Suppliers of Priors: A Theory of Retailing Inspired by the Market for Chinese Antiquities

Adverse selection may thwart trade between an informed seller, who knows the probability p that an item of antiquity is genuine, and an uninformed buyer, who does not know p. The buyer might not be wholly uninformed, however. Suppose he can perform a simple inspection, a test of his own: the probability that an item passes the test is g if the item is genuine, but only f < g if it is fake. Given that the buyer is no expert, his test may have little power: f may be close to g. Unfortunately, without much power, the buyer's test will not resolve the difficulty of adverse selection; gains from trade may remain unexploited. But now consider a "store", where the seller groups a number of items, perhaps all with the same quality, the same probability p of being genuine. (We show that in equilibrium the seller will choose to group items in this manner.) Now the buyer can conduct his test across a large sample, perhaps all, of a group of items in the seller's store. He can thereby assess the overall quality of these items; he can invert the aggregate of his test results to uncover the underlying p; he can form a "prior". There is thus no longer asymmetric information between seller and buyer: gains from trade can be exploited. This is our theory of retailing: by grouping items together - setting up a store - a seller is able to supply buyers with priors, as well as the items themselves. We show that the weaker the power of the buyer�s test (the closer f is to g), the greater the seller�s profit. So the seller has no incentive to assist the buyer � e.g., by performing her own tests on the items, or by cleaning them to reveal more about their true age. The paper ends with an analysis of which sellers should specialise in which qualities. We show that quality will be low in busy locations and high in expensive locations.

Complete Markets Strikes Back: Revisiting Risk Sharing Tests under Discount Rate Heterogeneity

Recent risk sharing tests strongly reject the hypothesis of complete markets, because in the data: (1) the individual consumption comoves with income and (2) the consumption dispersion increases over the life cycle. In this paper, I revisit the implications of these risk sharing tests in the context of a complete market model with discount rate heterogeneity, which is extended to introduce the individual choices of effort in education. I .nd that a complete market model with discount rate heterogeneity can pass both types of the risk sharing tests. The endogenous positive correlation between income growth rate and patience makes the individual consumption comove with income, even if the markets are complete. I also show that this model is quantitatively admissible to account for both the observed comovement of consumption and income and the increase of consumption dispersion over the life cycle.

Social isolation causers mortality by disrupting energy homeostrasis in ants

Social deprivation can have negative effects on the lives of social animals, including humans, yet little is known about the mechanisms by which social withdrawal affects animal health. Here we show that in the carpenter ant Camponotus fellah, socially isolated workers have a greatly reduced life span relative to ants kept in groups of ten individuals. By using a new tracking system, we found that social isolation resulted in important behavioral changes and greatly increased locomotor activity. The higher activity of single ants and their increased propensity to leave the nest to move along the walls suggested that the increased mortality of isolated ants might stem from an imbalance of energy income and expenditure. This view was supported by the finding that while isolated ants ingested the same amount of food as grouped ants, they retained food in the crop, hence preventing its use as an energy source. Moreover, the difference in life span between single and grouped individuals vanished when ants were not fed. This study thus underlines the role of social interactions as key regulators of energy balance, which ultimately affects aging and health in a highly social organism.

Prior selection for panel vector autoregressions

There is a vast literature that specifies Bayesian shrinkage priors for vector autoregressions (VARs) of possibly large dimensions. In this paper I argue that many of these priors are not appropriate for multi-country settings, which motivates me to develop priors for panel VARs (PVARs). The parametric and semi-parametric priors I suggest not only perform valuable shrinkage in large dimensions, but also allow for soft clustering of variables or countries which are homogeneous. I discuss the implications of these new priors for modelling interdependencies and heterogeneities among different countries in a panel VAR setting. Monte Carlo evidence and an empirical forecasting exercise show clear and important gains of the new priors compared to existing popular priors for VARs and PVARs.

Crecimiento, instituciones e hidrocarburos : el proyecto petrolero mexicano en perspectiva histórica comparada (1938-2000)

En este trabajo se analiza la política petrolera mexicana durante el período 1938-2000 y su aportación al crecimiento económico mexicano. La orientación de la producción petrolera permite distinguir dos modelos de gestión de la industria petrolera. El primero de ellos; entre 1938-1976 tuvo por finalidad el aprovisionamiento energético del mercado interior a bajos precios. El segundo a partir de 1976 orientado hacia la exportación y la captura de la renta petrolera internacional. Esta ruptura en la política petrolera asociada constituye un caso interesante en sí mismo porque permite comparar los efectos de dos políticas totalmente opuestas sobre el crecimiento económico y sobre el desempeño de la propia industria petrolera en un país donde el Estado tiene derechos de propiedad exclusivos sobre el sector petrolero. Por ello, se aborda el tema como una problemática institucional que toma en cuenta tanto las características internas de México como la dinámica del mercado petrolero internacional. Se incide en el hecho de que el Estado mexicano ha utilizado a la industria petrolera y; concretamente los recursos que ésta genera no sólo como un instrumento para favorecer el crecimiento económico del país sino también para mantener el control del poder político frente a la élite económica. Así el inmovilismo institucional; la falta de ingresos e inversiones propias y el comportamiento rentista del Estado parecen haber condenado al sector petrolero mexicano al atraso y la ineficiencia. De este modo; se focaliza en las interrelaciones entre las instituciones económicas y políticas como elemento explicativo del por qué la industria petrolera no ha logrado convertirse en un elemento dinamizador del crecimiento económico mexicano en el largo plazo.

Hepatitis C virus prevalence among an immigrant community to the Southern Amazon, Brazil

A community-based random survey was conducted in a southern Brazilian Amazonian county aiming to investigate hepatitis C virus (HCV) infection prevalence and the association of demographic variables and lifestyle behaviours. Seven hundred eighty individuals were serologically screened with a third generation enzyme-linked immunosorbent assay to detect anti-HCV antibodies between 1994/1995. Positive samples were retested for confirmation with a line immunoassay (LIA, Inno-LIA HCV Ab III). Most of these subjects were low income and came from southern Brazilian states (65.8). Two point four percent (IC 95% 1.2%- 4.6%) of the subjects had LIA-confirmed anti-HCV antibodies reactivity. The age-specific prevalence of HCV antibodies slightly increased with age, with the highest prevalence after the age of 40 years. The results of multivariate analysis indicate a strong association between HCV antibodies and previous surgery and history of intravenous drug use. There were no apparent association with gender, hepatitis B virus markers, blood transfusion, and sexual activity. Mean time living in Amazon did not differ between confirmed and negative anti-HCV individuals. The present data point out an intermediate endemicity of HCV infection among this immigrant community to the Amazon region and that few HCV infected participants presented known risk factors.

Growth in a Cross-Section of Cities: Location, Increasing Returns or Random Growth?

This article analyzes empirically the main existing theories on income and population city growth: increasing returns to scale, locational fundamentals and random growth. To do this we implement a threshold nonlinearity test that extends standard linear growth regression models to a dataset on urban, climatological and macroeconomic variables on 1,175 U.S. cities. Our analysis reveals the existence of increasing returns when per-capita income levels are beyond $19; 264. Despite this, income growth is mostly explained by social and locational fundamentals. Population growth also exhibits two distinct equilibria determined by a threshold value of 116,300 inhabitants beyond which city population grows at a higher rate. Income and population growth do not go hand in hand, implying an optimal level of population beyond which income growth stagnates or deteriorates

IPH Submission: Belfast City Centre Northside Urban Village Regeneration Framework - June 2008

IPH welcome the opportunity to comment on the Department for Social Development, Draft Regeneration Framework for the North West Quarter Part 2 area of Belfast City Centre, the ‘Northside Urban Village’. The Framework outlines the vision for the redevelopment of an inner city area of Belfast.    It is recognized that a number of social, economic and environmental factors influence health. Urban regeneration has major implications for health as it includes not only physical redevelopment but also issues such as education, employment, environmental conditions, housing, welfare and healthcare.   Urban regeneration can also help to address health inequalities at a local level, as the areas where regeneration is undertaken are usually marked by poor economic and social conditions. The North West Quarter Part 2 area of Belfast is a historic part of the city. The identified area is one of the most socio-economically deprived areas of not only Belfast but Northern Ireland. The area is characterised by the large number of people who receive income and housing benefits, have low levels of educational qualifications, high rates of long-term illnesses and it is also an area of high long-term unemployment.

Steering Group Report on a National Substance Misuse Strategy February 2012

Alcohol plays a complex role in Irish society. It is associated with many aspects of Irish social and cultural life and is generally consumed for enjoyment, relaxation and sociability. The pub often plays an important role in community life and is an attraction for tourists. More broadly, alcohol plays a signifi cant role in the Irish economy by generating employment, tax income and export income.However, alcohol is no ordinary commodity. It has major public health implications and it is responsible for a considerable burden of health and social harm at individual, family and societal levels. Steering Group Report on a National Substance Misuse Strategy February 2012 Click here to download PDF 2.7mb

Measuring Food Poverty in Ireland

safefood has published a briefing document 'Measuring Food Poverty in Ireland - the indicator and its implications'. This briefing was based on researchcommissioned by the Department of Social Protection, as part of the Department’s research programme to monitor poverty trends with the ESRI. Their report ’Constructing a Food Poverty Indicator for Ireland using the Survey on Income and Living Conditions’ (Carney, C; Maitre, B; Department of Social Protection) uses data from the annual CSO Survey on Income and Living Conditions (SILC), providing a first step in measuring the experience of food poverty in Ireland by combining three food deprivation items to quantify the level of food poverty today.

Warm Front, Better Health: Health Impact Evaluation of the Warm Front Scheme

About 4 million households in the UK cannot adequately heat their homes in winter due to low income and poor quality housing, the two main causes of fuel poverty. The primary impact of fuel poverty is cold homes in winter which can lead to various health problems and even death among the vulnerable young and the elderly population. The government launched the Warm Front scheme in 2000 to tackle fuel poverty among the vulnerable households in England by providing energy efficiency measures in the forms insulation and modern heating system(??). By 2004, about 770,000 households had benefited from the Warm Front scheme and a total of 2 million households are still expected to benefit by 2010. Since 2001, the Bartlett has been investigating with London School of Hygiene & Tropical Medicine and Sheffield Hallam University, the health and the environmental impact of the Warm Front scheme. This investigative study is the most detailed to date on fuel poor dwellings based on detailed surveys of household and dwelling data, fuel consumption record and monitored temperature and relative humidity from 3,100 dwellings before and after the energy efficiency measures. The Warm Front investigation was expected to continue until the end of 2007. The findings from the investigation indicated that the Warm Front scheme was likely to have benefits in terms of improved thermal comfort and well-being as a result of mean temperature rise of 1.6C in the living room and 2.8C in the bedroom. Warm Front also lead to a decrease in indoor relative humidity mainly from the increased temperature since there appeared to be little impact on vapour pressure from changes in air tightness. Pressure test results indicated that the effects of air tightness measures such as draught stripping and cavity wall insulation were offset by the installation of a central heating system, particularly when the pipe work feeding radiators was installed below timber floors.

The state of the Countryside Annual Report

The State of the Countryside Report, published by the Commission for Rural Communities, provides a comprehensive picture of the quality of life in rural England. It shows that, in the most disadvantaged rural areas, almost one in three households lives on a low income and, across rural England as a whole, the price of housing is out of reach of many local people and some services, such as banking, continue to decline.

Farm-Level Analysis of Risk Management Proposals, March 2000

This paper presents a detailed report of the representative farm analysis (summarized in FAPRI Policy Working Paper #01-00). At the request of several members of the Committee on Agriculture, Nutrition, and Forestry of the U.S. Senate, we have continued to analyze the impacts of the Farmers’ Risk Management Act of 1999 (S. 1666) and the Risk Management for the 21st Century Act (S. 1580). Earlier analysis reported in FAPRI Policy Working Paper #04-99 concentrated on the aggregate net farm income and government outlay impacts. The representative farm analysis is conducted for several types of farms, including both irrigated and non-irrigated cotton farms in Tom Green County, Texas; dryland wheat farms in Morton County, North Dakota and Sumner County, Kansas; and a corn farm in Webster County, Iowa. We consider additional factors that may shed light on the differential impacts of the two plans. 1. Farm-level income impacts under alternative weather scenarios. 2. Additional indirect impacts, such as a change in ability to obtain financing. 3. Implications of within-year price shocks. Our results indicate that farmers who buy crop insurance will increase their coverage levels under S. 1580. Farmers with high yield risk find that the 65 percent coverage level maximizes expected returns, but some who feel that they obtain other benefits from higher coverage will find that the S. 1580 subsidy schedule significantly lowers the cost of obtaining the additional coverage. Farmers with lower yield risk find that the increased indemnities from additional coverage will more than offset the increase in producer premium. In addition, because S. 1580 extends its increased premium subsidy percentages to revenue insurance products, farmers will have an increased incentive to buy revenue insurance. Differences in the ancillary benefits from crop insurance under the baseline and S. 1580 would be driven by the increase in insurance participation and buy-up. Given the same levels of insurance participation and buy-up, the ancillary benefits under the two scenarios would be the same.

Children in the welfare state. A social investment approach

Children occupy centre-stage in any new welfare equilibrium. Failure to support families may produce either of two undesirable scenarios. We shall see a society without children if motherhood remains incompatible with work. A new family policy needs to recognize that children are a collective asset and that the cost of having children is rising. The double challenge is to eliminate the constraints on having children in the first place, and to ensure that the children we have are ensured optimal opportunities. The simple reason why a new social contract is called for is that fertility and child quality combine both private utility and societal gains. And like no other epoch in the past, the societal gains are mounting all-the-while that families’ ability to produce these social gains is weakening.In the following 1 analyze the twin challenges of fertility and child development. I then examine which kind of policy mix will ensure both the socially desired level of fertility and investment in our children? The task is to identify a Paretian optimum that will maximize efficiency gains and social equity simultaneously.

Life-Cycle Effects on Household Expenditures: A Latent-Variable Approach

Using data from the Spanish household budget survey, we investigate life- cycle effects on several product expenditures. A latent-variable model approach is adopted to evaluate the impact of income on expenditures, controlling for the number of members in the family. Two latent factors underlying repeated measures of monetary and non-monetary income are used as explanatory variables in the expenditure regression equations, thus avoiding possible bias associated to the measurement error in income. The proposed methodology also takes care of the case in which product expenditures exhibit a pattern of infrequent purchases. Multiple-group analysis is used to assess the variation of key parameters of the model across various household life-cycle typologies. The analysis discloses significant life-cycle effects on the mean levels of expenditures; it also detects significant life-cycle effects on the way expenditures are affected by income and family size. Asymptotic robust methods are used to account for possible non-normality of the data.