Economics - Research Publications
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ItemPrice Discrimination by Negotiation: a Field Experiment in Retail Electricity*(OXFORD UNIV PRESS INC, 2022-04-19)Abstract We use a field experiment to study price discrimination in a market with price posting and negotiation. Motivated by concerns that low-income consumers do poorly in markets with privately negotiated prices, we built a call center staffed with actors armed with bargaining scripts to reveal negotiated prices and their determinants. Our actors implement sequential bargaining games under incomplete information in the field. By experimentally manipulating how information is revealed, we generate sequences of price offers that allow us to identify price discrimination in negotiations based on retailer perceptions of consumers’ search and switching costs. We also document differences in price distributions between entrants and incumbents, reflecting differences in captivity of their respective consumer bases. Finally, we show that higher prices paid by lower-income subsidy recipients in our market is not due to discriminatory targeting; they can be explained by variation in consumer willingness and ability to search and bargain.
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ItemA Copula Type-Model for Examining the Role of Microbiome as a Potential Tool in Diagnosis(HINDAWI LTD, 2022-06-06)Continuous advancements in biotechnology are generating new knowledge and data sources that might be of interest for the insurance industry. A paradigmatic example of these advancements is genetic information which can reliably notify about future appearance of certain diseases making it an element of great interest for insurers. However, this information is considered by regulators in the highest confidentiality level and protected from disclosure. Recent investigations have shown that the microbiome can be correlated with several health conditions. In this paper, we examine the potential use of microbiome information as a potential tool for cardiovascular diagnosis. By using a recent dataset, we analyze the relation of some variables associated to coronary illnesses and several components of the microbiome in the organism by using a new copula-based multivariate regression model for compositional data in the predictor. Our findings show that the coabundance group associated to Ruminococcaceae-Bifidobacteriaceae has a negative impact on the age for nonsedentary individuals. However, one should be cautious with this conclusion since environmental conditions also influence the baseline microbiome.
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ItemEffect of voluntary Health Star Rating labels on healthier food purchasing in New Zealand: Longitudinal evidence using representative household purchase data(BMJ, 2022-01-01)Front-of-pack labelling (FoPL) aims to promote healthier diets by altering consumer food purchasing behaviour. We quantify the impact of the voluntary Health Star Rating (HSR) FoPL adopted by New Zealand (NZ) in 2014, on (i) the quantity of foods purchased by HSR scores and food groups and (ii) the quantities of different nutrients purchased. We used Nielsen HomeScan household purchasing panel data over 2013–2019, linked to Nutritrack packaged food composition data. Fixed effects analyses were used to estimate the association of HSR with product and nutrient purchasing. We controlled for NZ-wide purchasing trends and potential confounding at the household and product level. In 2019, HSR-labelled products accounted for 24% (2890) of 12 040 products in the dataset and 32% of purchasing volume. Of HSR-labelled products, 1339 (46%) displayed a rating of 4.0–5.0 stars and 556 (19%) displayed a rating of 0.5–2.0 stars. We found little or no association between HSR labelling and the quantities of different foods purchased. Introduction of HSR was, however, associated with lower sodium (−9%, 95% CI −13% to −5%), lower protein (−3%, 95% CI −5% to 0%) and higher fibre (5%, 95% CI 2% to 7%) purchases when purchased products carrying an HSR were compared with the same products prior to introduction of the programme. Robust evidence of HSR labelling changing consumer purchasing behaviour was not observed. The positive effect on nutrient purchasing of HSR-labelled foods likely arises from reformulation of products to achieve a better HSR label.
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ItemDividend and Capital Injection Optimization with Transaction Cost for Levy Risk Processes(SPRINGER/PLENUM PUBLISHERS, 2022-06-27)Abstract The optimal dividends problem has remained an active research field for decades. For an insurance company with reserve modelled by a spectrally negative Lévy process having finite first-order moment, we study the optimal impulse dividend and capital injection (IDCI) strategy for maximizing the expected accumulated discounted net dividend payment subtracted by the accumulated discounted cost of injecting capital. In this setting, the beneficiary of the dividends injects capital to ensure a non-negative risk process so that the insurer never goes bankrupt. The optimal IDCI strategy together with its value function is obtained. Besides, two numerical examples are provided to illustrate the features of the optimal strategies. The impacts of model parameters are also studied.
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ItemHow Retirement Affects Mental Health, Cognitive Skills and Mortality; An Overview of Recent Empirical Evidence(SPRINGER, 2022-07-29)Abstract Retiring is an individual labor market transition that affects the personal life of the workers involved and sometimes the life of their partners. This paper presents an overview of recent studies on the effects of retirement on mental health, cognitive ability and mortality. The results are all over the place but on average it seems like at retirement mental health improves, cognitive skills deteriorate and mortality is not affected. However, there is substantial effect heterogeneity. The range of outcomes is partly related to heterogeneity in terms of personal characteristics, type of job, institutional arrangements, and whether retiring was voluntary or mandatory. The variation in empirical findings makes it hard to see the forest for the trees and advocate evidence-based retirement policies that take health effects into account. Nevertheless, introducing more individual flexibility in the timing of retirement is a worthwhile policy alternative since this seems to be unambiguously beneficial for the health of workers retiring.
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ItemThe Dynamics of Structural Transformation in Australia, 1960-2020(WILEY, 2022-07-25)
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ItemThe impact of COVID-related economic shocks on household mental health in Pakistan(WILEY, 2022-07-13)We combine data collected just prior to the unfolding of COVID-19 with follow-up data from July 2020 to document the adverse economic effects of the pandemic and resulting impact on parental and child mental well-being in peri-urban Pakistan. 22% of the households in our sample are affected by job loss, with monthly income down 38% on average. Our difference-in-difference results show that job loss is associated with a 0.88 standard deviation (SD) increase in adult mental distress scores (K10), a 0.43 SD reduction in a Hope index of children's aspirations, agency and future pathways, and a 0.39 SD increase in children's depression symptoms. In addition, we observe higher levels of parental stress and anger reported by children, as well as an increase in reported prevalence of domestic violence. Overall, we document that the pandemic has disproportionately and negatively affected the economic and mental well-being of the most vulnerable households in our sample.
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ItemPrice effects of calling out market power: A study of the COVID-19 oil price shock(WILEY, 2022-05-19)Governments often make public announcements that call into question firms' misuse of market power. Yet little is known about how firms respond to them. We study gasoline retailers' price responses to antitrust announcements shaming them for price gouging during the COVID-19 pandemic. We identify price effects using a high-frequency event-study leveraging unique real-time station-level price data and well-identified, discrete antitrust announcements. We find evidence of announcement effects that depend on firms' preannouncement margins and hence exposure to being publicly shamed. Public statements by antitrust questioning firms' misuse of market power can indeed contain signals that affect equilibrium outcomes.
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ItemNo Preview AvailableModeling time varying risk of natural resource assets: Implications of climate change(WILEY, 2022-01-01)A multivariate GARCH model of natural resources is specified to capture the effects of time varying portfolio risk. A special feature of the model is the inclusion of realized volatility for natural resource assets that are available at multiple frequencies as well as being sensitive to sudden changes in climatic conditions. Natural resource portfolios under climate change are simulated from bootstrapping schemes as well as being derived from global climate model projections. Both approaches are applied to a multiasset water portfolio model consisting of reservoir inflows, rainwater harvesting, and desalinated water. The empirical results show that while reservoirs remain the dominant water asset, adaptation to climate change involves increased contributions from rainwater harvesting and more frequent use of desalinated water. It is estimated that climate change increases annual water supply costs by between 7% and 44% over a 20‐year forecast horizon.