Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112129
Pierpaolo Battigalli , Giovanni Di Bartolomeo , Stefano Papa
We examine the interplay between guilt aversion and inequality in decision-making, specifically in the context of a dictator game. Considering different initial allocations of the surplus, we investigate how the material opportunity cost of reducing inequality influences sharing behavior, revealing a complex relationship among guilt-driven choices and material opportunity costs.
{"title":"Guilt aversion and inequality in dictator games","authors":"Pierpaolo Battigalli , Giovanni Di Bartolomeo , Stefano Papa","doi":"10.1016/j.econlet.2024.112129","DOIUrl":"10.1016/j.econlet.2024.112129","url":null,"abstract":"<div><div>We examine the interplay between guilt aversion and inequality in decision-making, specifically in the context of a dictator game. Considering different initial allocations of the surplus, we investigate how the material opportunity cost of reducing inequality influences sharing behavior, revealing a complex relationship among guilt-driven choices and material opportunity costs.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112129"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143131233","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112187
Christer Thrane
Using Norwegian data, we examine nationalistic bias in experts’ player ratings in football (soccer). Controlling for a large set of performance-related factors and possibly confounding player characteristics, we find a statistically significant nationality effect. We interpret this as nationalistic bias.
{"title":"Nationalistic bias in experts’ player ratings in football","authors":"Christer Thrane","doi":"10.1016/j.econlet.2025.112187","DOIUrl":"10.1016/j.econlet.2025.112187","url":null,"abstract":"<div><div>Using Norwegian data, we examine nationalistic bias in experts’ player ratings in football (soccer). Controlling for a large set of performance-related factors and possibly confounding player characteristics, we find a statistically significant nationality effect. We interpret this as nationalistic bias.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112187"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166048","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112173
Alessandro Bellocchi, Giuseppe Travaglini
Financial literacy is a specific “asset” and its achievement may imply irreversible costs. These elements affect the household’s decision to invest in financial education. To explore the issue we use a stochastic dynamic model of portfolio choice in which the cost of financial education is sunk. We show that education costs, uncertainty and irreversibility affect household’s choice to either exercise the option or defer to the future the decision to invest in financial education. This result may provide an explanation to the so-called ‘financial literacy paradox’.
{"title":"Financial literacy and financial education: The role of irreversible costs","authors":"Alessandro Bellocchi, Giuseppe Travaglini","doi":"10.1016/j.econlet.2025.112173","DOIUrl":"10.1016/j.econlet.2025.112173","url":null,"abstract":"<div><div>Financial literacy is a specific “asset” and its achievement may imply irreversible costs. These elements affect the household’s decision to invest in financial education. To explore the issue we use a stochastic dynamic model of portfolio choice in which the cost of financial education is sunk. We show that education costs, uncertainty and irreversibility affect household’s choice to either exercise the option or defer to the future the decision to invest in financial education. This result may provide an explanation to the so-called ‘financial literacy paradox’.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112173"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166069","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112142
Xiaodu Xie
Recent studies have challenged the usefulness of variance–covariance matrix forecasting for the purpose of minimum-variance portfolio construction, instead advocating for the direct forecasting of realized weights. This study examines the value of this direct approach when dimension reduction is handled in the portfolio construction problem via popular volatility timing strategies. Using empirical data from the 45 largest U.S. stocks, this paper reveals that the traditional indirect approach, which relies on volatility forecasts, consistently delivers higher out-of-sample portfolio Sharpe ratios. This finding is robust to random portfolio selection, forecasting horizons, and transaction costs. The results demonstrate the continued usefulness of volatility forecasting models in portfolio construction.
{"title":"Indirect and direct forecasting of volatility-timing portfolios","authors":"Xiaodu Xie","doi":"10.1016/j.econlet.2024.112142","DOIUrl":"10.1016/j.econlet.2024.112142","url":null,"abstract":"<div><div>Recent studies have challenged the usefulness of variance–covariance matrix forecasting for the purpose of minimum-variance portfolio construction, instead advocating for the direct forecasting of realized weights. This study examines the value of this direct approach when dimension reduction is handled in the portfolio construction problem via popular volatility timing strategies. Using empirical data from the 45 largest U.S. stocks, this paper reveals that the traditional indirect approach, which relies on volatility forecasts, consistently delivers higher out-of-sample portfolio Sharpe ratios. This finding is robust to random portfolio selection, forecasting horizons, and transaction costs. The results demonstrate the continued usefulness of volatility forecasting models in portfolio construction.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112142"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112147
Yongda Liu, Zhuang Zhang
This study examines the impact of firms' investment in artificial intelligence (AI) human capital on their data processing efficiency. Using the proportion of AI-related employees as a measure of AI human capital investment for US firms from 2005 to 2020, the findings reveal that higher levels of AI human capital significantly reduce the time that firms require to announce their earnings. However, AI tends to be more effective in assisting firms with the processing of routine rather than complex information. Additionally, beyond enhancing the speed of data processing, AI also contributes to greater accuracy in firms' data compilation and disclosure.
{"title":"Unlocking operational efficiency: How AI human capital investment enhances data processing efficiency?","authors":"Yongda Liu, Zhuang Zhang","doi":"10.1016/j.econlet.2024.112147","DOIUrl":"10.1016/j.econlet.2024.112147","url":null,"abstract":"<div><div>This study examines the impact of firms' investment in artificial intelligence (AI) human capital on their data processing efficiency. Using the proportion of AI-related employees as a measure of AI human capital investment for US firms from 2005 to 2020, the findings reveal that higher levels of AI human capital significantly reduce the time that firms require to announce their earnings. However, AI tends to be more effective in assisting firms with the processing of routine rather than complex information. Additionally, beyond enhancing the speed of data processing, AI also contributes to greater accuracy in firms' data compilation and disclosure.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112147"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166170","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112155
Christopher S. Carpenter , Linda Kirkpatrick , Maxine J. Lee , Alexander Plum
We provide new evidence on the economic outcomes of transgender and gender diverse people in New Zealand (NZ) using confidential linked administrative data from driver license records – which identify gender diverse people since 2021 – linked to NZ birth and tax records. We document that gender diverse people are younger than both transgender and cisgender people but are more highly educated than transgender people. Relative to otherwise similar cisgender men, we find large employment and earnings penalties for transgender and gender diverse people. Earnings gaps for gender diverse individuals are especially large.
{"title":"Economic outcomes of gender diverse people: New evidence from linked administrative data in New Zealand","authors":"Christopher S. Carpenter , Linda Kirkpatrick , Maxine J. Lee , Alexander Plum","doi":"10.1016/j.econlet.2024.112155","DOIUrl":"10.1016/j.econlet.2024.112155","url":null,"abstract":"<div><div>We provide new evidence on the economic outcomes of transgender and gender diverse people in New Zealand (NZ) using confidential linked administrative data from driver license records – which identify gender diverse people since 2021 – linked to NZ birth and tax records. We document that gender diverse people are younger than both transgender and cisgender people but are more highly educated than transgender people. Relative to otherwise similar cisgender men, we find large employment and earnings penalties for transgender and gender diverse people. Earnings gaps for gender diverse individuals are especially large.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112155"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166173","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2025.112164
Maximilian Koppenberg , Stefan Wimmer , Stefan Hirsch
The EU has recently experienced high inflation rates, particularly in food prices. This observation led to claims in the news and by retailers that large food and beverage manufacturers take advantage of high inflation, and increase prices more than necessary (“greedflation”) to compensate for increases in their raw material prices. To test whether this claim is true, we estimate a production function to determine markups of output price over marginal costs for a sample of 88,717 European food and beverage manufactures covering the years 2013–2022. Our results do not support the greedflation hypothesis as markups have decreased over the considered period. In addition, there is a negative correlation between raw material prices and markups which is stronger for large firms, suggesting that these firms cannot be generally accused of taking advantage of high inflation. Our results imply that claimed “greedflation” does not justify additional pro-competitive policies in the food and beverage manufacturing sector.
{"title":"Has corporate greed driven inflation in the European Union? An analysis of the food and beverage industry","authors":"Maximilian Koppenberg , Stefan Wimmer , Stefan Hirsch","doi":"10.1016/j.econlet.2025.112164","DOIUrl":"10.1016/j.econlet.2025.112164","url":null,"abstract":"<div><div>The EU has recently experienced high inflation rates, particularly in food prices. This observation led to claims in the news and by retailers that large food and beverage manufacturers take advantage of high inflation, and increase prices more than necessary (“greedflation”) to compensate for increases in their raw material prices. To test whether this claim is true, we estimate a production function to determine markups of output price over marginal costs for a sample of 88,717 European food and beverage manufactures covering the years 2013–2022. Our results do not support the greedflation hypothesis as markups have decreased over the considered period. In addition, there is a negative correlation between raw material prices and markups which is stronger for large firms, suggesting that these firms cannot be generally accused of taking advantage of high inflation. Our results imply that claimed “greedflation” does not justify additional pro-competitive policies in the food and beverage manufacturing sector.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112164"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166178","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112162
Karl Wärneryd
We consider groups that compete to set policy, and show that there may be an incentive to change group composition with respect to policy preferences in such a fashion that equilibrium policies ultimately converge across groups.
{"title":"Group conflict, group composition, and policy convergence","authors":"Karl Wärneryd","doi":"10.1016/j.econlet.2024.112162","DOIUrl":"10.1016/j.econlet.2024.112162","url":null,"abstract":"<div><div>We consider groups that compete to set policy, and show that there may be an incentive to change group composition with respect to policy preferences in such a fashion that equilibrium policies ultimately converge across groups.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112162"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166179","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112159
Jacob Coreno , Di Feng
In the object reallocation problem introduced by Shapley and Scarf (1974), Fujinaka and Wakayama (2018) showed that Top Trading Cycles (TTC) is the unique rule satisfying individual rationality, strategy-proofness, and endowments-swapping-proofness. We show that the uniqueness remains true if strategy-proofness is weakened to truncation-proofness.
{"title":"Characterizing TTC via endowments-swapping-proofness and truncation-proofness","authors":"Jacob Coreno , Di Feng","doi":"10.1016/j.econlet.2024.112159","DOIUrl":"10.1016/j.econlet.2024.112159","url":null,"abstract":"<div><div>In the object reallocation problem introduced by Shapley and Scarf (1974), Fujinaka and Wakayama (2018) showed that Top Trading Cycles (TTC) is the unique rule satisfying <em>individual rationality</em>, <em>strategy-proofness</em>, and <em>endowments-swapping-proofness</em>. We show that the uniqueness remains true if <em>strategy-proofness</em> is weakened to <em>truncation-proofness</em>.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112159"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166181","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-01DOI: 10.1016/j.econlet.2024.112092
Fernando Barros Jr. , Bruno R. Delalibera , Valdemar Pinho Neto , Victor Rangel
This paper investigates the impact of natural disasters on the adoption of PIX payments in Brazilian municipalities. Using data from multiple sources, including the Ministry of Integration and Regional Development of Brazil, the Central Bank of Brazil, and the Monthly Banking Statistics by Municipality database, we employ the Differences-in-Differences method to measure the effect of disasters on PIX adoption. Our findings reveal a significant and positive impact of natural disasters on the utilization of PIX among households. Additionally, we observe that the intensity of the disasters influences PIX adoption, with more severe disasters exerting a greater impact.
{"title":"Natural disasters and financial technology adoption","authors":"Fernando Barros Jr. , Bruno R. Delalibera , Valdemar Pinho Neto , Victor Rangel","doi":"10.1016/j.econlet.2024.112092","DOIUrl":"10.1016/j.econlet.2024.112092","url":null,"abstract":"<div><div>This paper investigates the impact of natural disasters on the adoption of PIX payments in Brazilian municipalities. Using data from multiple sources, including the Ministry of Integration and Regional Development of Brazil, the Central Bank of Brazil, and the Monthly Banking Statistics by Municipality database, we employ the Differences-in-Differences method to measure the effect of disasters on PIX adoption. Our findings reveal a significant and positive impact of natural disasters on the utilization of PIX among households. Additionally, we observe that the intensity of the disasters influences PIX adoption, with more severe disasters exerting a greater impact.</div></div>","PeriodicalId":11468,"journal":{"name":"Economics Letters","volume":"247 ","pages":"Article 112092"},"PeriodicalIF":2.1,"publicationDate":"2025-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143166726","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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