School composition effects in Spain

Drawing on PISA data of 2006, this study examines the impact of socio-economic school composition on science test score achievement for Spanish students in compulsory secondary schools. We define school composition in terms of the average parental human capital of students in the same school. These contextual peer effects are estimated using a semi-parametric methodology, which enables the spillovers to affect all the parameters of the educational production function. We also deal with the potential problem of self-selection of student into schools, using an artificial sorting that we argue to be independent from unobserved student’s abilities. The results indicate that the association between socio-economic school composition and test score results is clearly positive and significantly higher when computed with the semi-parametric approach. However, we find that the endogenous sorting of students into schools plays a fundamental role, given that the spillovers are significantly reduced when this selection process is ruled out from our measure of school composition effects. Specifically, the estimations suggest that the contextual peer effects are moderately positive only in those schools where the socio-economic composition is considerably elevated. In addition, we find some evidence of asymmetry of how the external effects and the sorting process actually operate, which seem affect in a different way males and females as well as high and low performance students.

Technology, business models and network structure in the airline industry

Network airlines have been increasingly focusing their operations on hub airports through the exploitation of connecting traffic, allowing them to take advantage of economies of traffic density, which are unequivocal in the airline industry. Less attention has been devoted to airlines? decisions on point-to-point thin routes, which could be served using different aircraft technologies and different business models. This paper examines, both theoretically and empirically, the impact on airlines ?networks of the two major innovations in the airline industry in the last two decades: the regional jet technology and the low-cost business model. We show that, under certain circumstances, direct services on point-to-point thin routes can be viable and thus airlines may be interested in deviating passengers out of the hub.

Is it redistribution or centralization? On the determinants of government investment in infrastructure

The dilemma efficiency versus equity, together with political partisan interests, has received increasing attention to explain the territorial allocation of investments. However, centralization intended to introduce or reinforce hierarchization in the political system has not been object as of now of empirical analysis. Our main contribution to the literature is providing evidence that meta-political objectives related to the ordering of political power and administration influence regional investment. In this way, we find evidence that network mode’s (roads and railways) investment programs are influenced by the centralization strategy of investing near to the political capital, while investment effort in no-network modes (airports and ports) appears to be positively related to distance. Since investment in surface transportation infrastructures is much higher than that in airports and ports, and taken into account that regions surrounding the political capital are poorer than the average, we suggest that centralization rather than redistribution has been the driver for the concentration of public investment on these regions.

What are the causes of educational inequalities and of their evolution over time in Europe? Evidence from PISA

This paper provides evidence on the sources of differences in inequalities in educational scores in European Union member states, by decomposing them into their determining factors. Using PISA data from the 2000 and 2006 waves, the paper shows that inequalities emerge in all countries and in both period, but decreased in Germany, whilst they increased in France and Italy. Decomposition shows that educational inequalities do not only reflect background related inequality, but especially schools’ characteristics. The findings allow policy makers to target areas that may make a contribution in reducing educational inequalities.

Why do educated mothers matter? A model of parental help

The paper investigates the role of mothers in affecting childrens' performance at school. It develops a theoretical model in which household is treated as an individual, whose utility depends on the performance at school of the student and on consumption. The model focuses on the possibilities through which mother’s help may affect pupil's performance in terms of time devoted to supervision and spillover effects. Empirical evidence, using Italian PISA 2006, shows that highly educated mothers have a positive impact on students' score only when they are highly qualified in the job market.

An empirical analysis of a merger between a network and low-cost airlines

We use a difference-in-difference estimator to examine the effects of a merger involving three airlines. The novelty lies in the examination of this operation in two distinct scenarios: (1) on routes where two low-cost carriers and (2) on routes where a network and one of the low-cost airlines had previously been competing. We report a reduction in frequencies but no substantial effect on prices in the first scenario, while in the second we report an increase in prices but no substantial effect on frequencies. These results may be attributed to the differences in passenger types flying on these routes.

What if there was a stronger pharmaceutical price competition in Spain? When regulation has a similar effect to collusion

This paper examines statins competition in the Spanish pharmaceutical market, where prices are highly regulated, and simulates a situation in which there is unrestricted price competition. A nested logit demand model is estimated with a panel of monthly data for pharmaceuticals prescribed from 1997 to 2005. The simulation indicates that the regulation of prices is similar in its effects to cooperation among producers, since the regulated prices are close to those that would be observed in a scenario of perfect collusion. Freedom to set prices and a regulatory framework with appropriate incentives would result in a general reduction in prices and may make the current veiled competition in the form of discounts to pharmacists become more visible. The decrease in prices would be partially offset by an increase in consumption but the net effect would be an overall decrease in expenditure. The counterfactual set-up would also lead to important changes in the market shares of both manufacturers and active ingredients, and a reversal of generic drugs. Therefore, pro-competitive regulation would be welfare-enhancing but would imply winners and losers.

Singling out individual inventors from patent data

An increasing number of studies have sprung up in recent years seeking to identify individual inventors from patent data. Different heuristics have been suggested to use their names and other information disclosed in patent documents in order to find out “who is who” in patents. This paper contributes to this literature by setting forth a methodology to identify them using patents applied to the European Patent Office (EPO hereafter). As in the large part of this literature, we basically follow a three-steps procedure: (1) the parsing stage, aimed at reducing the noise in the inventor’s name and other fields of the patent; (2) the matching stage, where name matching algorithms are used to group possible similar names; (3) the filtering stage, where additional information and different scoring schemes are used to filter out these potential same inventors. The paper includes some figures resulting of applying the algorithms to the set of European inventors applying to the EPO for a large period of time.

Generic drugs in Spain: price competition vs. moral hazard

This paper examines competition between generic and brand-name drugs in the regulated Spanish pharmaceutical market. A nested logit demand model is specified for the three most consumed therapeutic subgroups in Spain: statins (anticholesterol), selective serotonin reuptake inhibitors (antidepressants) and proton pump inhibitors (antiulcers). The model is estimated with instrumental variables from a panel of monthly prescription data from 1999 to 2005. The dataset distinguishes between three different levels of patients’ copayments within the prescriptions and the results show that the greater the level of insurance that the patient has (and therefore the lower the patient’s copayment), the lower the proportion of generic prescriptions made by physicians. It seems that the low level of copayment has delayed the penetration of generics into the Spanish market. Additionally, the estimation of the demand model suggests that the substitution rules and promotional efforts associated with the reference pricing system have increased generic market share, and that being among the first generic entrants has an additional positive effect.

¿Afecta la sobreeducación de los padres al rendimiento académico de sus hijos?

Distintos trabajos han analizado la relevancia del desajuste educativo y de sus consecuencias sobre los trabajadores que la padecen. Dicho análisis es especialmente importante en el caso de España, ya que presenta uno de los porcentajes de sobreeducación más elevado de los países de la OCDE. Un aspecto que, sin embargo, no ha sido estudiado hasta el momento y que tiene un claro interés en el contexto de la economía de la educación es el posible efecto intergeneracional del desajuste educativo. El objetivo del trabajo consiste en analizar si el desajuste educativo de los padres genera algún efecto desincentivador sobre la educación de sus hijos. En concreto, se analiza si el desajuste educativo de los padres afecta a los resultados educativos de los hijos. A partir de los microdatos de la encuesta PISA para España referidos al año 2009. Dicha encuesta facilita información detallada sobre la formación de los alumnos de 15 años en las materias de matemáticas, ciencia y lengua, sus características personales y la de su entorno escolar y familiar lo que la hace idónea para llevar a cabo el estudio planteado. Los resultados obtenidos muestran que los estudiantes con progenitores sobreeducados tienen una penalización en su rendimiento académico en las tres materias analizadas, siendo ésta más intensa para los estudiantes con peores resultados educativos.

Estimation of parametric and nonparametric models for univariate claim severity distributions - an approach using R

This paper presents an analysis of motor vehicle insurance claims relating to vehicle damage and to associated medical expenses. We use univariate severity distributions estimated with parametric and non-parametric methods. The methods are implemented using the statistical package R. Parametric analysis is limited to estimation of normal and lognormal distributions for each of the two claim types. The nonparametric analysis presented involves kernel density estimation. We illustrate the benefits of applying transformations to data prior to employing kernel based methods. We use a log-transformation and an optimal transformation amongst a class of transformations that produces symmetry in the data. The central aim of this paper is to provide educators with material that can be used in the classroom to teach statistical estimation methods, goodness of fit analysis and importantly statistical computing in the context of insurance and risk management. To this end, we have included in the Appendix of this paper all the R code that has been used in the analysis so that readers, both students and educators, can fully explore the techniques described

How much risk is mitigated by LTC Insurance? A case study of the public system in Spain

We present a methodology that allows to calculate the impact of a given Long-Term Care (LTC) insurance protection system on the risk of incurring extremely large individual lifetime costs. Our proposed methodology is illustrated with a case study. According to our risk measure, the current Spanish public LTC system mitigates individual risk by more than 30% compared to the situation where no public protection were available. We show that our method can be used to compare risk reduction of alternative LTC insurance plans.

Loss risk through fraud in car insurance

Our objective is to analyse fraud as an operational risk for the insurance company. We study the effect of a fraud detection policy on the insurer's results account, quantifying the loss risk from the perspective of claims auditing. From the point of view of operational risk, the study aims to analyse the effect of failing to detect fraudulent claims after investigation. We have chosen VAR as the risk measure with a non-parametric estimation of the loss risk involved in the detection or non-detection of fraudulent claims. The most relevant conclusion is that auditing claims reduces loss risk in the insurance company.

How does monetary policy change? evidence on inflation targeting countries

We examine the evolution of monetary policy rules in a group of inflation targeting countries (Australia, Canada, New Zealand, Sweden and the United Kingdom) applying moment- based estimator at time-varying parameter model with endogenous regressors. Using this novel flexible framework, our main findings are threefold. First, monetary policy rules change gradually pointing to the importance of applying time-varying estimation framework. Second, the interest rate smoothing parameter is much lower that what previous time-invariant estimates of policy rules typically report. External factors matter for all countries, albeit the importance of exchange rate diminishes after the adoption of inflation targeting. Third, the response of interest rates on inflation is particularly strong during the periods, when central bankers want to break the record of high inflation such as in the U.K. or in Australia at the beginning of 1980s. Contrary to common wisdom, the response becomes less aggressive after the adoption of inflation targeting suggesting the positive effect of this regime on anchoring inflation expectations. This result is supported by our finding that inflation persistence as well as policy neutral rate typically decreased after the adoption of inflation targeting.

Inequality across countries in energy intensities: an analysis of the role of energy transformation and final energy consumption

This paper analyzes the role of the energy transformation index and of final energy consumption per GDP unit in the disparities in energy intensity across countries. In that vein, we use a Theil decomposition approach to analyze global primary energy intensity inequality as well as inequality across different regions of the world and inequality within these regions. The paper first demonstrates the pre-eminence of divergence in final energy consumption per GDP unit in explaining global primary energy intensity inequality and its evolution during the 1971-2006 period. Secondly, it shows the lower (albeit non negligible) impact of the transformation index in global primary energy inequality. Thirdly, the relevance of regions as unit of analysis in studying crosscountry energy intensity inequality and their explanatory factors is highlighted. And finally, how regions around the world differ as to the relevance of the energy transformation index in explaining primary energy intensity inequality.