diversity. However, few empirical tests of this hypothesis exist. A central prediction, that the tempo of morphological evolution and ecological diversification should increase following decoupling events, remains inadequately tested. In damselfishes (Pomacentridae), a ceratomandibular ligament links the hyoid bar and lower jaws, coupling two main morphofunctional units directly involved in both feeding and sound production. Here, we test the decoupling hypothesis by examining the evolutionary consequences of the loss of the ceratomandibular ligament in multiple damselfish lineages. As predicted, we find that rates of morphological evolution of trophic structures increased following the loss of the ligament. However, this increase in evolutionary rate is not associated with an increase in trophic breadth, but rather with morphofunctional specialization for the capture of zooplanktonic prey. Lineages lacking the ceratomandibular ligament also shows different acoustic signals (i.e. higher variation of pulse periods) from others, resulting in an increase of the acoustic diversity across the family. Our results support the idea that trait decoupling can increase morphological and behavioural diversity through increased specialization rather than the generation of novel ecotypes.

Comprendre les mécanismes des migrations « glo-balles » africaines. Les trajectoires transnationales et la diversification des filières

L'article décrypte certains rouages de l'expatriation des joueurs africains vers l'Europe. La précocité de leur migration et la fragmentation de leur trajectoire sont expliquées par les spéculations dont ils font l'objet. Les réseaux socio-économiques qui portent les filières spéculatives sont mis en lumière, ce qui permet de comprendre en particulier le rôle primordial qu'y jouent les clubs intermédiaires européens, et maintenant asiatiques, intermédiaires dans la chaîne à haute valeur ajoutée, au « taux d'éviction » le plus élevé du monde. This paper decodes various workings at play in the expatriation of African players to Europe. The early nature of their migration and the fragmentation of their trajectories are explained by the speculation that surrounds them. The socio-economic networks that carry speculative channels are brought to light, which helps us to understand in particular the major role played by the European, and now Asian, clubs, which serve as intermediaries in the high value-added chain, with the highest "eviction rate" in the world.

Proto-South-East Asia as a trigger of early angiosperm diversification

Darwin described as an 'abominable mystery' the abrupt origin of angiosperms in the mid-Cretaceous and the high diversification rates in their early history. The father of evolutionary theory could not fathom this rapid diversification and rather invoked that 'there was during long ages a small isolated continent in the S. hemisphere, which served as the birthplace of the higher plants'. In this essay, we comment on the spatial origin of angiosperms, but focus primarily on understanding the abiotic factors that promoted the early diversification of angiosperms by reviewing palaeobotanical, palaeogeographical, phylogenetics and biogeographical evidence. We argue that islands located in the region today occupied by South-East Asia played a major role in angiosperm diversification during the Late Jurassic and Early Cretaceous.

Three essays in financial economics: asset pricing, optimal portfolio selection and financial integration

Executive Summary The unifying theme of this thesis is the pursuit of a satisfactory ways to quantify the riskureward trade-off in financial economics. First in the context of a general asset pricing model, then across models and finally across country borders. The guiding principle in that pursuit was to seek innovative solutions by combining ideas from different fields in economics and broad scientific research. For example, in the first part of this thesis we sought a fruitful application of strong existence results in utility theory to topics in asset pricing. In the second part we implement an idea from the field of fuzzy set theory to the optimal portfolio selection problem, while the third part of this thesis is to the best of our knowledge, the first empirical application of some general results in asset pricing in incomplete markets to the important topic of measurement of financial integration. While the first two parts of this thesis effectively combine well-known ways to quantify the risk-reward trade-offs the third one can be viewed as an empirical verification of the usefulness of the so-called "good deal bounds" theory in designing risk-sensitive pricing bounds. Chapter 1 develops a discrete-time asset pricing model, based on a novel ordinally equivalent representation of recursive utility. To the best of our knowledge, we are the first to use a member of a novel class of recursive utility generators to construct a representative agent model to address some long-lasting issues in asset pricing. Applying strong representation results allows us to show that the model features countercyclical risk premia, for both consumption and financial risk, together with low and procyclical risk free rate. As the recursive utility used nests as a special case the well-known time-state separable utility, all results nest the corresponding ones from the standard model and thus shed light on its well-known shortcomings. The empirical investigation to support these theoretical results, however, showed that as long as one resorts to econometric methods based on approximating conditional moments with unconditional ones, it is not possible to distinguish the model we propose from the standard one. Chapter 2 is a join work with Sergei Sontchik. There we provide theoretical and empirical motivation for aggregation of performance measures. The main idea is that as it makes sense to apply several performance measures ex-post, it also makes sense to base optimal portfolio selection on ex-ante maximization of as many possible performance measures as desired. We thus offer a concrete algorithm for optimal portfolio selection via ex-ante optimization over different horizons of several risk-return trade-offs simultaneously. An empirical application of that algorithm, using seven popular performance measures, suggests that realized returns feature better distributional characteristics relative to those of realized returns from portfolio strategies optimal with respect to single performance measures. When comparing the distributions of realized returns we used two partial risk-reward orderings first and second order stochastic dominance. We first used the Kolmogorov Smirnov test to determine if the two distributions are indeed different, which combined with a visual inspection allowed us to demonstrate that the way we propose to aggregate performance measures leads to portfolio realized returns that first order stochastically dominate the ones that result from optimization only with respect to, for example, Treynor ratio and Jensen's alpha. We checked for second order stochastic dominance via point wise comparison of the so-called absolute Lorenz curve, or the sequence of expected shortfalls for a range of quantiles. As soon as the plot of the absolute Lorenz curve for the aggregated performance measures was above the one corresponding to each individual measure, we were tempted to conclude that the algorithm we propose leads to portfolio returns distribution that second order stochastically dominates virtually all performance measures considered. Chapter 3 proposes a measure of financial integration, based on recent advances in asset pricing in incomplete markets. Given a base market (a set of traded assets) and an index of another market, we propose to measure financial integration through time by the size of the spread between the pricing bounds of the market index, relative to the base market. The bigger the spread around country index A, viewed from market B, the less integrated markets A and B are. We investigate the presence of structural breaks in the size of the spread for EMU member country indices before and after the introduction of the Euro. We find evidence that both the level and the volatility of our financial integration measure increased after the introduction of the Euro. That counterintuitive result suggests the presence of an inherent weakness in the attempt to measure financial integration independently of economic fundamentals. Nevertheless, the results about the bounds on the risk free rate appear plausible from the view point of existing economic theory about the impact of integration on interest rates.

Ecological and historical drivers of diversification in the fly genus Chiastocheta Pokorny.

Coevolution is among the main forces shaping the biodiversity on Earth. In Eurasia, one of the best-known plant-insect interactions showing highly coevolved features involves the fly genus Chiastocheta and its host-plant Trollius. Although this system has been widely studied from an ecological point of view, the phylogenetic relationships and biogeographic history of the flies have remained little investigated. In this integrative study, we aim to test the monophyly of the five Chiastocheta eco-morphological groups, defined by Pellmyr in 1992, by inferring a mitochondrial phylogeny. We further apply a new approach to assess the effect of (i) different molecular substitution rates and (ii) phylogenetic uncertainty on the inference of the spatio-temporal evolution of the group. From a taxonomic point of view, we demonstrate that only two of Pellmyr's groups (rotundiventris and dentifera) are phylogenetically supported, the other species appearing para- or polyphyletic. We also identify the position of C. lophota, which was not included in previous surveys. From a spatio-temporal perspective, we show that the genus arose during the Pliocene in Europe. Our results also indicate that at least four large-scale dispersal events are required to explain the current distribution of Chiastocheta. Moreover, each dispersal to or from Asia is associated with a host-shift and seems to correspond to an increase in speciation rates. Finally, we highlight the correlation between diversification and climatic fluctuations, which indicate that the cycles of global cooling over the last million years had an influence on the radiation of the group.

Effects of a fire response trait on diversification in replicated radiations.

Fire has been proposed as a factor explaining the exceptional plant species richness found in Mediterranean regions. A fire response trait that allows plants to cope with frequent fire by either reseeding or resprouting could differentially affect rates of species diversification. However, little is known about the generality of the effects of differing fire response on species evolution. We study this question in the Restionaceae, a family that radiated in Southern Africa and Australia. These radiations occurred independently and represent evolutionary replicates. We apply Bayesian approaches to estimate trait-specific diversification rates and patterns of climatic niche evolution. We also compare the climatic heterogeneity of South Africa and Australia. Reseeders diversify faster than resprouters in South Africa, but not in Australia. We show that climatic preferences evolve more rapidly in reseeder lineages than in resprouters and that the optima of these climatic preferences differ between the two strategies. We find that South Africa is more climatically heterogeneous than Australia, independent of the spatial scale we consider. We propose that rapid shifts between states of the fire response trait promote speciation by separating species ecologically, but this only happens when the landscape is sufficiently heterogeneous.

Pliocene and Pleistocene diversification and multiple refugia in a Eurasian shrew (Crocidura suaveolens group).

We sequenced 998 base pairs (bp) of mitochondrial DNA cytochrome b and 799 bp of nuclear gene BRCA1 in the Lesser white-toothed shrew (Crocidura suaveolens group) over its geographic range from Portugal to Japan. The aims of the study were to identify the main clades within the group and respective refugia resulting from Pleistocene glaciations. Analyses revealed the Asian lesser white-toothed shrew (C. shantungensis) as the basal clade, followed by a major branch of C. suaveolens, subdivided sensu stricto into six clades, which split-up in the Upper Pliocene and Lower Pleistocene (1.9-0.9 Myr). The largest clade, occurring over a huge range from east Europe to Mongolia, shows evidence of population expansion after a bottleneck. West European clades originated from Iberian and Italo-Balkanic refugia. In the Near East, three clades evolved in an apparent hotspot of refugia (west Turkey, south-west and south-east of the Caucasus). Most clades include specimens of different morphotypes and the validity of many taxa in the C. suaveolens group has to be re-evaluated.

Evolution of the ferric reductase domain (FRD) superfamily: modularity, functional diversification, and signature motifs.

A heme-containing transmembrane ferric reductase domain (FRD) is found in bacterial and eukaryotic protein families, including ferric reductases (FRE), and NADPH oxidases (NOX). The aim of this study was to understand the phylogeny of the FRD superfamily. Bacteria contain FRD proteins consisting only of the ferric reductase domain, such as YedZ and short bFRE proteins. Full length FRE and NOX enzymes are mostly found in eukaryotic cells and all possess a dehydrogenase domain, allowing them to catalyze electron transfer from cytosolic NADPH to extracellular metal ions (FRE) or oxygen (NOX). Metazoa possess YedZ-related STEAP proteins, possibly derived from bacteria through horizontal gene transfer. Phylogenetic analyses suggests that FRE enzymes appeared early in evolution, followed by a transition towards EF-hand containing NOX enzymes (NOX5- and DUOX-like). An ancestral gene of the NOX(1-4) family probably lost the EF-hands and new regulatory mechanisms of increasing complexity evolved in this clade. Two signature motifs were identified: NOX enzymes are distinguished from FRE enzymes through a four amino acid motif spanning from transmembrane domain 3 (TM3) to TM4, and YedZ/STEAP proteins are identified by the replacement of the first canonical heme-spanning histidine by a highly conserved arginine. The FRD superfamily most likely originated in bacteria.

Constitution, Diversification and Normalisation of a Health Problem: Organising the Fight against AIDS in Switzerland (1984-2005)

The article traces the formation, diversification and normalization of the AIDS cause in Switzerland. Particular emphasis is placed on interactions between the medical field, public authorities and associative space, the latter being understood as the place where individual and collective actors compete to define the cause. The authors argue that the major phases in the structuring of the struggle, the pace of state intervention and the creation of a multi-organizational field, can only be understood if one adopts a 'configurational perspective' attentive to the manner in which, in a given context and under the effect of particular constraints, key actors strategically interact and contribute to transforming their environment and their chances of reaching their goals. This approach takes into account the changing socio-biological characteristics of those who have committed themselves to the cause. In turn, internal movement divisions about how to respond to the epidemic as well as the changing perceptions of the disease have modified the opportunities for commitment, encouraging certain individual kinds of people and excluding others.

International Expansion, Diversification and Regulated Firm Nonmarket Strategy

Previous studies have shown that regulated firms diversify for reasons that are different than for unregulated firms. We explore some of these differences by providing a theoretical model that starts by considering the firm-regulator relationship as an incomplete information issue, in which a regulated incumbent has knowledge that the regulator does not have, but the firm cannot convey hard information about this knowledge. The incumbent faces both market and nonmarket competition from a new entrant. In that context, we show that when the firm faces tough nonmarket competition domestically, going abroad can create a mechanism that makes information transmission to the regulator more credible. International expansion can thus be a way to solve domestic nonmarket issues in addition to being a catalyst for growth.