Probable economic effect redesignation of certain articles from certain countries as eligible for duty-free treatment under the U.S. generalized system of preferences : report to the President on investigation no. 332-284

Mode of access: Internet.

The development of preferences for specific body shapes

Research with adults has shown a preference for average-weight female figures with waist-to-hip ratios (WHR) of 0.7, and average weight male figures with waist-to-hip ratios of 0.9. This study investigated the development of preferences for WHR sizes as well as preferences for specific body weights. Five-hundred eleven children ranging in age from 6 to 17 were presented with drawings of 12 male and 12 female silhouettes varying in weight and WHR and asked to select one they thought looked the nicest or most attractive. The youngest children showed preferences for the underweight figures, changing to consistent preferences for the average weight figures in the teenage years. The developmental curves for waist-to-hip ratio preferences were linear, changing gradually over time to become more adult-like. Potential developmental models for the development of preferences for specific body shapes are considered in relation to these data.

Voting behaviour on free votes: Simply a matter of preferences?

Previous research examining the outcomes of free votes concludes that voting behaviour is determined in large part by MPs’ personal preferences. However, most studies do not measure preferences directly and ignore other possible determinants of voting behaviour. This piece illustrates the need to address these shortcomings before one concludes that preferences explain the outcomes of free votes. I illustrate this by examining a series of divisions on the issue of House of Lords reform. Using direct measures of preferences and controlling for alternative explanations, the analysis suggests MPs’ preferences had little effect on voting behaviour on this issue.

Eliciting consumer preferences for certified animal-friendly foods: can elements of the theory of planned behavior improve choice experiment analysis?

Models used in neoclassical economics assume human behaviour to be purely rational. On the other hand, models adopted in social and behavioural psychology are founded on the ‘black box’ of human cognition. In view of these observations, this paper aims at bridging this gap by introducing psychological constructs in the well established microeconomic framework of choice behaviour based on random utility theory. In particular, it combines constructs developed employing Ajzen’s theory of planned behaviour with Lancaster’s theory of consumer demand for product characteristics to explain stated preferences over certified animal-friendly foods. To reach this objective a web survey was administered in the largest five EU-25 countries: France, Germany, Italy, Spain and the UK. Findings identify some salient cross-cultural differences between northern and southern Europe and suggest that psychological constructs developed using the Ajzen model are useful in explaining heterogeneity of preferences. Implications for policy makers and marketers involved with certified animal-friendly foods are discussed.

The shape of female mating preferences

The “shape” of a female mating preference is the relationship between a male trait and the probability of acceptance as a mating partner. The shape of preferences is important in many models of sexual selection, mate recognition, communication, and speciation, yet it has rarely been measured precisely. Here I examine preference shape for male calling song in a bushcricket (katydid). Preferences change dramatically between races of a species, from strongly directional to broadly stabilizing (but with a net directional effect). Preference shape generally matches the distribution of the male trait. This is compatible with a coevolutionary model of signal-preference evolution, although it does not rule out an alternative model, sensory exploitation. Preference shapes are shown to be genetic in origin.

Going twice to the polls?: Optimality of two-stage voting procedures

A Masters Thesis, presented as part of the requirements for the award of a Research Masters Degree in Economics from NOVA – School of Business and Economics

A Simple Characterization of Dynamic Completeness in Continuous Time

This paper investigates dynamic completeness of financial markets in which the underlying risk process is a multi-dimensional Brownian motion and the risky securities dividends geometric Brownian motions. A sufficient condition, that the instantaneous dispersion matrix of the relative dividends is non-degenerate, was established recently in the literature for single-commodity, pure-exchange economies with many heterogenous agents, under the assumption that the intermediate flows of all dividends, utilities, and endowments are analytic functions. For the current setting, a different mathematical argument in which analyticity is not needed shows that a slightly weaker condition suffices for general pricing kernels. That is, dynamic completeness obtains irrespectively of preferences, endowments, and other structural elements (such as whether or not the budget constraints include only pure exchange, whether or not the time horizon is finite with lump-sum dividends available on the terminal date, etc.)

Mate choice evolution, dominance effects, and the maintenance of genetic variation.

Female mate choice influences the maintenance of genetic variation by altering the mating success of males with different genotypes. The evolution of preferences themselves, on the other hand, depends on genetic variation present in the population. Few models have tracked this feedback between a choice gene and its effects on genetic variation, in particular when genes that determine offspring viability and attractiveness have dominance effects. Here we build a population genetic model that allows comparing the evolution of various choice rules in a single framework. We first consider preferences for good genes and show that focused preferences for homozygotes evolve more easily than broad preferences, which allow heterozygous males high mating success too. This occurs despite better maintenance of genetic diversity in the latter scenario, and we discuss why empirical findings of superior mating success of heterozygous males consequently do not immediately lead to a better understanding of the lek paradox. Our results thus suggest that the mechanisms that help maintain genetic diversity also have a flipside of making female choice an inaccurate means of producing the desired kind of offspring. We then consider preferences for heterozygosity per se, and show that these evolve only under very special conditions. Choice for compatible genotypes can evolve but its selective advantage diminishes quickly due to frequency-dependent selection. Finally, we show that our model reproduces earlier results on selfing, when the female choice strategy produces assortative mating. Overall, our model indicates that various forms of heterozygote-favouring (or variable) female choice pose a problem for the theory of sexual ornamentation based on indirect benefits, rather than a solution.

How does ownership structure invfluence bank risk? Analyzing the role of managerial incentives

This paper analyzes how ownership concentration and managerial incentives influences bank risk for a large sample of US banks over the period 1997-2007. Using 2SLS simultaneous equations models, we show that ownership concentration has a positive total effect on bank risk. This is the result of a positive direct effect, which reflects monitoring and opportunistic behavior, and a negative indirect effect, which works through the design of managerial incentive contracts and reflects shareholder preferences toward risk. Large shareholders reduce bank risk by reducing the sensitivity of CEO wealth to stock volatility (Vega) and by increasing the CEO pay-performance sensitivity (Delta). In addition, we show that the direct and indirect effect of ownership concentration on bank risk depends on the type of the largest shareholder (a family, a bank, a corporation or an institutional investor), as well as, on the total shareholding held by each type as a group. Our results suggest that the positive relation between ownership concentration and risk is not the result of preferences towards more risk. Rather, they point at opportunistic behavior of large shareholders.

Productivities, preferences, and parental child care

We study the interplay of preferences and market productivities on parenting, and show the preferences, when identified, provide a better explanation of caring decisions than has, so far, been demonstrated in the literature. We qualify the standard finding the parental education in a key determinant of care by showing important interaction effects with marital homogamy. We find that homogamy has opposite effects on child care and couple specialization for high and low educated parents. Identification has been made possible by a unique couple-based time diary study for Denmark

On the cultural transmission of corruption

We provide a cultural explanation to the phenomenon of corruption in the framework of an overlapping generations model with intergenerational transmissionof values. We show that the economy has two steady states with different levels of corruption. The driving force in the equilibrium selection process is the education effort exerted by parents which depends on the distribution of ethics in the population and on expectations about future policies. We propose some policy interventions which via parents' efforts have long-lasting effects on corruption and show the success of intensive education campaigns. Educating the young is a key element in reducing corruption successfully.

The domain and interpretation of utility functions: An exploration

This paper proposes an exploration of the methodology of utilityfunctions that distinguishes interpretation from representation. Whilerepresentation univocally assigns numbers to the entities of the domainof utility functions, interpretation relates these entities withempirically observable objects of choice. This allows us to makeexplicit the standard interpretation of utility functions which assumesthat two objects have the same utility if and only if the individual isindifferent among them. We explore the underlying assumptions of suchan hypothesis and propose a non-standard interpretation according towhich objects of choice have a well-defined utility although individualsmay vary in the way they treat these objects in a specific context.We provide examples of such a methodological approach that may explainsome reversal of preferences and suggest possible mathematicalformulations for further research.

Insurance with frequent trading: A dynamic analysis of efficient insurance markets

This paper extends existing insurance results on the type of insurance contracts needed for insurance market efficiency toa dynamic setting. It introduces continuosly open markets that allow for more efficient asset allocation. It alsoeliminates the role of preferences and endowments in the classification of risks, which is done primarily in terms of the actuarial properties of the underlying riskprocess. The paper further extends insurability to include correlated and catstrophic events. Under these very general conditions the paper defines a condition that determines whether a small number of standard insurance contracts (together with aggregate assets) suffice to complete markets or one needs to introduce such assets as mutual insurance.

Inflation Targeting Under Asymmetric Preferences

This paper develops and estimates a game-theoretical model of inflation targeting where the central banker's preferences are asymmetric around the targeted rate. In particular, positive deviations from the target can be weighted more, or less, severely than negative ones in the central banker's loss function. It is shown that some of the previous results derived under the assumption of symmetry are not robust to the generalization of preferences. Estimates of the central banker's preference parameters for Canada, Sweden, and the United Kingdom are statistically different from the ones implied by the commonly used quadratic loss function. Econometric results are robust to different forecasting models for the rate of unemployment but not to the use of measures of inflation broader than the one targeted.