Manipulation of earnings reports in Spain - some evidence

Accounting regulation is a highly topical issue for listed companies in Europe. From 1 January 2005 all companies listed in the EU member states are required to produce financial reports compliant with international accounting standards. Financial reports will be comparable with each other only if full compliance with the international standards can be ensured. Historically, however, an enduring weakness of the international standard-setting regime has been its inability to enforce compliance with its standards. There is a danger that implementation and compliance will be variable across the adopting countries, and that deeply ingrained national reporting practices will persist. The purpose of this paper is to examine some distinctive elements of Spanish financial reporting practices. Spanish financial reporting by major companies demonstrates a tendency towards quite overt manipulation of the earnings figures. The research reported in the paper firstly identifies four common earnings manipulation practices, and then proceeds to examine their incidence in the financial statements of the IBEX-35 companies over a three year period.

Single mothers and incentives to work: The French experience

This paper analyzes the effect of the 1998 reform of the French single parents allowanceon the labor supply of single mothers with very young children. The reform aimed atencouraging participation by allowing eligible single parents to accumulate benefits andlabor earnings for a limited period of time. Using data from the French EmploymentSurvey, the analysis shows that single mothers affected by the reform had experienced asignificant increase in their employment rate four years after the reform wasimplemented. During the same period, the employment rate of married mothers withyoung children did not experience a significant change, suggesting that at least part ofthe increase was a consequence of the reform. These results provide some evidence thatbenefit schedules that provide financial incentives to work can have significant effectsin getting single moms back to work, even in the presence of very young children.

Which inflation to target? A small open economy with sticky wages indexed to past inflation

In a closed economy context there is common agreement on price inflation stabilization being one of the objects of monetary policy. Moving to an open economy context gives rise to the coexistence of two measures of inflation: domestic inflation (DI) and consumer price inflation (CPI). Which one of the two measures should be the target variable? This is the question addressed in this paper. In particular, I use a small open economy model to show that once sticky wages indexed to past CPI inflation are introduced, a complete inward looking monetary policy is no more optimal. I first, derive a loss function from a secondorder approximation of the utility function and then, I compute the fully optimalmonetary policy under commitment. Then, I use the optimal monetary policy as a benchmark to compare the performance of different monetary policy rules. The main result is that once a positive degree of indexation is introduced in the model the rule performing better (among the Taylor type rules considered) is the one targeting wage inflation and CPI inflation. Moreover this rule delivers results very close to the one obtained under the fully optimal monetary policy with commitment.

Improving electricity market price scenarios by means of forecasting factor models

In liberalized electricity markets, generation Companies must build an hourly bidthat is sent to the market operator. The price at which the energy will be paid is unknown during the bidding process and has to be forecast. In this work we apply forecasting factor models to this framework and study its suitability.

Monetary policy and rational asset price bubbles

I examine the impact of alternative monetary policy rules on arational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interestrates in response to a growing bubble is shown to enhance the fluctuations in the latter, through its positive effect on bubble growth. Theoptimal monetary policy seeks to strike a balance between stabilization of the bubble and stabilization of aggregate demand. The paper'smain findings call into question the theoretical foundations of the casefor "leaning against the wind" monetary policies.

Optimal public rationing and price response.

We study optimal public health care rationing and private sector price responses. Consumers differ in their wealth and illness severity (defined as treatment cost). Due to a limited budget, some consumers must be rationed. Rationed consumers may purchase from a monopolistic private market. We consider two information regimes. In the first, the public supplier rations consumers according to their wealth information (means testing). In equilibrium, the public supplier must ration both rich and poor consumers. Rationing some poor consumers implements price reduction in the private market. In the second information regime, the public supplier rations consumers according to consumers' wealth and cost information. In equilibrium, consumers are allocated the good if and only if their costs are below a threshold (cost effectiveness). Rationing based on cost results in higher equilibrium consumer surplus than rationing based on wealth.

Medical demography and intergenerational inequalities in general practitioners' earnings

This article examines the link between restrictions on the number of physicians and general practitioners' (GPs) earnings. Using a representative panel of 6016 French self-employed GPs over the years 1983-2004, we estimate an earnings function to identify experience, time and cohort effects. The estimated gap in earnings between 'good' and 'bad' cohorts can be as large as 25%. GPs who began their practices during the eighties have the lowest permanent earnings: they belong to the large cohorts of the baby-boom and face the consequences of an unlimited number of places in medical schools. Conversely, the decrease in the number of places in medical schools led to an increase in permanent earnings of GPs who began their practices in the mid-nineties. A stochastic dominance analysis shows that unobserved heterogeneity does not compensate for average differences in earnings between cohorts. These findings suggest that the first years of practice are decisive for a GP. If competition between physicians is too intense at the beginning of their careers, they will suffer from permanently lower earnings. To conclude, our results show that the policies aimed at reducing the number of medical students succeeded in buoying up physicians' permanent earnings. [Ed.]

Returns to Foreign Language Skills in a Developing Country: The Case of Turkey

Foreign language skills represent a form of human capital that can be rewarded in the labor market. Drawing on data from the Adult Education Survey of 2007, this is the first study estimating returns to foreign language skills in Turkey. We contribute to the literature on the economic value of language knowledge, with a special focus on a country characterized by fast economic and social development. Although English is the most widely spoken foreign language in Turkey, we initially consider the economic value of different foreign languages among the employed males aged 25 to 65. We find positive and significant returns to proficiency in English and Russian, which increase with the level of competence. Knowledge of French and German also appears to be positively rewarded in the Turkish labor market, although their economic value seems mostly linked to an increased likelihood to hold specific occupations rather than increased earnings within occupations. Focusing on English, we also explore the heterogeneity in returns to different levels of proficiency by frequency of English use at work, birth-cohort, education, occupation and rural/urban location. The results are also robust to the endogenous specification of English language skills.

Factor shares, the price markup, and the elasticity of substitution between capital and labor

[spa] La participación del trabajo en la renta nacional es constante bajo los supuestos de una función de producción Cobb-Douglas y competencia perfecta. En este artículo se relajan estos supuestos y se investiga si el comportamiento no constante de la participación del trabajo en la renta nacional se explica por (i) una elasticidad de sustitución entre capital y trabajo no unitaria y (ii) competencia no perfecta en el mercado de producto. Nos centramos en España y los U.S. y estimamos una función de producción con elasticidad de sustitución constante y competencia imperfecta en el mercado de producto. El grado de competencia imperfecta se mide a través del cálculo del price markup basado en laaproximación dual. Mostramos que la elasticidad de sustitución es mayor que uno en España y menor que uno en los US. También mostramos que el price markup aleja la elasticidad de sustitución de uno, lo aumenta en España, lo reduce en los U.S. Estos resultados se utilizan para explicar la senda decreciente de la participación del trabajo en la renta nacional, común a ambas economías, y sus contrastadas sendas de capital.

Price transmission and market power analysis in the Spanish seafood market chain

[cat] Espanya és un dels principals mercats de productes pesquers d’Europa i del món. El consum de productes pesquers ha estat tradicionalment molt important a Espanya, el 2005 es varen consumir 36,7 kg per persona (MAPA, diversos anys). Malgrat això, el mercat i cóm interactuen els diversos nivells de la cadena de comercialització han gaudit de poca atenció. En aquest estudi, utilitzant dades setmanals, s’analitza per als dotze principals productes pesquers, l’elasticitat en la transmissió de preus al llarg de la cadena de comercialització a Espanya (llotja, mercat central i detallista). Finalment s’investiga la presència d’assimetria en la transmissió de preus entre aquests nivells de mercat. Els resultats obtinguts tenen importants implicacions a l’hora d’analitzar la demanda, poder de mercat i marges al llarg del mercat per als productes pesquers.

Drug price differentials caused by de-listing and price cap policies

This paper analyses the behaviour of pharmaceutical companies that face the threat of having their drugs excluded from reimbursement and the markets characterised also by price caps. We conclude that price elasticity of demand and cost differentials cause the price discounts which drug firms offer to health care organisations. Additionally, we conclude that price cap regulations affect the time path of prices, resulting in higher prices for new products and lower prices for old products.

Uniform-price assignment markets

Uniform-price assignment games are introduced as those assignment markets with the core reduced to a segment. In these games, for all active agents, competitive prices are uniform although products may be non-homogeneous. A characterization in terms of the assignment matrix is given. The only assignment markets where all submarkets are uniform are the Bohm-Bawerk horse markets. We prove that for uniform-price assignment games the kernel, or set of symmetrically-pairwise bargained allocations, either coincides with the core or reduces to the nucleolus

Putative adverse outcome pathways relevant to neurotoxicity.

The Adverse Outcome Pathway (AOP) framework provides a template that facilitates understanding of complex biological systems and the pathways of toxicity that result in adverse outcomes (AOs). The AOP starts with an molecular initiating event (MIE) in which a chemical interacts with a biological target(s), followed by a sequential series of KEs, which are cellular, anatomical, and/or functional changes in biological processes, that ultimately result in an AO manifest in individual organisms and populations. It has been developed as a tool for a knowledge-based safety assessment that relies on understanding mechanisms of toxicity, rather than simply observing its adverse outcome. A large number of cellular and molecular processes are known to be crucial to proper development and function of the central (CNS) and peripheral nervous systems (PNS). However, there are relatively few examples of well-documented pathways that include causally linked MIEs and KEs that result in adverse outcomes in the CNS or PNS. As a first step in applying the AOP framework to adverse health outcomes associated with exposure to exogenous neurotoxic substances, the EU Reference Laboratory for Alternatives to Animal Testing (EURL ECVAM) organized a workshop (March 2013, Ispra, Italy) to identify potential AOPs relevant to neurotoxic and developmental neurotoxic outcomes. Although the AOPs outlined during the workshop are not fully described, they could serve as a basis for further, more detailed AOP development and evaluation that could be useful to support human health risk assessment in a variety of ways.

Parents' willingness to pay for diminishing children's pain during blood sampling.

BACKGROUND: Blood sampling is a frequent medical procedure, very often considered as a stressful experience by children. Local anesthetics have been developed, but are expensive and not reimbursed by insurance companies in our country. We wanted to assess parents' willingness to pay (WTP) for this kind of drug. PATIENTS AND METHODS: Over 6 months, all parents of children presenting for general (GV) or specialized visit (SV) with blood sampling. WTP was assessed through three scenarios [avoiding blood sampling (ABS), using the drug on prescription (PD), or over the counter (OTC)], with a payment card system randomized to ascending or descending order of prices (AO or DO). RESULTS: Fifty-six responses were collected (34 GV, 22 SV, 27 AO and 29 DO), response rate 40%. Response distribution was wide, with median WTP of 40 for ABS, 25 for PD, 10 for OTC, which is close to the drug's real price. Responses were similar for GV and SV. Median WTP amounted to 0.71, 0.67, 0.20% of respondents' monthly income for the three scenarios, respectively, with a maximum at 10%. CONCLUSIONS: Assessing parents' WTP in an outpatient setting is difficult, with wide result distribution, but median WTP is close to the real drug price. This finding could be used to promote insurance coverage for this drug.

Uniform-price assignment markets

Uniform-price assignment games are introduced as those assignment markets with the core reduced to a segment. In these games, for all active agents, competitive prices are uniform although products may be non-homogeneous. A characterization in terms of the assignment matrix is given. The only assignment markets where all submarkets are uniform are the Bohm-Bawerk horse markets. We prove that for uniform-price assignment games the kernel, or set of symmetrically-pairwise bargained allocations, either coincides with the core or reduces to the nucleolus