The intra-industry trade for a high-income country: new empirical evidence for Italy

This paper examines the determinants of Italian intra-industry trade in horizontally and vertically differentiated products, using a dataset which eliminates the effects linked to the hypothesis of homogeneity both between countries - when specific industry characteristics are analysed - and between sectors - within the same country. In this way, within limits, we have tried to address an issue raised by Greenaway et al. in 1999 which, in the light of the current state of the literature on intra-industry trade, does not seem to have been explicitly dealt with. Our paper highlights how strong the impact of this hypothesis could be in the analyses of the determinants of intraindustry trade in the case of Italy.

Longitudinal analysis of income-related health inequality

This paper considers the characterisation and measurement of income-related health inequality using longitudinal data. The paper elucidates the nature of the Jones and Lopez Nicholas (2004) index of “health-related income mobility” and explains the negative values of the index that have been reported in all the empirical applications to date. The paper further questions the value of their index to health policymakers and proposes an alternative index of “income-related health mobility” that measures whether the pattern of health changes is biased in favour of those with initially high or low incomes. We illustrate our work by investigating mobility in the General Health Questionnaire measure of psychological well-being over the first nine waves of the British Household Panel Survey from 1991 to 1999.

Is the consumption-income ratio stationary? Evidence from linear and nonlinear panel unit root tests for OECD and non-OECD countries

This paper applies recently developed heterogeneous nonlinear and linear panel unit root tests that account for cross-sectional dependence to 24 OECD and 33 non-OECD countries’ consumption-income ratios over the period 1951–2003. We apply a recently developed methodology that facilitates the use of panel tests to identify which individual cross-sectional units are stationary and which are nonstationary. This extends evidence provided in the recent literature to consider both linear and nonlinear adjustment in panel unit root tests, to address the issue of cross-sectional dependence, and to substantially expand both time-series and cross sectional dimensions of the data analysed. We find that the majority (65%) of the series are nonstationary with slightly fewer OECD countries’ (61%) series exhibiting a unit root than non-OECD countries (68%).

On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective

The paper employs a rank-dependent formulation of the social welfare function with time-separable utilities to evaluate the economic consequences of income mobility from an ex-ante perspective. The resultant class of measures can be decomposed not only in terms of structural and exchange mobility but also in terms of vertical and horizontal mobility, thereby encompassing two of the main approaches in the literature. We illustrate our measurement framework by comparing mobility in the USA and Germany using data from the Cross-National Equivalent File 1980-2005. We find that the pattern of income mobility in the USA was both less pro-poor and more horizontally inequitable than in Germany, but that the latter did not translate into higher levels of exchange mobility given higher levels of absolute inequality and the vertical stance of the growth process.

Adaptation or Social Comparison? The effects of income on happiness.

Two mechanisms have attracted considerable attention from researchers studying the effects of income on happiness: adaptation and social comparison. In this paper we study both mechanisms using a panel of British households. Besides dealing with the UK case in detail, the paper contributes to the literature by considering the two mecha- nisms together and testing for them both separately and jointly. Our results strongly support the existence of adaptation effects but find only weak evidence in favour of social comparison.

Inverted Haavelmo Effects in a General Equilibrium Analysis of the Impact of Implementing the Scottish Variable Rate of Income Tax.

The Scottish Parliament has the authority to make a balanced-budget expansion or contraction in public expenditure, funded by corresponding local changes in the basic rate of income tax of up to 3p in the pound. This fiscal adjustment is known as the Scottish Variable Rate of income tax, though it has never, as yet, been used. In this paper we attempt to identify the impact on aggregate economic activity in Scotland of implementing these devolved fiscal powers. This is achieved through theoretical analysis and simulation using a Computable General Equilibrium (CGE) model for Scotland. This analysis generalises the conventional Keynesian model so that negative balanced-budget multipliers values are possible, reflecting a regional “inverted Haavelmo effect”. Key parameters determining the aggregate economic impact are the extent to which the Scottish Government create local amenities valuable to the Scottish population and the extent to which this is incorporated into local wage bargaining.

The Role of Institutions in Cross-Section Income and Panel Data Growth Models: A Deeper Investigation on the Weakness and Proliferation of Instruments

This paper investigates the role of institutions in determining per capita income levels and growth. It contributes to the empirical literature by using different variables as proxies for institutions and by developing a deeper analysis of the issues arising from the use of weak and too many instruments in per capita income and growth regressions. The cross-section estimation suggests that institutions seem to matter, regardless if they are the only explanatory variable or are combined with geographical and integration variables, although most models suffer from the issue of weak instruments. The results from the growth models provides some interesting results: there is mixed evidence on the role of institutions and such evidence is more likely to be associated with law and order and investment profile; government spending is an important policy variable; collapsing the number of instruments results in fewer significant coefficients for institutions.

Improving Students’ Learning Aspirations Beyond Post-Primary Education: A First Account of Two Non-Formal Education Programmes in Middle-Income

Non-formal education programmes are active in a number of developing countries. These programmes offer vulnerable students an opportunity to pursue their education although they were excluded for various reasons from the formal education systems. This paper examines the impact of two programmes (one in Mauritius, and one in Thailand) on their participants’ aspirations towards learning. We develop a methodology to measure the perception of students regarding their learning experience. More than a third of them, for example, believe that there is no barrier to their education. Most acknowledge the role of their teachers in raising their aspirations towards their educational achievement. When compared to male students, female students seem to value more the role of their education.

The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Scottish Economy under Devolution: Homogeneity or Heterogeneity?

Comparing each of the twenty Higher Education Institutions (HEIs) in Scotland as separate sectors in an Input-Output table suggests their expenditure patterns are homogenous and that the apparent heterogeneity of their impacts is primarily driven by scale. However, a disaggregation of their income by source reveals a disparity in their dependence upon funding from the devolved Scottish Government and their ability to draw in income/funding from external sources. Acknowledging the binding budget constraint of the Scottish Government and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact of HEIs upon the Scottish economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic as we do not know whether public and external incomes are complements or substitutions (and indeed this may vary between individual HEIs).

Longitudinal analysis of income-related health inequality: welfare foundations and alternative measures

This paper elaborates the approach to the longitudinal analysis of income-related health inequalities first proposed in Allanson, Gerdtham and Petrie (2010). In particular, the paper establishes the normative basis of their mobility indices by embedding their decomposition of the change in the health concentration index within a broader analysis of the change in “health achievement” or wellbeing. The paper further shows that their decomposition procedure can also be used to analyse the change in a range of other commonly-used incomerelated health inequality measures, including the generalised concentration index and the relative inequality index. We illustrate our work by extending their investigation of mobility in the General Health Questionnaire measure of psychological well-being over the first nine waves of the British Household Panel Survey from 1991 to 1999.

The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Welsh Economy: Homogeneity or Heterogeneity?

This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010a) for the case of Wales in order to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of Welsh HEIs. When we treat each of the twelve Higher Education Institutions (HEIs) that existed in Wales in 2006 as separate sectors in conventional input-output analysis, their expenditure impacts per unit of final demand appear rather homogenous, with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of their income by source reveals considerable variation in their dependence upon funding from the devolved Welsh Assembly Government and their ability to draw in income/funding from external sources. Acknowledging the binding budget constraint of the Welsh Assembly Government and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact of HEIs upon the Welsh economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify.

Disaggregating the Household Sector in a 2004 UK Input Output Table and Social Accounting Matrix by Income Quintiles

This paper disaggregates a UK Input-Output (IO) table for 2004 based on household income quintiles from published survey data. In addition to the Input-Output disaggregation, the household components of a UK Income Expenditure (I-E) account used to inform a Social Accounting Matrix (SAM),have also been disaggregated by household income quintile. The focus of this paper is on household expenditure on the UK energy sector.

Accounting for the dead in the longitudinal analysis of income-related health inequalities

This paper develops an accounting framework to consider the effect of deaths on the longitudinal analysis of income-related health inequalities. Ignoring deaths or using inverse probability weights (IPWs) to re-weight the sample for mortality-related attrition can produce misleading results, since to do so would be to disregard the most extreme of all health outcomes. Incorporating deaths into the longitudinal analysis of income-related health inequalities provides a more complete picture in terms of the evaluation of health changes in respect to socioeconomic status. We illustrate our work by investigating health mobility in Quality Adjusted Life Years (QALYs) as measured by the SF6D from 1999 till 2004 using the British Household Panel Survey (BHPS). We show that for Scottish males explicitly accounting for the dead, rather than using IPWs to account for mortality-related attrition, changes the direction of the relationship between relative health changes and initial income position, while for other population groups it increases the strength of this relationship by up to 14 times. When deaths are explicitly incorporated into the analysis it is found that over this five year period for both Scotland and England & Wales the relative health changes were significantly regressive such that the poor experienced a larger share of the health losses relative to their initial share of health and a large amount of this was related to mortality.

The Expenditure Impacts of London-based Individual Higher Education Institutions (HEIs) and their Students on the Economy of England: Homogeneity or Heterogeneity?

This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010a) to identify the impact of London-based HEIs on the English economy in order to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of London HEIs. When we treat each of the 38 London-based Higher Education Institutions (HEIs) that existed in England in 2006 as separate sectors in conventional input-output analysis, their expenditure impacts per unit of final demand appear rather homogenous (though less so than HEIs in Wales and Scotland), with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of their income by source reveals considerable variation in their dependence upon general public funding and their ability to draw in income/funding from external sources. Acknowledging the possible alternative uses of the public funding and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact of London HEIs upon the English economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify.

The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Northern Irish Economy: Homogeneity or Heterogeneity?

This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010a) for the case of Northern Ireland in order to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of Northern-Irish HEIs. When we treat each of the four Higher Education Institutions (HEIs) that existed in Northern Ireland in 2006 as separate sectors in conventional input-output analysis, their expenditure impacts per unit of final demand appear rather homogenous, with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of their income by source reveals considerable variation in their dependence upon funding from the devolved Assembly and their ability to draw in income/funding from external sources. Acknowledging the binding budget constraint of the Northern Ireland Assembly and deriving balanced expenditure multipliers reveals large differences in the netexpenditure impact of HEIs upon the Northern Irish economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify.