1,720,993 research outputs found
Revealed Bounded Rationality: testing Present Bias in a Rational Addiction Equation
No full textThis paper deals with one of the main theoretical and empirical problems associated with the rational addiction model, namely that the demand equation derived from the rational addiction theory is not empirically distinguishable from models with forward-looking behavior, but with time-inconsistent preferences. The implication is that, even when forward-looking behavior can be convincingly supported, this equation cannot provide evidence in favor of time-consistent preferences against a model with dynamic inconsistency. In fact, we show that the possibility of testing for exponential versus non-exponential time discounting is nested within the rational addiction model. We propose a test of time consistency that uses only the information obtained from the general rational addiction demand equation and the price effects. A pseudo panel of Italian households is used to test for rational addiction in tobacco consumption. GMM estimators are used to deal with errors in variables and unobserved heterogeneity. The results conform to the theoretical predictions. We find evidence that tobacco consumers are forward-looking, but time-inconsistent. The values of the derived present bias and long run discount parameters are statistically significant and in line with the literature
Building the Knowledge Stock: Lags, Depreciation, and Uncertainty in R&D Investment and Link with Productivity Growth
No full textThe search for an appropriate methodology to investigate the relation between R&D investment,
knowledge stock and productivity growth is the main purpose of the paper. In
analogy with physical assets, we present a model of knowledge capital formation which
allows the calculation of the relevant user cost, as well. The proposed model accumulates
R&D investment based on a stochastic gestation lag and a geometric depreciation
of the stock. The basic parameters underlying the lag structure differ according to the
types of research expenditure. The approach is applied to public R&D investment in
Italian agriculture; the results provide interesting information about the economic structure
of public research effort in Italian agriculture and plausible estimates of its internal rate
of return
Modelling technical change in Italian agriculture: A latent variable approach
No full textThis paper presents an alternative approach to the measurement of technical change. It is based on the latent variable level
of rechnology that enters explicitly the input demand system and on a hypothesis about the innovation generating process. By
adding measurement error equations, the behavioral system can be viewed as a Multiple Indicatorshlultiple Causes (MIMIC)
model. The parameter estimates are obtained with a maximum likelihood estimator which involves the implicit covariance
matrix. The analysis refers to Italian agriculture and the results provide some evidence on the nature and level of technical
change during the years 1961-199
Rational Addiction and Time Consistency: an Empirical Test
Full text linkThis paper deals with one of the main empirical problems associated with the rational addiction model,
namely that the demand equation derived from the rational addiction theory is not empirically
distinguishable from models with forward looking behavior, but with time inconsistent preferences. The
implication is that, even when forward‐looking behavior is supported by data, the standard rational
addiction equation cannot identify time consistency in preferences. In fact, we show that the possibility
of testing for exponential versus non‐exponential time discounting is nestled within the general rational
addiction model. We propose a test that uses only the information obtained from the general
specification and the price effects. We use a panel of Italian individuals to estimate a rational addiction
model for tobacco. GMM estimators deal with errors in variables and unobserved heterogeneity. The
results conform to the theoretical predictions. We find evidence that tobacco consumers are forward
looking. Our test of time consistency does not reject the hypothesis that smokers in our sample actually
discount exponentially
Public R&D investment and cost structure in Italian agriculture, 1960-1995
No full textThis paper deals with the role of public research in Italian agriculture during the period
1960–1995. A short-run Generalised Leontief cost function capable of accommodating
quasi-fixed factors and variable returns is used. Temporary equilibrium and scale
economies are investigated with special emphasis on the methodological implications
of R&D stock and the consistency of the estimated model with microeconomic theory.
Comparing the relevant shadow and rental price provides evidence on under- (over)-
investment and the rationale driving public research expenditure in agriculture. A
formal test of the induced innovation hypothesis and the calculation of the internal
rate of returns are also presented
Price-induced technical progress in Italian agriculture
No full textIn this paper we aim at investigating the price-induced innovation hypothesis in Italian agriculture.
We generalize the framework of analysis proposed by Peeters and Surry (2000). This generalization includes a
short-run specification of the dual technology as well as a quadratic spline in a time variable. We argue that the
temporary equilibrium setting gives a more realistic representation of how relative prices may steer innovation and
variable input bias over time. The quadratic function has desirable properties with respect to the splined variable,
i.e., a more flexible treatment of exogenous technical change. Results provide evidence in favour of the price-induced
innovation in Italian agriculture from 1951 to 1991
Addiction and Alcohol Consumption: evidence from Italian Data
No full textIn this paper we estimate the demand for alcoholic beverages in Italy following the rational addiction
framework by Becker and Murphy (1988) and using a GMM estimator. To increase confidence
in the reliability of this framework we use two different data sets: (i) a time series of annual
aggregate alcohol consumption from 1960 to 2002 supplied by ISTAT; (ii) a time series of household
data on wine, beer and liquor consumption recorded on a four-week basis from 1999:3 to
2004:4 and supplied by ISMEA-Nielsen. Both data sets support the hypothesis that alcohol consumers
are actually forward-looking. Past consumption is significant in explaining current consumption
thus detecting the addictive nature of alcohol. Short and long run price elasticities and the income
elasticity of demand are also calculated. Interestingly, the long run income elasticity of demand, as
derived from the rational addiction model, is higher than one both for aggregate and specific products
so alcoholic beverages turn out to be luxury goods
Technology and efficiency in a panel of Italian dairy farms: an SGM restricted cost function approach
No full textThis article employs a short-term specification of the symmetric generalised McFadden (SGM) cost function capable of
accommodating quasi-fixed factors and variable returns. Temporary equilibrium and scale economies are investigated while
maintaining the consistency of the estimated model with microeconomic theory and approximation properties. It also makes
use of a two-step procedure to estimate first the technology parameters and then time-varying efficiency at farm level. No
distributional assumptions are required on efficiency as we consider a fixed effect model. A balanced panel of Italian dairy
farins during the years from 1980 to 1992 serves as the case study. The results suggest a rigid productive structure during the
pre- and post-quota period. Moreover, Italian milk producers are found to exhibit considerable excess capacity and rather low
input technical efficiency
International Trade, Consumer Interests and Reform of the Common Agricultural Policy
No full textIn 2008 the European Union (EU) has launched an important debate on the future of the EU budget from 2013, when the present financial perspective comes to an end. This discussion is to cover all aspects of EU revenue and expenditure, including that on the Common Agricultural Policy (CAP). The CAP has been radically transformed in recent years, but the issue of its reform, including its goals, its effectiveness in reaching them and the question of division of responsibility and financing between the EU and member states, is once again at the centre of attention.
This review of the CAP is part of an ongoing process of change characterized by various common trends: a gradual move towards decoupled agricultural support; an increased flexibility for the member states in the implementation of measures; a strengthening of rural development policy; a tentative correction of the bias in favour of large farmers through the use of modulation and reallocation.
Compared with the traditional price support, these reforms undoubtedly represent an improvement. However, the CAP can still be criticised on numerous counts: from the cost of the EU budget to the high prices to EU consumers; from the failure to improve income distribution within the agricultural sector to negative environmental effects; from the need to ensure food quality and safety to the continuation of high levels of protection and the influence of international trade negotiations.
The aim of this book is to address certain of these issues in more detail and to contribute to the debate on the present state and future prospects of the CAP and other EU policies. This collection features well-known experts in the field who took part in the conference organised by the Faculty of Economics of Siena University to remember Secondo Tarditi, professor of Agricultural Economics. Many of the ideas presented here are original and controversial and intended to fuel the debate on this important topic. For instance, there are various proposals for the EU budget, the division of responsibilities between the EU and its member states, and the shape of the CAP post-2013.
CONTENTS
Foreword Giuseppe Barbero 1. Introduction Susan Senior Nello and Pierpaolo Pierani 2. A CAP for the Whole Community John S. Marsh 3. Consumers and the Political Economy of European Agricultural and Food Policies Johan F. M. Swinnen, Martha Negash and Thijs Vandemoortele 4. Sustainable Food Consumption and Government Responsibility Stefan Tangermann 5. Pillar II: A Real Improvement of the CAP? Ulrich Koester and Susan Senior Nello 6. Mountain Regions as Natural Laboratories for the Evaluation of Agricultural Policies Geremia Gios and Roberta Raffaelli 7. The UK Rebate, the budget and the post-2013 CAP Faced with Fiscal Federalism Louis-Pascal Mahé, Hugo Naudet and Marie-Alix Roussillon-Montfort 8. Multilateral Trade Negotiations and the CAP Giovanni Anania 9. Conclusions: Pointers to a Future CAP Kenneth J. Thomso
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