The chapter reviews and extends the theory of exact and superlative index numbers. Exact index numbers are empirical index number formula that are equal to an underlying…
The chapter reviews and extends the theory of exact and superlative index numbers. Exact index numbers are empirical index number formula that are equal to an underlying theoretical index, provided that the consumer has preferences that can be represented by certain functional forms. These exact indexes can be used to measure changes in a consumer's cost of living or welfare. Two cases are considered: the case of homothetic preferences and the case of nonhomothetic preferences. In the homothetic case, exact index numbers are obtained for square root quadratic preferences, quadratic mean of order r preferences, and normalized quadratic preferences. In the nonhomothetic case, exact indexes are obtained for various translog preferences.
- exact index numbers
- superlative index numbers
- flexible functional forms
- Fisher ideal index
- normalized quadratic preferences
- mean of order r indexes
- homothetic preferences
- nonhomothetic preferences
- cost of living indexes
- the measurement of welfare change
- translog functional form
- duality theory
- Allen quantity index
This paper deals with estimation of risk and the risk preference function when producers face uncertainties in production (usually labeled as production risk) and output…
This paper deals with estimation of risk and the risk preference function when producers face uncertainties in production (usually labeled as production risk) and output price. These uncertainties are modeled in the context of production theory where the objective of the producers is to maximize expected utility of normalized anticipated profit. Models are proposed to estimate risk preference of individual producers under (i) only production risk, (ii) only price risk, (iii) both production and price risks, (iv) production risk with technical inefficiency, (v) price risk with technical inefficiency, and (vi) both production and price risks with technical inefficiency. We discuss estimation of the production function, the output risk function, and the risk preference functions in some of these cases. Norwegian salmon farming data is used for an empirical application of some of the proposed models. We find that salmon farmers are, in general, risk averse. Labor is found to be risk decreasing while capital and feed are found to be risk increasing.
This chapter suggests a robust Hausman and Taylor (1981), hereafter HT, estimator that deals with the possible presence of outliers. This entails two modifications of the classical HT estimator. The first modification uses the Bramati and Croux (2007) robust Within MS estimator instead of the Within estimator in the first stage of the HT estimator. The second modification uses the robust Wagenvoort and Waldmann (2002) two-stage generalized MS estimator instead of the 2SLS estimator in the second step of the HT estimator. Monte Carlo simulations show that, in the presence of vertical outliers or bad leverage points, the robust HT estimator yields large gains in MSE as compared to its classical Hausman–Taylor counterpart. We illustrate this robust version of the HT estimator using an empirical application.
To fully accommodate the correlations between semiconductor product demands and external information such as the end market trends or regional economy growth, a linear…
To fully accommodate the correlations between semiconductor product demands and external information such as the end market trends or regional economy growth, a linear dynamic system is introduced in this chapter to improve forecasting performance in supply chain operations. In conjunction with the generic Gaussian noise assumptions, the proposed state-space model leads to an expectation-maximization (EM) algorithm to estimate model parameters and predict production demands. Since the set of external indicators is of high dimensionality, principal component analysis (PCA) is applied to reduce the model order and corresponding computational complexity without loss of substantial statistical information. Experimental study on certain real electronic products demonstrates that this forecasting methodology produces more accurate predictions than other conventional approaches, which thereby helps improve the production planning and the quality of semiconductor supply chain management.
In response to common criticisms on the appropriateness of mean-variance in asset allocation decisions involving hedge funds, we offer a mean-Gini framework as an…
In response to common criticisms on the appropriateness of mean-variance in asset allocation decisions involving hedge funds, we offer a mean-Gini framework as an alternative. The mean-Gini framework does not require the usual normality assumption concerning return distributions. We also evaluate empirically the differences in allocation outcomes between the two frameworks using historical data. The differences turn out to be significant. The evidence thus confirms the inappropriateness of the mean-variance framework and enhances the attractiveness of mean-Gini for this asset class.
Deposit insurance is a key element in modern banking, as it guarantees the financial safety of deposits at depository financial institutions. It is necessary to have at…
Deposit insurance is a key element in modern banking, as it guarantees the financial safety of deposits at depository financial institutions. It is necessary to have at least a dual fair premium rate system based on creditworthiness of financial institutions, as considering singular premium system for all banks will have moral hazard. This paper aims to develop theoretical and empirical model for calculating dual fair premium rates.
The definition of a fair premium rate in this paper is a rate that covers the operational expenditures of the deposit insuring organization, provides it with sufficient funds to enable it to pay a certain percentage share of deposit amounts to depositors in case of bank default and provides it with sufficient funds as precautionary reserves. To identify and classify healthier and more stable banks, the authors use credit rating methods that use two major dimensional reduction techniques. For forecasting nonperforming loans (NPLs), the authors develop a model that can capture both macro shocks and idiosyncratic shocks to financial institutions in a vector error correction model.
The response of NPLs/loans to macro shocks and idiosyncratic innovations shows that using a model with macro variables only is insufficient, as it is possible that under favorable economic conditions, some banks show negative performance due to bank level reasons such as mismanagement or vice versa. The final results show that deposit insurance premium rate needs to be vary based on banks’ creditworthiness.
The results provide interesting insight for financial authorities to set fair deposit insurance premium rate. A high premium rate reduces the capital adequacy of individual financial institutions, which endangers the stability of the financial system; a low premium rate will reduce the security of the financial system.
This study aims to treat the development and application of sequence characterised amplified region (SCAR) markers for the detection of plant based adulterants (dried red beet pulp and powdered Ziziphus nummularia fruits) in traded ground chilli.
Adulterant‐specific DNA fragments (red beet pulp specific – “Beet 01” and Z. nummularia specific – “Ziz 01”) identified by random amplified polymorphic DNA polymerase chain reaction (RAPD‐PCR) analysis were cloned and sequenced for SCAR marker development. Red beet pulp specific SCAR primer pair, B1, and Z. nummularia specific SCAR primer pair, Z1, were designed from the corresponding RAPD marker sequences to amplify SCAR markers of 320 bp and 389 bp, respectively. The utility of the SCAR markers for adulterant detection was verified in model blends of chilli powder with the adulterants. Six commercial samples of ground chilli powder were analysed using the SCAR markers.
SCAR markers could detect the adulterants at a concentration as low as 10 g adulterant kg−1 of blended sample. The Z. nummularia SCAR marker could detect the presence of Z. nummularia fruit adulteration in one of the commercial samples. All the market samples tested were free from red beet pulp adulteration.
The PCR‐based method developed in the study is simple, rapid, and sensitive and has the potential to be developed into a quantitative analytical method and for commercial PCR kits for the large‐scale screening of ground chilli to detect and prevent plant‐based adulterants. The work has public health significance too, as ground chilli is one of the major spices consumed worldwide.
The study is the first report on the development of SCAR markers for adulterant detection in ground chilli. This work has relevance, as adulteration is a major concern of the sanitary and phytosanitary issues of the World Trade Organization (WTO) agreement.
A new numerical method is presented for the simulation of flows of incompressible fluids in plane or axisymmetric flows. Under certain assumptions, the physical domain can…
A new numerical method is presented for the simulation of flows of incompressible fluids in plane or axisymmetric flows. Under certain assumptions, the physical domain can be transformed into a rectangular domain. This method can involve free surface flow problems. In Newtonian and non‐Newtonian cases, the relevant equations are non‐linear and the solution is carried out in the transformed domain where the stream lines are parallel straight lines.
A special class of graph, the “systems net,” is defined The set of all systems nets is broken down into equivalence classes, which are shown to be partially ordered by a…
A special class of graph, the “systems net,” is defined The set of all systems nets is broken down into equivalence classes, which are shown to be partially ordered by a particular type of condensation, the “simplification.” Finally, every class of systems net is shown to have a unique maximal simplification, and applications of the concepts of “systems net” and “simplification” to automaton modeling are discussed.
Introduction The response of aggregate labour supply to changes in the real wage has been a question of interest to economists for some time. For example, the notion of a backward‐bending supply curve for labour is commonly known, though not universally accepted. The question is of more than academic interest; it has direct relevance to tax policy, because an income tax in effect lowers the real wage, which is then likely to cause people to substitute out of work into leisure. This article evaluates the aggregate labour supply curve from within a household production framework and finds that, under plausible circumstances, the aggregate labour supply curve is likely to be very inelastic. (The model here actually considers only a subset of the long‐run aggregate supply of labour. Long‐run questions of fertility are not addressed here, nor is the labour force participation rate, which might vary in the short run in response to a change in the real wage. This article considers only the work effort of someone who is already in the labour force.) For a case derived below, the aggregate labour supply curve is always perfectly inelastic, meaning that for proportional changes in the tax structure, the quantity of labour supplied will not be a function of the tax rate. (Gwartney and Stroup give a good overview of the traditional arguments along with their own argument that an income tax increase must reduce work effort).