Testing consumption optimality using aggregate data

The objective of this paper is to test for optimality of consumption decisions at the aggregate level (representative consumer) taking into account popular deviations from the canonical CRRA utility model rule of thumb and habit. First, we show that rule-of-thumb behavior in consumption is observational equivalent to behavior obtained by the optimizing model of King, Plosser and Rebelo (Journal of Monetary Economics, 1988), casting doubt on how reliable standard rule-of-thumb tests are. Second, although Carroll (2001) and Weber (2002) have criticized the linearization and testing of euler equations for consumption, we provide a deeper critique directly applicable to current rule-of-thumb tests. Third, we show that there is no reason why return aggregation cannot be performed in the nonlinear setting of the Asset-Pricing Equation, since the latter is a linear function of individual returns. Fourth, aggregation of the nonlinear euler equation forms the basis of a novel test of deviations from the canonical CRRA model of consumption in the presence of rule-of-thumb and habit behavior. We estimated 48 euler equations using GMM, with encouraging results vis-a-vis the optimality of consumption decisions. At the 5% level, we only rejected optimality twice out of 48 times. Empirical-test results show that we can still rely on the canonical CRRA model so prevalent in macroeconomics: out of 24 regressions, we found the rule-of-thumb parameter to be statistically signi cant at the 5% level only twice, and the habit ƴ parameter to be statistically signi cant on four occasions. The main message of this paper is that proper return aggregation is critical to study intertemporal substitution in a representative-agent framework. In this case, we fi nd little evidence of lack of optimality in consumption decisions, and deviations of the CRRA utility model along the lines of rule-of-thumb behavior and habit in preferences represent the exception, not the rule.

Testing consumption optimality using aggregate data

This paper tests the optimality of consumption decisions at the aggregate level taking into account popular deviations from the canonical constant-relative-risk-aversion (CRRA) utility function model-rule of thumb and habit. First, based on the critique in Carroll (2001) and Weber (2002) of the linearization and testing strategies using euler equations for consumption, we provide extensive empirical evidence of their inappropriateness - a drawback for standard rule- of-thumb tests. Second, we propose a novel approach to test for consumption optimality in this context: nonlinear estimation coupled with return aggregation, where rule-of-thumb behavior and habit are special cases of an all encompassing model. We estimated 48 euler equations using GMM. At the 5% level, we only rejected optimality twice out of 48 times. Moreover, out of 24 regressions, we found the rule-of-thumb parameter to be statistically significant only twice. Hence, lack of optimality in consumption decisions represent the exception, not the rule. Finally, we found the habit parameter to be statistically significant on four occasions out of 24.

The role of consumer's risk aversion on price rigidity

This paper aims at contributing to the research agenda on the sources of price stickiness, showing that the adoption of nominal price rigidity may be an optimal firms' reaction to the consumers' behavior, even if firms have no adjustment costs. With regular broadly accepted assumptions on economic agents behavior, we show that firms' competition can lead to the adoption of sticky prices as an (sub-game perfect) equilibrium strategy. We introduce the concept of a consumption centers model economy in which there are several complete markets. Moreover, we weaken some traditional assumptions used in standard monetary policy models, by assuming that households have imperfect information about the ineflicient time-varying cost shocks faced by the firms, e.g. the ones regarding to inefficient equilibrium output leveIs under fiexible prices. Moreover, the timing of events are assumed in such a way that, at every period, consumers have access to the actual prices prevailing in the market only after choosing a particular consumption center. Since such choices under uncertainty may decrease the expected utilities of risk averse consumers, competitive firms adopt some degree of price stickiness in order to minimize the price uncertainty and fi attract more customers fi.'

A consumption CAPM with a reference level

We study an intertemporal asset pricing model in which a representative consumer maximizes expected utility derived from both the ratio of his consumption to some reference level and this level itself. If the reference consumption level is assumed to be determined by past consumption levels, the model generalizes the usual habit formation specifications. When the reference level growth rate is made dependent on the market portfolio return and on past consumption growth, the model mixes a consumption CAPM with habit formation together with the CAPM. It therefore provides, in an expected utility framework, a generalization of the non-expected recursive utility model of Epstein and Zin (1989). When we estimate this specification with aggregate per capita consumption, we obtain economically plausible values of the preference parameters, in contrast with the habit formation or the Epstein-Zin cases taken separately. All tests performed with various preference specifications confirm that the reference level enters significantly in the pricing kernel.

Do equity and foreign currency risk premiums display common patterns?

In da Costa et al. (2006) we have shown how a same pricing kernel can account for the excess returns of the S&:P500 over the US short term bond and of the uncovered over the covered trading of foreign government bonds. In this paper we estimate and test the overidentifying restrictiom; of Euler equations associated with "ix different versions of the Consumption Capital Asset Pricing I\Iodel. Our main finding is that the same (however often unreasonable) values for the parameters are estimated for ali models in both nmrkets. In most cases, the rejections or otherwise of overidentifying restrictions occurs for the two markets, suggesting that success and failure stories for the equity premium repeat themselves in foreign exchange markets. Our results corroborate the findings in da Costa et al. (2006) that indicate a strong similarity between the behavior of excess returns in the two markets when modeled as risk premiums, providing empirical grounds to believe that the proposed preference-based solutions to puzzles in domestic financiaI markets can certainly shed light on the Forward Premium Puzzle.

Nonparametric tail risk, macroeconomics and stock returns: predictability and risk premia

This paper proposes a new novel to calculate tail risks incorporating risk-neutral information without dependence on options data. Proceeding via a non parametric approach we derive a stochastic discount factor that correctly price a chosen panel of stocks returns. With the assumption that states probabilities are homogeneous we back out the risk neutral distribution and calculate five primitive tail risk measures, all extracted from this risk neutral probability. The final measure is than set as the first principal component of the preliminary measures. Using six Fama-French size and book to market portfolios to calculate our tail risk, we find that it has significant predictive power when forecasting market returns one month ahead, aggregate U.S. consumption and GDP one quarter ahead and also macroeconomic activity indexes. Conditional Fama-Macbeth two-pass cross-sectional regressions reveal that our factor present a positive risk premium when controlling for traditional factors.

Modifiable risk factors for overweight and obesity in children and adolescents from São Paulo, Brazil

Background: Brazil is currently experiencing a nutrition transition: the displacement of traditional diets with foods high in saturated fat, sodium, and cholesterol and an increase in sedentary lifestyles. Despite these trends, our understanding of child obesity in Brazil is limited. Thus, the aims of this study were (1) to investigate the current prevalence of overweight and obesity in a large sample of children and adolescents living in São Paulo, Brazil, and (2) to identify the lifestyle behaviors associated with an increased risk of obesity in young Brazilians.Methods: A total of 3,397 children and adolescents (1,596 male) aged 7-18 years were randomly selected from 22 schools in São Paulo, Brazil. Participants were classified as normal weight, overweight, or obese based on international age-and sex-specific body mass index thresholds. Selected sociodemographic, physical activity, and nutrition behaviors were assessed via questionnaire.Results: Overall, 19.4% of boys and 16.1% of girls were overweight while 8.9% and 4.3% were obese. Two-way analysis of variance revealed that the prevalence of overweight and obesity was significantly higher in boys and in younger children when compared to girls and older children, respectively (P < 0.05 for both). Logistic regression analysis revealed that overweight was associated with more computer usage, parental encouragement to be active, and light soft drink consumption after controlling for differences in sex, age, and parental education (P < 0.05 for all). Conversely, overweight was associated with less active transport to school, eating before sleep, and consumption of breakfast, full-sugar soft drinks, fried food and confectionery (P < 0.05 for all).Conclusions: Our results show that obesity in São Paulo children and adolescents has reached a level equivalent to that seen in many developed countries. We have also identified three key modifiable factors related to obesity that may be appropriate targets for future intervention in Brazilian youth: transport mode to school, computer usage, and breakfast consumption.

Mercury and DDT exposure risk to fish-eating human populations in Amazon

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Maintaining Tissue Perfusion in High-Risk Surgical Patients: A Systematic Review of Randomized Clinical Trials

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

Comparison of risk factors among blood donors, volunteers and replacement individuals, infected or not by hepatitis C virus

Hepatitis C is transmitted primarily parenterally by contaminated blood and is often associated with: intravenous drug abuse, invasive procedures, blood transfusions, acupuncture, tattooing, and alcohol and tobacco use. This study aimed to quantify and evaluate the risk factors among blood donors, volunteer blood donors and replacement individuals, infected or not by the C virus. The main transmission routes of C virus were identified in 55 men and 25 women (GI) monitored by the Ambulatory Unit of the Department of Tropical Diseases, Botucatu Medical School, and in 24 men and 26 women (GII), all active blood donors at the Bauru State Hospital Transfusional Agency. Both groups were similar in: tobacco and alcohol consumption, sexual behavior, tattooing and illicit drug use. The duration of alcohol and tobacco consumption and blood transfusions in GI were longer, whereas the option for steady partners, condom use, disposable materials and piercings were predominant in GII. In conclusion, the risk factors for hepatitis C demonstrate the necessity of health policies that act on the primary and secondary prevention levels (respectively, reduction of infection incidence and hepatopathy risk).

Associations between healthy eating patterns and indicators of metabolic risk in postmenopausal women

Background: Since human diets contain many components that may work synergistically to prevent or promote disease, assessing diet quality may be informative. The purpose of this study was to investigate the association between quality diet, by using Healthy Eating Index (HEI), and metabolic risk indicators in postmenopausal women.Methods: This cross-sectional study included a total of 173 Brazilian women, aged 45-75 years, seeking healthcare at a public outpatient center. Food consumption assessed by 24 h-recall food inquiry was used to calculate HEI scores: >80 implied diet good, 80-51 diet needed improvement, and <51 diet poor. Anthropometric data included: body mass index (BMI = weight/height(2)), waist-circumference (WC), body fat (%BF) and lean mass (%LM). Data on total cholesterol (TC), high density lipoprotein cholesterol (HDLC), low density lipoprotein cholesterol (LDLC), and triglycerides (TG) were also collected. Fisher's Exact test, and logistic regression method (to determine odds ratio, OR) were used in the statistical analysis.Results: Overweight and obesity were observed in 75.7% of the participants. Excessive %BF (> 35%) was observed in 56.1%, while %LM was reduced (<70%) in 78.1%. WC was elevated (= 88 cm) in 72.3%. Based on HEI values, diet quality was good in 3% (5/173), needed improvement in 48.5% (84/173), and was poor in 48.5% (84/173) of the cases. In this group, 75% of women had high intakes of lipids (> 35%), predominantly saturated and monounsaturated fat. on average, plasma TC, LDLC, and TG levels were higher than recommended in 57.2%, 79.2% and 45.1% of the women, respectively, while HDLC was low in 50.8%. There was association between HEI scores and the %BF that it was higher among women with HEI score < 80 (p = 0.021). There were not observed significant risk associations between HEI and lipid profile.Conclusion: Among the Brazilian postmenopausal women attending a public outpatient clinic, diet was considered to need improvement or to be of poor quality, attributed to high saturated fat ingestion, which probably caused a negative impact on metabolic risk indicators, namely body composition.

Cancer risk assessment of ethyl carbamate in alcoholic beverages from Brazil with special consideration to the spirits cachaca and tiquira

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Risk factors and presence of antibodies to Toxoplasma gondii in dogs from the coast of São Paulo State, Brazil

A toxoplasmose é causada por um protozoário parasita intracelular obrigatório, Toxoplasma gondii, e acomete vertebrados homeotérmicos incluindo animais de companhia e o homem. O cão apresenta importância epidemiológica por atuar como sentinela da infecção para o homem. O presente estudo objetivou determinar a ocorrência de anticorpos para T. gondii em 205 amostras de soro de cães do município de Ubatuba, SP, Brasil, pela reação de imunofluorescência indireta (RIFI), assim como os fatores de risco relacionados à infecção nos animais, como raça, idade, sexo, acesso a rua, ingestão de comida caseira, acesso a água não tratada e presença de roedores. 52/205 (25,4%) amostras foram positivas para toxoplasmose, com títulos variando de 16 a 256. Os resultados sorológicos apresentaram associação significativa (P<0,05) com consumo de comida caseira (45/118; 38,1%; IC95% 29,9%-47,2%) (OR=7,0; CI95% 3,0-16,6), e acesso a rua, em que aqueles que não tinham acesso a rua foram prevalentes (37/121; 30,6%; IC95% 23,1%-39,3%) (OR=0,5; CI95% 0,2-1,0). Estes resultados demonstram que a toxoplasmose na região está relacionada com problema de educação sanitária, principalmente quanto ao adequado cozimento dos alimentos, visto que a maioria dos animais positivos não apresentou associação significativa com presença de roedores ou consumo de água não tratada, porém os mesmos permaneciam em casa aos quais fora oferecida comida caseira. Portanto, a toxoplasmose consiste em um problema de saúde pública na região estudada, sendo necessárias medidas sanitárias para o controle da infecção, visto a estreita relação homem-cão e os fatores de risco presentes.

Cyclin D1 gene polymorphism as a risk factor for squamous cell carcinoma of the upper aerodigestive system in non-alcoholics

Squamous cell carcinoma of the upper aerodigestive tract (UADT) is associated with environmental factors, especially tobacco and alcohol consumption. Genetic factors, including cyclin D1 (CCND1) polymorphism have been suggested to play an important rote in tumorigenesis and progression of UADT cancer. To investigate the relationship between CCND1 polymorphism on susceptibility for UADT cancers, 147 cancer and 135 non-cancer subjects were included in this study. CCND1 genotype at codon 242(G870A) in exon 4 was undertaken using denaturing high performance liquid chromatography (DHPLC) and DNA sequencing. Significant odds ratio (OR) of the AA + GA genotypes [OR = 7.5 (95% Cl: 1.4-39.7)] was observed in non-drinkers but for non-smokers a non-significant [OR = 5.4 (95% Cl: 0.9-31.4)] was found in the adjusted model. These results suggest that allele A may be a risk factor for UADT cancer, especially in non-alcoholics. However, further epidemiological studies are needed to establish the exact role of CCND1 polymorphism and the development of UADT cancers. (C) 2004 Elsevier Ltd. All rights reserved.

Alcohol dehydrogenase 3 genotype as a risk factor for upper aerodigestive tract cancers

Objective: To assess alcohol dehydrogenase 3 (ADH3) polymorphism at position Ile349Val as indicator of risk factor for upper aerodigestive tract (UADT) cancer to verify its association with UADT cancer in nonalcoholic or nonsmoking individuals.Design: Cross-sectional study.Setting: Primary care or referral center.Patients: the study group consisted of 141 consecutive patients with newly diagnosed squamous cell carcinoma of the oral cavity, oropharynx, hypopharynx, or larynx admitted for surgical treatment. The comparison group consisted of 94 inpatients without cancer from the A. C. Camargo or other São Paulo (Brazil) hospital and 40 healthy individuals.Intervention: All participants were interviewed and data were collected using a structured questionnaire. After written informed consent was obtained, 20 mL of blood was collected in heparinized tubes.Main Outcome Measures: Odds ratio for ADH3 genotypes using logistic regression models.Results: After adjustment for sex, age, tobacco use, and history of cancer in first-degree family relatives, a significantly higher odds ratio for UADT cancer was observed among individuals with AA genotype and low cumulative alcohol consumption (:5 100 kg of ethanol) (odds ratio=3.8 [95% confidence interval, 1.5-9.7]). A 4-fold increase in odds ratio for UADT cancer among individuals with AA genotype and low tobacco consumption (:525 pack-years) was also found in the adjusted model.Conclusions: These results suggest that genotype AA may be a risk factor for UADT cancer, especially in individuals with low alcohol or tobacco consumption. However, further epidemiological case-control or cohort studies, preferably prospective, are needed to establish the exact role of ADH3 polymorphism and its association with the development of UADT cancers.