Please select from the titles below:
- Estimating the Permanent and Transitory Components of the UK Business Cycle
- Time Consistency and the Development of Vaccines to Treat HIV/AIDS in Africa
- The Effect of Unionisation on Wages in Great Britain: Estimates from the Labour Force Survey
- Asymmetric Unit Root Tests in the Presence of Innovation Variance Breaks: Threshold versus Consistent-Threshold Estimation
- The Rate of Depreciation of Technological Knowledge: Evidence from Patent Renewal Data
- Using Choice Experiments for Non-Market Valuation
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Estimating the Permanent and Transitory Components of the UK Business Cycle (p.1)
by T C Mills and P Wang We estimate a model that incorporates two key features of business cycles, comovement among economic variables and switching between regimes of boom and slump, to quarterly UK data for the last four decades. Common permanent and transitory factors, interpreted as composite indicators of coincident variables, and estimates of turning points from one regime to the other, are extracted from the data by using the Kalman filter and maximum likelihood estimation. Both comovement and regime switching are found to be important features of the UK business cycle. The components produce sensible representations of the cycles and the estimated turning points agree fairly well with independently determined chronologies.
Time Consistency and the Development of Vaccines to Treat HIV/AIDS in Africa (p.15)
by B M Craven, C Fiala, A Shiers and G T Stewart
AIDS is perceived to represent an unprecedented medical, political and economic challenge to African and world leaders. This paper examines the economics of pricing and supplying drugs and vaccines in the context of AIDS and HIV. It addresses the time consistency and other economic issues associated with patented drugs and research into vaccines for diseases that are mainly prevalent in poor countries. The paper examines the financial implications of treating HIV/AIDS with the medical procedures currently used to treat patients in industrialised countries. The paper concludes first that the time consistency problem is not the main obstacle preventing research into developing an HIV vaccine and thus addressing AIDS in Africa. Second, it is impracticable, at present, to mobilise adequate financial and conventional medical resources to address the perceived HIV/AIDS problem in Africa. Third, the most practical and appropriate health policy to tackle the African problem is by health education.
The Effect of Unionisation on Wages in Great Britain: Estimates from the Labour Force Survey (p.33)
by N C O’Leary, P D Murphy and D H BlackabyThis paper provides benchmark estimates of the impact that trade unions have on the wage rates paid to workers in Great Britain using data from the Labour Force Survey. This is done for a number of gender and occupational subgroups of the population using information on both union membership and union coverage.
Asymmetric Unit Root Tests in the Presence of Innovation Variance Breaks: Threshold versus Consistent-Threshold Estimation
(p.47)
by S Cook and N ManningKim et al. (2002) demonstrate that the Dickey-Fuller unit root test can experience severe size distortion when a large decrease in the innovation variance occurs early in the sample period, leading to spurious rejection of the null. We extend this analysis to the case of spurious identification of asymmetric stationarity by the MTAR test of Enders and Granger (1998) under similar circumstances. In terms of unit root testing, the properties of the MTAR test are inferior to those of the Dickey-Fuller test. However, the MTAR test with consistent-threshold estimation outperforms both the Dickey-Fuller and the original MTAR tests when considering the unit root hypothesis; size distortion being dramatically reduced. The consistent MTAR test is also to be preferred to the original MTAR test when testing the joint hypothesis of non-stationarity and symmetry since the original test can display considerable undersizing. However, the size of the consistent MTAR test is approximately nominal in all experiments except when extreme changes in innovation variance occur towards the beginning of the sample period.
The Rate of Depreciation of Technological Knowledge: Evidence from Patent Renewal Data
(p.59)
by D Bosworth and G Jobome This paper is critical of studies that assume the rate of depreciation of technological knowledge is exogenously given and constant. It argues that the development of rival inventions and/or the existence of a pool of inventions from which spillovers take place impact directly on the size and value of the stock of knowledge. Patent data seem ideal to test such hypotheses as patents represent a store of R&D knowledge, and the declining value of the exclusive right to use an invention is reflected in the failure to renew patent protection. The empirical model includes not only rival invention and spillover effects, but other variables suggested by the existing literature, such as renewal costs and investment activity (representing new niches for inventions). A new quasi-panel patent data set has been constructed, tracing the survival characteristics of each cohort of patents over the period 1950-75. The data allow the first empirical tests of whether the hazard rate from the patent stock is duration dependent, which we demonstrate is linked to the highly skewed distribution of the value of patents. The long sample period also allows an exploration of whether the influences on the obsolescence of technological knowledge have changed over the post-War period.
Using Choice Experiments for Non-Market Valuation
(p.83)
by F Alpizar, F Carlsson and P Martinsson This paper provides the latest research developments in the method of choice experiments applied to valuation of non-market goods. Choice experiments, along with the, by now, well-known contingent valuation method, are very important tools for valuing non-market goods and the results are used in both cost-benefit analyses and litigations related to damage assessments. The paper should provide the reader with both the means to carry out a choice experiment and to conduct a detailed critical analysis of its performance in order to give informed advice about the results. A discussion of the underlying economic model of choice experiments is incorporated, as well as a presentation of econometric models consistent with economic theory. Furthermore, a detailed discussion on the development of a choice experiment is provided, which in particular focuses on the design of the experiment and tests of validity. Finally, a discussion on different ways to calculate welfare effects is presented.
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