This study examines the impact of temperature on human well-being using approximately 80 million geo-tagged tweets from Argentina spanning 2017–2022. Employing text mining techniques, we derive two quantitative estimators: sentiments and a social media aggression index. The Hedonometer Index measures overall sentiment, distinguishing positive and negative ones, while social media aggressive behavior is assessed through profanity frequency. Non-linear fixed effects panel regressions reveal a notable negative causal association between extreme heat and the overall sentiment index, with a weaker relationship found for extreme cold. Our results highlight that, while heat strongly influences negative sentiments, it has no significant effect on positive ones. Consequently, the overall impact of extremely high temperatures on sentiment is predominantly driven by heightened negative feelings in hot conditions. Moreover, our profanity index exhibits a similar pattern to that observed for negative sentiments.

Experimental research on first price sealed bid auctions has usually involved repeated settings with information feedback on winning bids and payoffs after each auction round. Relative to the risk neutral Nash equilibrium, significantly higher bidding has been reported. The present paper reports the results of experimental first price auctions with n = 7 where feedback on payoffs and winning bids is withheld. Under these conditions, average bidding is below the risk neutral Nash equilibrium prediction but converges to it with repetition.

This paper empirically compares the use of straightforward verses more complex methods to estimate public goods game data. Five different estimation methods were compared holding the dependent and explanatory variables constant. The models were evaluated using a large out-of-sample cross-country public goods game data set. The ordered probit and tobit random-effects models yielded lower p values compared to more straightforward models: ordinary least squares, fixed and random effects. However, the more complex models also had a greater predictive bias. The straightforward models performed better than expected. Despite their limitations, they produced unbiased predictions for both the in-sample and out-of-sample data.

This paper specifies the panel data experimental design condition under which ordinary least squares, fixed effects, and random effects estimators yield identical estimates of treatment effects. This condition is relevant to the large body of laboratory experimental research that generates panel data. Although the point estimates and the true standard errors of the estimated average treatment effects are identical across the three estimators, the estimated standard errors differ. A standard F test as well as asymptotic reasoning guide the choice of which estimated standard errors are the appropriate ones to use for statistical inference.

Accurately estimating risk preferences is of critical importance when evaluating data from many economic experiments or strategic interactions. I use a simulation model to conduct power analyses over two lottery batteries designed to classify individual subjects as being best explained by one of a number of alternative specifications of risk preference models. I propose a case in which there are only two possible alternatives for classification and find that the statistical methods used to classify subjects result in type I and type II errors at rates far beyond traditionally acceptable levels. These results suggest that subjects in experiments must make significantly more choices, or that traditional lottery pair batteries need to be substantially redesigned to make accurate inferences about the risk preference models that characterize a subject’s choices.

Building upon recent developments in production function identification and decomposition methods, this paper investigates the sources of output and productivity growth among China’s listed manufacturing companies from 2000 to 2022. While previous studies on China’s manufacturing have predominantly focused on the period preceding 2007, our study extends the analysis to a broader timeframe and divide it into four sub-periods to accommodate diverse economic conditions and varying growth rates. We provide new insights into the Chinese economy during a period marked by gradual economic transformation. Specifically, we first decompose industry output growth into factor deepening and firm productivity progress within each sub-period. To account for heterogeneity across firms in terms of production technology and sources of growth, we employ a nonparametric production function and decompose firm output growth at both the mean and different quantiles of the output distribution. We find that increased materials usage and productivity growth are primary growth drivers. However, the contribution of productivity experiences a significant decline, particularly in recent years and among median-sized and large firms. Furthermore, we examine China’s industry aggregate productivity growth and its origins among state-invested, foreign-invested, and domestic private firms. Our findings suggest that reforms among state firms are the largest contributor to industry productivity growth before the 2008 financial crisis, whereas productivity progress of domestic private firms emerges as the sole significant driver in recent years. Additionally, there is no evidence of improvements in output reallocation efficiency within China’s manufacturing sector throughout our sample period.

This paper presents the first meta-analysis of the ‘Taking Game,’ a variant of the Dictator Game where participants take money from recipients instead of giving. Upon analyzing data from 39 experiments, which include 123 effect sizes and 7262 offers made by dictators, we discovered a significant framing effect: dictators are more generous in the Taking Game than in the Dictator Game (Cohen's d = 0.26, p < 0.0001), leaving approximately 35.5 percent of the stakes to recipients in the former as opposed to 27.5 percent in the latter. The difference is higher when the participants have earned their endowment before sharing or when the recipient is a charity. Consistent with the standard literature on giving, we also find that participants take less from a charity than from a standard recipient, take less when payoffs are hypothetical, or when recipients have previously earned their endowment. We also find that women (non-students) take less than men (students). Finally, it appears that participants from non-OECD countries leave more money to recipients than participants from OECD countries.

In Africa, rangeland ecosystems have been exploited due to heavy and unsustainable grazing. Policy and institutional mechanisms such as integrating silvopastoral systems with sustainable grazing practices have been devised to mitigate the negative effects. In this study, we investigated whether the uptake of sustainable grazing management in the form of controlled grazing spurs investment in multipurpose trees (MPTs) and enhances income. Using instrumental variable regression, we find that controlled grazing increases not only the propensity to plant MPTs but also the number of tree species. More importantly, IV and treatment effect results indicate that controlled grazing enhances income from MPTs.

Can we predict fine wine and alcohol prices? Yes, but it depends on the forecasting horizon. We make this point by considering the Liv-ex Fine Wine 100 and 50 Indices, the retail and wholesale alcohol prices in the United States for the period going from January 1992 to March 2022. We use rich and diverse datasets of economic, survey, and financial variables as potential price drivers and adopt several combination/dimension reduction techniques to extract the most relevant determinants. We build a comprehensive set of models and compare forecast performances across different selling levels and alcohol categories. We show that it is possible to predict fine wine prices for the 2-year horizon and retail/wholesale alcohol prices at horizons ranging from 1 month to 2 years. Our findings stress the importance of including consumer survey data and macroeconomic factors, such as international economic factors and developed markets equity risk factors, to enhance the precision of predictions of retail/wholesale (fine wine) prices.

By examining the econometric interrelationships of rice export prices of India, Thailand, Vietnam, Pakistan, the U.S., Argentina, Brazil, and Uruguay, this study examines the most influential rice-exporting countries in the international rice export market. The sampled countries are the source of more than 80% of the global rice exports. In the process, this study relies on online data portals of the United Nations and country-level sources for aromatic and non-aromatic rice export price information from India, Pakistan, and Thailand. This study employed the Prais-Winsten and Autoregressive Distributive Lag (ARDL) estimation processes with the error correction procedure. Combining the findings from both models, this study concludes that in terms of interactions, the non-aromatic long-grain rice price of the U.S., and the aromatic rice price of Pakistan are the most correlated prices in the international rice market. Considering the number of countries influenced by the price of a given country, our results indicate that Vietnam is the price leader in the non-aromatic long-grain market, followed by Argentina, Brazil, and India. India, the largest exporter, is the fourth top price leader. In the case of aromatic rice, Thailand is the absolute leader. Many countries in Asia and Africa rely on rice imports to meet domestic demand, where the food security situation is already precarious. Based on the findings, this study suggests closely monitoring rice production and export trends of Vietnam, Argentina, Brazil, India and Thailand to provide early warning when necessary to better manage supply shocks in the international rice market.

The canonical income process, including autoregressive, transitory, and fixed effect components, is routinely used in macro and labor economics. We provide a guide for its estimation using quasidifferences, cataloging biases in the estimated parameters for various $N$, $T$, initial conditions, and weighting schemes. Using Danish administrative data on male earnings, estimation in quasidifferences yields divergent estimates of the autoregressive parameter for different weighting schemes, which conforms to our simulation results when the variance of transitory shocks is higher than that of persistent shocks, true persistence is high, and the persistent component’s variance in the first sample year is nonzero. We further apply quasidifferences to the data from a calibrated lifecycle model and find significant biases in the persistence of shocks and their insurance. Estimation of the income process using quasidifferences is reliable only when the variance of persistent shocks is higher than that of transitory shocks and the moments are equally weighted.

A theoretically consistent structural model facilitates definition and measurement of use and non-use benefits of ecosystem services. Unlike many previous approaches that utilize multiple stated choice situations, we apply this conceptual framework to a travel cost random utility model and a consequential single referendum contingent valuation research design for simultaneously estimating use and non-use willingness to pay for environmental quality improvement. We employ Monte Carlo generated data to evaluate properties of key parameters and examine the robustness of this method of measuring use and non-use values associated with quality change. The simulation study confirms that this new method, combined with simulated revealed and stated preference data can generally, but not always, be applied to successfully identify use and non-use values of various ecosystems while consistency is ensured.

Risk measurements are clearly central to risk management, in particular for banks, (re)insurance companies, and investment funds. The question of the appropriateness of risk measures for evaluating the risk of financial institutions has been heavily debated, especially after the financial crisis of 2008/2009. Another concern for financial institutions is the pro-cyclicality of risk measurements. In this paper, we extend existing work on the pro-cyclicality of the Value-at-Risk to its main competitors, Expected Shortfall, and Expectile: We compare the pro-cyclicality of historical quantile-based risk estimation, taking into account the market state. To characterise the latter, we propose various estimators of the realised volatility. Considering the family of augmented GARCH(p, q) processes (containing well-known GARCH models and iid models, as special cases), we prove that the strength of pro-cyclicality depends on the three factors: the choice of risk measure and its estimators, the realised volatility estimator and the model considered, but, no matter the choices, the pro-cyclicality is always present. We complement this theoretical analysis by performing simulation studies in the iid case and developing a case study on real data.

We examine the effect of corruption control on efficiency and its implications for efficiency spillovers by a stochastic frontier model. Our dataset covers 102 countries from 1996 to 2014. We find a positive relationship between corruption control and efficiency. If neighboring countries have difficulty in handling corruption, the country would be negatively affected by its neighbors' corruption through efficiency spillovers. We then compare the efficiency differences across countries for three time periods: 1996–2002, 2002–2008, and 2008–2014. On average, technical efficiencies slightly increased in the second period compared to the first period. In the third period, the efficiencies declined, particularly in China.

This article presents estimates of the financial costs incurred by Portugal with the Colonial War (1961-1974). The results obtained show that, on average, the extraordinary expenses most directly related with the war represented 22% of Portuguese state expenditure, equivalent to 3.1% of GDP. They also show that the total costs incurred by Portugal with the Colonial War amounted to between 21.8 billion euros and 29.8 billion euros, at today's prices and in the present-day currency. By estimating a dynamic model, it was also possible to identify a positive relationship between the extraordinary military expenditure on the defence and security of the overseas provinces—which included the budgetary costs of war—and Portuguese economic growth. The conclusions reached represent a valuable contribution to contemporary economic history.

Telematicsdevices installed in insured vehicles provide actuaries with new risk factors, such as the time of the day, average speeds, and other driving habits. This paper extends the multivariate mixed model describing the joint dynamics of telematics data and claim frequencies proposed by Denuit et al. (2019a) by allowing for signals with various formats, not necessarily integer-valued, and by replacing the estimation procedure with the Expected Conditional Maximization algorithm. A numerical study performed on a database related to Pay-How-You-Drive, or PHYD motor insurance illustrates the relevance of the proposed approach for practice.

Spatial data are a rich source of information for actuarial applications: knowledge of a risk’s location could improve an insurance company’s ratemaking, reserving or risk management processes. Relying on historical geolocated loss data is problematic for areas where it is limited or unavailable. In this paper, we construct spatial embeddings within a complex convolutional neural network representation model using external census data and use them as inputs to a simple predictive model. Compared to spatial interpolation models, our approach leads to smaller predictive bias and reduced variance in most situations. This method also enables us to generate rates in territories with no historical experience.

As a benchmark mortality model in forecasting future mortality rates and hedging longevity risk, the widely employed Lee–Carter model (Lee, R.D. and Carter, L.R. (1992) Modeling and forecasting U.S. mortality. Journal of the American Statistical Association, 87, 659–671.) suffers from a restrictive constraint on the unobserved mortality index for ensuring model’s identification and a possible inconsistent inference. Recently, a modified Lee–Carter model (Liu, Q., Ling, C. and Peng, L. (2018) Statistical inference for Lee–Carter mortality model and corresponding forecasts. North American Actuarial Journal, to appear.) removes this constraint and a simple least squares estimation is consistent with a normal limit when the mortality index follows from a unit root or near unit root AR(1) model with a nonzero intercept. This paper proposes a bias-corrected estimator for this modified Lee–Carter model, which is consistent and has a normal limit regardless of the mortality index being a stationary or near unit root or unit root AR(1) process with a nonzero intercept. Applications to the US mortality rates and a simulation study are provided as well.

Adverse weather-related risk is a main source of crop production loss and a big concern for agricultural insurers and reinsurers. In response, weather risk hedging may be valuable, however, due to basis risk it has been largely unsuccessful to date. This research proposes the Lévy subordinated hierarchical Archimedean copula model in modelling the spatial dependence of weather risk to reduce basis risk. The analysis shows that the Lévy subordinated hierarchical Archimedean copula model can improve the hedging performance through more accurate modelling of the dependence structure of weather risks and is more efficient in hedging extreme downside weather risk, compared to the benchmark copula models. Further, the results reveal that more effective hedging may be achieved as the spatial aggregation level increases. This research demonstrates that hedging weather risk is an important risk management method, and the approach outlined in this paper may be useful to insurers and reinsurers in the case of agriculture, as well as for other related risks in the property and casualty sector.

Following the EU Gender Directive, that obliges insurance companies to charge the same premium to policyholders of different genders, we address the issue of calculating solvency capital requirements (SCRs) for pure endowments and annuities issued to mixed portfolios. The main theoretical result is that, if the unisex fairness principle is adopted for the unisex premium, the SCR at issuing time of the mixed portfolio calculated with unisex survival probabilities is greater than the sum of the SCRs of the gender-based subportfolios. Numerical results show that for pure endowments the gap between the two is negligible, but for lifetime annuities the gap can be as high as 3–4%. We also analyze some conservative pricing procedures that deviate from the unisex fairness principle, and find that they lead to SCRs that are lower than the sum of the gender-based SCRs because the policyholders are overcharged at issuing time.