How much structure in empirical models?

This chapter highlights the problems that structural methods and SVAR approaches have when estimating DSGE models and examining their ability to capture important features of the data. We show that structural methods are subject to severe identification problems due, in large part, to the nature of DSGE models. The problems can be patched up in a number of ways but solved only if DSGEs are completely reparametrized or respecified. The potential misspecification of the structural relationships give Bayesian methods an hedge over classical ones in structural estimation. SVAR approaches may face invertibility problems but simple diagnostics can help to detect and remedy these problems. A pragmatic empirical approach ought to use the flexibility of SVARs against potential misspecificationof the structural relationships but must firmly tie SVARs to the class of DSGE models which could have have generated the data.

On the relevance of modeling volatility for pricing purposes

This paper presents a two-factor (Vasicek-CIR) model of the term structure of interest rates and develops its pricing and empirical properties. We assume that default free discount bond prices are determined by the time to maturity and two factors, the long-term interest rate and the spread. Assuming a certain process for both factors, a general bond pricing equation is derived and a closed-form expression for bond prices is obtained. Empirical evidence of the model's performance in comparisson with a double Vasicek model is presented. The main conclusion is that the modeling of the volatility in the long-term rate process can help (in a large amount) to fit the observed data can improve - in a reasonable quantity - the prediction of the future movements in the medium- and long-term interest rates. However, for shorter maturities, it is shown that the pricing errors are, basically, negligible and it is not so clear which is the best model to be used.

An assessment of empirical Bayes and composite estimators for small areas

We compare a set of empirical Bayes and composite estimators of the population means of the districts (small areas) of a country, and show that the natural modelling strategy of searching for a well fitting empirical Bayes model and using it for estimation of the area-level means can be inefficient.

Did colonization matter for growth? An empirical exploration into the historical causes of Africa's underdevelopment

We investigate the impact of 20th--century European colonizationon growth in Africa. We find that in the 1960--88 period growth has beenfaster for dependencies than for colonies; for British and Frenchcolonies than for Portuguese, Belgian and Italian ones; and for countrieswith less economic penetration during the colonial period. On average,African growth accelerates after decolonization. Proxies for colonialheritage add explanatory power to growth regressions and make indicatorsfor human capital, political and ethnic instability lose significance.Colonial variables capture the same effects of a sub--Saharan dummy andreduce its significance when jointly included in a cross sectionalregression with 98 countries.

Worst-case bounds for the logarithmic loss of predictors

We investigate on-line prediction of individual sequences. Given a class of predictors, the goal is to predict as well as the best predictor in the class, where the loss is measured by the self information (logarithmic) loss function. The excess loss (regret) is closely related to the redundancy of the associated lossless universal code. Using Shtarkov's theorem and tools from empirical process theory, we prove a general upper bound on the best possible (minimax) regret. The bound depends on certain metric properties of the class of predictors. We apply the bound to both parametric and nonparametric classes ofpredictors. Finally, we point out a suboptimal behavior of the popular Bayesian weighted average algorithm.

University admission marks in Catalonia: Some highlights from the empirical research

The results of the examinations taken by graduated high school studentswho want to enrol at a Catalan university are here studied. To do so,the authors address several issues related to the equity of the system:reliability of grading, difficulty and discrimination power of the exams.The general emphasis is put upon the concurrent research and empiricalevidence about the properties of the examination items and scores. Aftera discussion about the limitations of the exams' format and appropriatenessof the instruments used in the study, the article concludes with somesuggestions to improve such examinations.

A two-mean reverting-factor model of the term structure of interest rates

This paper presents a two--factor model of the term structure ofinterest rates. We assume that default free discount bond prices aredetermined by the time to maturity and two factors, the long--term interestrate and the spread (difference between the long--term rate and theshort--term (instantaneous) riskless rate). Assuming that both factorsfollow a joint Ornstein--Uhlenbeck process, a general bond pricing equationis derived. We obtain a closed--form expression for bond prices andexamine its implications for the term structure of interest rates. We alsoderive a closed--form solution for interest rate derivatives prices. Thisexpression is applied to price European options on discount bonds andmore complex types of options. Finally, empirical evidence of the model'sperformance is presented.

An empirical evaluation of small area estimators

This paper investigates the comparative performance of five small areaestimators. We use Monte Carlo simulation in the context of boththeoretical and empirical populations. In addition to the direct andindirect estimators, we consider the optimal composite estimator withpopulation weights, and two composite estimators with estimatedweights: one that assumes homogeneity of within area variance andsquare bias, and another one that uses area specific estimates ofvariance and square bias. It is found that among the feasibleestimators, the best choice is the one that uses area specificestimates of variance and square bias.

The determinants of football match attendance revisited: Empirical evidence from the Spanish Football League

An attendance equation is estimated using data on individual games playedin the Spanish First Division Football League. The specification includesas explanatory factors: economic variables, quality, uncertainty andopportunity costs. We concentrate the analysis on some specificationissues such as controlling the effect of unobservables given the paneldata structure of the data set, the type of functional form and thepotential endogeneity of prices. We obtain the expected effects onattendance for all the variables. The estimated price elasticities aresmaller than one in absolute value as usually occurs in this literaturebut are sensitive to the specification issues.

Fixed and random effects in Classical and Bayesian regression

This paper proposes a common and tractable framework for analyzingdifferent definitions of fixed and random effects in a contant-slopevariable-intercept model. It is shown that, regardless of whethereffects (i) are treated as parameters or as an error term, (ii) areestimated in different stages of a hierarchical model, or whether (iii)correlation between effects and regressors is allowed, when the sameinformation on effects is introduced into all estimation methods, theresulting slope estimator is also the same across methods. If differentmethods produce different results, it is ultimately because differentinformation is being used for each methods.

Empirical studies of cloud effects on UV radiation: A review

The interest in solar ultraviolet (UV) radiation from the scientific community and the general population has risen significantly in recent years because of the link between increased UV levels at the Earth's surface and depletion of ozone in the stratosphere. As a consequence of recent research, UV radiation climatologies have been developed, and effects of some atmospheric constituents (such as ozone or aerosols) have been studied broadly. Correspondingly, there are well-established relationships between, for example, total ozone column and UV radiation levels at the Earth's surface. Effects of clouds, however, are not so well described, given the intrinsic difficulties in properly describing cloud characteristics. Nevertheless, the effect of clouds cannot be neglected, and the variability that clouds induce on UV radiation is particularly significant when short timescales are involved. In this review we show, summarize, and compare several works that deal with the effect of clouds on UV radiation. Specifically, works reviewed here approach the issue from the empirical point of view: Some relationship between measured UV radiation in cloudy conditions and cloud-related information is given in each work. Basically, there are two groups of methods: techniques that are based on observations of cloudiness (either from human observers or by using devices such as sky cameras) and techniques that use measurements of broadband solar radiation as a surrogate for cloud observations. Some techniques combine both types of information. Comparison of results from different works is addressed through using the cloud modification factor (CMF) defined as the ratio between measured UV radiation in a cloudy sky and calculated radiation for a cloudless sky. Typical CMF values for overcast skies range from 0.3 to 0.7, depending both on cloud type and characteristics. Despite this large dispersion of values corresponding to the same cloud cover, it is clear that the cloud effect on UV radiation is 15–45% lower than the cloud effect on total solar radiation. The cloud effect is usually a reducing effect, but a significant number of works report an enhancement effect (that is increased UV radiation levels at the surface) due to the presence of clouds. The review concludes with some recommendations for future studies aimed to further analyze the cloud effects on UV radiation

Does Direct Democracy Matters for Political Parties : An Empirical Test in the Swiss Cantons

According to most political scientists and commentators, direct democracy seems to weaken political parties. Our empirical analysis in the 26 Swiss cantons shows that this thesis in its general form cannot be maintained. Political parties in cantons with extensive use of referendums and initiatives are not in all respects weaker than parties in cantons with little use of direct democratic means of participation. On the contrary, direct democracy goes together with more professional and formalized party organizations. Use of direct democracy is associated with more fragmented and volatile party systems, and with greater support for small parties, but causal interpretations of these relationships are difficult.

Chromosomal rearrangement and genetic structure in the shrews of the Sorex araneus group

ABSTRACT The role of chromosomal rearrangements in the speciation process is much debated and many theoretical models have been developed. The shrews of the Sorex araneus group offer extraordinary opportunities to study the relationship between chromosomal variation and speciation. Indeed, this group of morphologically very similar species received a great deal of attention due to its karyotypic variability, which is mainly attributed to Robertsonian fusions. To explore the impact of karyotypic changes on genetic differentiation, we first studied the relationship between genetic and karyotypic structure among Alpine species and among chromosome races of the S. araneus group using Bayesian admixture analyses. The results of these analyses confirmed the taxonomic status of the studied species even though introgression can still be detected between species. Moreover, the strong spatial sub-structure highlighted the role of historical factors (e.g. geographical isolation) on genetic structure. Next, we studied gene flow at the chromosome level to address the question of the impact of chromosomal rearrangements on genetic differentiation. We used flow sorted chromosomes from three different karyotypic taxa of the S. araneus group to map microsatellite markers at the chromosóme arm level. We have been able to map 24 markers and to show that the karyotypic organisation of these taxa is well conserved, which suggests that these markers can be used for further inter-taxa studies. A general prediction of chromosomal speciation models is that genetic differentiation between two taxa should be larger across rearranged chromosomes than across chromosomes common to both taxa. We combined two approaches using mapped microsatellites to test this prediction. First, we studied the genetic differentiation among five shrew taxa placed at different evolutionary levels (i.e. within and among species). In this large scale study, we detected an overall significant difference in genetic structure between rearranged vs. common chromosomes. Moreover, this effect varied among pairwise comparisons, which allowed us to differentiate the role of the karyotypic complexity of hybrids and of the evolutionary divergence between taxa. Secondly, we compared the levels of gene flow measured across common vs. rearranged chromosomes in two karyotypically different hybrid zones (strong vs. low complexity of hybrids), which show similar levels of genetic structure. We detected a significantly stronger genetic structure across rearranged chromosomes in the hybrid zone showing the highest level of hybrid complexity. The large variance observed among loci suggested that other factors, such as the position of markers within the chromosome, also certainly affects genetic structure. In conclusion, our results strongly support the role of chromosomal rearrangements in the reproductive barrier and suggest their importance in speciation process of the S. araneus group. RESUME Le rôle des réarrangements chromosomiques dans les processus de spéciation est fortement débattu et de nombreux modèles théoriques ont été développés sur le sujet. Les musaraignes du groupe Sorex araneus présentent de nombreuses opportunités pour étudier les relations entre les variations chromosomiques et la spéciation. En effet, ce groupe d'espèces morphologiquement très proches a attiré l'attention des chercheurs en raison de sa variabilité caryotypique principalement attribuée à des fusions Robertsoniennes. Pour explorer l'impact des changements caryotypiques sur la différenciation génétique, nous avons tout d'abord étudié les relations entre la structure génétique et caryotypique de races chromosomiques et d'espèces alpine du groupe S. araneus en utilisant des analyses Bayesiennes d' « admixture ». Les résultats de ces analyses ont confirmé le statut taxonomique des espèces étudiées bien que nous ayons détecté de l'introgression entre espèces. L'observation d'une sous structure spatiale relativement forte souligne l'importance des facteurs historiques (telle que l'isolation géographique) sur la structure génétique de ce groupe. Ensuite, nous avons étudié le flux de gène au niveau des chromosomes pour aborder de manière directe la question de l'impact des réarrangements chromosomiques sur la différenciation génétique. En conséquence, nous avons utilisé des tris de chromosomes de trois taxons du groupe S. araneus pour localiser des marqueurs microsatellites au niveau du bras chromosomique. Au cours de cette étude, nous avons pu localiser 24 marqueurs et montrer une forte conservation dans l'organisation du caryotype de ces taxa. Ce résultat suggère que leur utilisation est appropriée pour des études entre taxa. Une prédiction générale à tous les modèles de spéciation chromosomique correspond à la plus grande différenciation génétique des chromosomes réarrangés que des chromosomes communs. Nous avons combiné deux approches utilisant des microsatellites localisés au niveau du bras chromosomique pour tester cette prédiction. Premièrement, nous avons étudié la différenciation génétique entre cinq taxa du groupe S. araneus se trouvant à des niveaux évolutifs différents (i.e. à l'intérieur et entre espèce). Au cours de cette étude, nous avons détecté une différenciation globale significativement plus élevée sur les chromosomes réarrangés. Cet effet varie entre les comparaisons, ce qui nous a permis de souligner le rôle de la complexité caryotypique des hybrides et du niveau de divergence évolutive entre taxa. Deuxièmement, nous avons comparé le flux de gènes des chromosomes communs et réarrangés dans deux zones d'hybridation caryotypiquement différentes (forte vs. Faible complexité des hybrides) mais présentant un niveau de différenciation génétique similaire. Ceci nous a permis de détecter une structure génétique significativement plus élevée sur les chromosomes réarrangés au centre de la zone d'hybridation présentant la plus grande complexité caryotypic. La forte variance observée entre loci souligne en outre le fait que d'autres facteurs, tel que la position du marqueur sur le chromosome, affectent probablement aussi la structure génétique mesurée. En conclusion, nos résultats supportent fortement le rôle des réarrangements chromosomiques dans la barrière reproductive entre espèces ainsi que leur importance dans les processus de spéciation des musaraignes du groupe S. araneus.

A fast Bayesian reconstruction algorithm for emission tomography with entropy prior converging to feasible images

The development and tests of an iterative reconstruction algorithm for emission tomography based on Bayesian statistical concepts are described. The algorithm uses the entropy of the generated image as a prior distribution, can be accelerated by the choice of an exponent, and converges uniformly to feasible images by the choice of one adjustable parameter. A feasible image has been defined as one that is consistent with the initial data (i.e. it is an image that, if truly a source of radiation in a patient, could have generated the initial data by the Poisson process that governs radioactive disintegration). The fundamental ideas of Bayesian reconstruction are discussed, along with the use of an entropy prior with an adjustable contrast parameter, the use of likelihood with data increment parameters as conditional probability, and the development of the new fast maximum a posteriori with entropy (FMAPE) Algorithm by the successive substitution method. It is shown that in the maximum likelihood estimator (MLE) and FMAPE algorithms, the only correct choice of initial image for the iterative procedure in the absence of a priori knowledge about the image configuration is a uniform field.

Bayesian image reconstruction with space-variant noise suppression

In this paper we present a Bayesian image reconstruction algorithm with entropy prior (FMAPE) that uses a space-variant hyperparameter. The spatial variation of the hyperparameter allows different degrees of resolution in areas of different statistical characteristics, thus avoiding the large residuals resulting from algorithms that use a constant hyperparameter. In the first implementation of the algorithm, we begin by segmenting a Maximum Likelihood Estimator (MLE) reconstruction. The segmentation method is based on using a wavelet decomposition and a self-organizing neural network. The result is a predetermined number of extended regions plus a small region for each star or bright object. To assign a different value of the hyperparameter to each extended region and star, we use either feasibility tests or cross-validation methods. Once the set of hyperparameters is obtained, we carried out the final Bayesian reconstruction, leading to a reconstruction with decreased bias and excellent visual characteristics. The method has been applied to data from the non-refurbished Hubble Space Telescope. The method can be also applied to ground-based images.