Banking psychographics: an Indian empirical study

India has been witnessing an economic boom which fuelling a huge growth in the financial sector especially the banks. The spending power and consumerism has been increasing along with the growth in GDP. The numbers of banks are around 3000 (data according to Reserve Bank of India). With a population base of close to 1.1 billion and a diverse culture that has been dictating the mindset and lifestyle of the population, it has been a challenge for the banks to understand the customer better and hence a the need of the hour is a proper psychographic study of retail banking customers.

Does spatial clustering help explaining differences in the inequality of income distribution? : evidence from Argentina

Resumen: Este artículo analiza la relación entre la agrupación espacial de la distribución del ingreso y la desigualdad en las provincias de Argentina. El objetivo de este trabajo es usar técnicas espaciales para analizar hasta que punto la agrupación espacial de la distribución del ingreso afecta la desigualdad de la distribución del ingreso en un contexto regional de Argentina. En general, la literatura de desigualdad implícitamente considera a cada región o provincia como una entidad independiente y el potencial para la observación de la interacción a través del espacio a menudo se ha ignorado. Mientras tanto, la autocorrelación espacial ocurre cuando la distribución espacial de la variable de interés exhibe un patrón sistemático. Yo computo tres medidas de autocorrelación espacial global: La I de Moran, c de Geary, y G de Getis y Ord, como grado de CLUSTERING provincial entre 1991 y 2002. La principal conclusión del trabajo es que hay evidencia que provincias con desigualdad relativamente alta (baja) tienden a ser localizadas cerca de otras provincias con alta (baja) desigualdad más a menudo de lo esperado debido al azar. Por ende cada provincia no debería ser vista como una observación independiente, como ha sido supuesto implícitamente en estudios previos sobre la desigualdad de ingresos regional.

Income risk of EU coal-fired power plants after Kyoto

Coal-fired power plants may enjoy a significant advantage relative to gas plants in terms of cheaper fuel cost. Still, this advantage may erode or even turn into disadvantage depending on CO2 emission allowance price. This price will presumably rise in both the Kyoto Protocol commitment period (2008-2012) and the first post-Kyoto years. Thus, in a carbon-constrained environment, coal plants face financial risks arising in their profit margins, which in turn hinge on their so-called "clean dark spread". These risks are further reinforced when the price of the output electricity is determined by natural gas-fired plants' marginal costs, which differ from coal plants' costs. We aim to assess the risks in coal plants' margins. We adopt parameter values estimated from empirical data. These in turn are derived from natural gas and electricity markets alongside the EU ETS market where emission allowances are traded. Monte Carlo simulation allows to compute the expected value and risk profile of coal-based electricity generation. We focus on the clean dark spread in both time periods under different future scenarios in the allowance market. Specifically, bottom 5% and 10% percentiles are derived. According to our results, certain future paths of the allowance price may impose significant risks on the clean dark spread obtained by coal plants.

Does Immigration Raise Natives’ Income? National and Regional Evidence from Spain

How immigration affects the labor market of the host country is a topic of major concern for many immigrant-receiving nations. Spain is no exception following the rapid increase in immigrant flows experienced over the past decade. We assess the impact of immigration on Spanish natives’ income by estimating the net immigration surplus accruing at the national level and at high immigrant-receiving regions while taking into account the imperfect substitutability of immigrant and native labor. Specifically, using information on the occupational densities of immigrants and natives of different skill levels, we develop a mapping of immigrant-to-native self-reported skills that reveals the combination of natives across skills that would be equivalent to an immigrant of a given self-reported skill level, which we use to account for any differences between immigrant self-reported skill levels and their effective skills according to the Spanish labor market. We find that the immigrant surplus amounts to 0.04 percent of GDP at the national level and it is even higher for some of the main immigrant-receiving regions, such as Cataluña, Valencia, Madrid, and Murcia.

Going Multinational under Exchange Rate Uncertainty

Published as an article in: Journal of International Money and Finance, 2010, vol. 29, issue 6, pages 1171-1191.

Income Taxation and Growth in an OLG Economy: Does Aggregate Uncertainty Play any Role?

We analyze the effects of capital income taxation on long-run growth in a stochastic, two-period overlapping generations economy. Endogenous growth is driven by a positive externality of physical capital in the production sector that makes firms exhibit an aggregate technology in equilibrium. We distinguish between capital income and labor income, and between attitudes towards risk and intertemporal substitution of consumption. We show necessary and sufficient conditions such that i) increments in the capital income taxation lead to higher equilibrium growth rates, and ii) the effect of changes in the capital income tax rate on the equilibrium growth may be of opposite signs in stochastic and in deterministic economies. Such a sign reversal is shown to be more likely depending on i) how the intertemporal elasticity of substitution compares to one, and ii) the size of second- period labor supply. Numerical simulations show that for reasonable values of the intertemporal elasticity of substitution, a sign reversal shows up only for implausibly high values of the second- period’s labor supply. The conclusion is that deterministic OLG economies are a good approximation of the effect of taxes on the equilibrium growth rate as in Smith (1996).