Pub Date : 2019-01-01DOI: 10.15609/annaeconstat2009.133.0109
L. Thomas
This paper studies the optimal procurement contract in the presence of potential cost overruns. The firm s delivery cost depends on its efficiency-type, which is private information. The delivery cost can take two values: planned or overrun. The lack of cost overruns is considered to be a noisy signal of the firm s effort to properly manage the project. The firm is protected by limited liability. Faced with adverse selection, then moral hazard, we show that the buyer offers a fully pooling incentive scheme to the firm. Moreover, the incentive compensation scheme can be implemented by a pair of fixed-price contracts..
{"title":"Optimal Procurement Contract with Cost Overruns","authors":"L. Thomas","doi":"10.15609/annaeconstat2009.133.0109","DOIUrl":"https://doi.org/10.15609/annaeconstat2009.133.0109","url":null,"abstract":"This paper studies the optimal procurement contract in the presence of potential cost overruns. The firm s delivery cost depends on its efficiency-type, which is private information. The delivery cost can take two values: planned or overrun. The lack of cost overruns is considered to be a noisy signal of the firm s effort to properly manage the project. The firm is protected by limited liability. Faced with adverse selection, then moral hazard, we show that the buyer offers a fully pooling incentive scheme to the firm. Moreover, the incentive compensation scheme can be implemented by a pair of fixed-price contracts..","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67067670","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How does the retirement age affect the physical and mental health of seniors? We identify this effect based on the 1993 reform of the French pension system, which was heterogeneously introduced among the population. With each cohort, the French government gradually increased the incentive to work using two tools: the contribution period required for entitlement to a full pension and the number of reference earning years taken to calculate pensions. We use a unique database on health and employment in France in 1999 and 2005, when the cohorts affected by the reform started to retire. A difference-in-differences approach, with the control group comprising public sector employees (not concerned by the 1993 reform), finds that the people more affected by the reform, and hence with a stronger incentive to work, were those posting less of an improvement and even a deterioration in their health between 1999 and 2005. Subsequently, taking the reform as a tool to filter out the potential influence of health on employment choices, we show that retirement improves physical and social health. The more physically impacted are the low-educated individuals.
Pub Date : 2019-01-01DOI: 10.15609/annaeconstat2009.134.0177
M. Harding, Carlos Lamarche
This paper investigates the estimation of a panel quantile model for count data with individual heterogeneity. The method is needed as a result of the increased availability of digital data, which allows us to track event counts at the individual level for a large number of activities from webclicks and retweets to store visits and purchases. We propose a penalized quantile regression estimator and we show that the slope parameter estimator is consistent and asymptotically Gaussian under similar conditions to the ones used in the literature. The penalty serves to shrink individual effects toward zero, improving the performance of fixed effects quantile regression estimators when the time series dimension is small relative to the number of subjects in the panel. We investigate solutions to the computational challenges resulting from the need to estimate tens of thousands of parameters in high-dimensional settings and several simulation studies are carried out to study the small sample performance of the proposed approach. We present a novel empirical application to individual trip counts to the store based on a large panel of food purchase transactions.
{"title":"Penalized Estimation of a Quantile Count Model for Panel Data","authors":"M. Harding, Carlos Lamarche","doi":"10.15609/annaeconstat2009.134.0177","DOIUrl":"https://doi.org/10.15609/annaeconstat2009.134.0177","url":null,"abstract":"This paper investigates the estimation of a panel quantile model for count data with individual heterogeneity. The method is needed as a result of the increased availability of digital data, which allows us to track event counts at the individual level for a large number of activities from webclicks and retweets to store visits and purchases. We propose a penalized quantile regression estimator and we show that the slope parameter estimator is consistent and asymptotically Gaussian under similar conditions to the ones used in the literature. The penalty serves to shrink individual effects toward zero, improving the performance of fixed effects quantile regression estimators when the time series dimension is small relative to the number of subjects in the panel. We investigate solutions to the computational challenges resulting from the need to estimate tens of thousands of parameters in high-dimensional settings and several simulation studies are carried out to study the small sample performance of the proposed approach. We present a novel empirical application to individual trip counts to the store based on a large panel of food purchase transactions.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67068434","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.15609/ANNAECONSTAT2009.135.0187
F. Kramarz, Laurent Linnemer
C est avec une profonde tristesse que nous avons appris le deces de Georges Bourdalle en Avril 2019, a l‘âge de 59 ans. Georges avait ete Assistant de Redaction de la revue Annales d‘Economie et de Statistique de 1992 (volume 27) a 1999 (volume 53). It is with a deep sadness that we learnt the death of Georges Bourdalle in April 2019, at the age of 59. Georges had been Assistant de Redaction of the journal Annales d Economie et de Statistique from 1992 (volume 27) to 1999 (volume 53).
{"title":"Obituary: Georges Bourdallé (1960–2019)","authors":"F. Kramarz, Laurent Linnemer","doi":"10.15609/ANNAECONSTAT2009.135.0187","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.135.0187","url":null,"abstract":"C est avec une profonde tristesse que nous avons appris le deces de Georges Bourdalle en Avril 2019, a l‘âge de 59 ans. Georges avait ete Assistant de Redaction de la revue Annales d‘Economie et de Statistique de 1992 (volume 27) a 1999 (volume 53). It is with a deep sadness that we learnt the death of Georges Bourdalle in April 2019, at the age of 59. Georges had been Assistant de Redaction of the journal Annales d Economie et de Statistique from 1992 (volume 27) to 1999 (volume 53).","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67068216","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.15609/ANNAECONSTAT2009.134.0243
Riju Joshi, J. Wooldridge
This paper shows how the correlated random effects approach can be extended to linear panel data models when instrumental variables are needed and the panel is unbalanced. We obtain the algebraic equivalence between the fixed effects two stage least squares (FE2SLS) estimator and a pooled 2SLS (P2SLS) estimator on a transformed equation. This equivalence allows us to obtain fully robust Hausman tests comparing random effects 2SLS (RE2SLS) and FE2SLS. In addition, we obtain an equivalence result for control function estimates and FE2SLS estimates in an unbalanced panel. We use this result to obtain a robust variable addition Hausman test that effectively compares the FE and FE2SLS estimates. We illustrate the tests using an unbalanced panel on student performance and spending at the school level.
{"title":"Correlated Random Effects Models with Endogenous Explanatory Variables and Unbalanced Panels","authors":"Riju Joshi, J. Wooldridge","doi":"10.15609/ANNAECONSTAT2009.134.0243","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.134.0243","url":null,"abstract":"This paper shows how the correlated random effects approach can be extended to linear panel data models when instrumental variables are needed and the panel is unbalanced. We obtain the algebraic equivalence between the fixed effects two stage least squares (FE2SLS) estimator and a pooled 2SLS (P2SLS) estimator on a transformed equation. This equivalence allows us to obtain fully robust Hausman tests comparing random effects 2SLS (RE2SLS) and FE2SLS. In addition, we obtain an equivalence result for control function estimates and FE2SLS estimates in an unbalanced panel. We use this result to obtain a robust variable addition Hausman test that effectively compares the FE and FE2SLS estimates. We illustrate the tests using an unbalanced panel on student performance and spending at the school level.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67068511","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.15609/ANNAECONSTAT2009.135.0001
L. Linnemer
This profile of Roger Guesnerie is based on several interviews with him between September 2018 and June 2019. The interviews took place at Roger s office, at the College de France in the fifth arrondissement of Paris, just near the Pantheon. The objective of the profile is twofold. First, we trace the career of this highly influential theoretical economist who made seminal contributions to the fields of general equilibrium, taxation, contract theory, sunspot, and rational expectations. Second, we show how Guesnerie and his colleagues contributed to changing the French landscape of economic research.
{"title":"Roger Guesnerie: An Hors Catégorie Career","authors":"L. Linnemer","doi":"10.15609/ANNAECONSTAT2009.135.0001","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.135.0001","url":null,"abstract":"This profile of Roger Guesnerie is based on several interviews with him between September 2018 and June 2019. The interviews took place at Roger s office, at the College de France in the fifth arrondissement of Paris, just near the Pantheon. The objective of the profile is twofold. First, we trace the career of this highly influential theoretical economist who made seminal contributions to the fields of general equilibrium, taxation, contract theory, sunspot, and rational expectations. Second, we show how Guesnerie and his colleagues contributed to changing the French landscape of economic research.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67068549","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.15609/ANNAECONSTAT2009.133.0087
D. Ettinger, Fabio Michelucci
We introduce a novel motive for the use of a reserve price as an instrument to raise auction revenues in ascending auctions. The effect that we stress is of inducing coarser information aggregation. The reserve price may prevent information revelation because bidders cannot precisely observe at which price other bidders leave the auction. In simple settings where valuation functions are not symmetric, this may increase the expected revenue of the auction. To illustrate this motive, we exhibit an example in which the use of a reserve price increases revenue even though there are always at least two bidders active for prices higher than the reserve price.
{"title":"Manipulating Information Revelation with Reserve Prices","authors":"D. Ettinger, Fabio Michelucci","doi":"10.15609/ANNAECONSTAT2009.133.0087","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.133.0087","url":null,"abstract":"We introduce a novel motive for the use of a reserve price as an instrument to raise auction revenues in ascending auctions. The effect that we stress is of inducing coarser information aggregation. The reserve price may prevent information revelation because bidders cannot precisely observe at which price other bidders leave the auction. In simple settings where valuation functions are not symmetric, this may increase the expected revenue of the auction. To illustrate this motive, we exhibit an example in which the use of a reserve price increases revenue even though there are always at least two bidders active for prices higher than the reserve price.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67067822","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.15609/ANNAECONSTAT2009.134.0043
B. Baltagi, G. Bresson, Jean-Michel Étienne
This paper proposes semiparametric estimation of the relationship between CO2 emissions and economic activities for a panel of 81 countries observed over the period 1991-2015. The observed differentiated behaviors by country reveal strong heterogeneity as well as different trends across countries and years. This is the motivation behind using a mixed fixed- and random-coefficients panel data model to estimate this relationship. Following Lee and Wand (2016a), we apply a mean field variational Bayes approximation to estimate a log model with structural breaks between CO2 emissions per capita and GDP per capita including control covariates such as energy intensity and use, energy consumption, population density, urbanization and trade. Results reveal a strong "CO2 emissions - GDP elasticity", close to one, confirming the increasing but complex link between these two variables. The use of this methodology enriches the estimates of climate change models underlining a large diversity of responses across variables and countries.
{"title":"Carbon Dioxide Emissions and Economic Activities: A Mean Field\u0000 Variational Bayes Semiparametric Panel Data Model with Random\u0000 Coefficients","authors":"B. Baltagi, G. Bresson, Jean-Michel Étienne","doi":"10.15609/ANNAECONSTAT2009.134.0043","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.134.0043","url":null,"abstract":"This paper proposes semiparametric estimation of the relationship between CO2 emissions and economic activities for a panel of 81 countries observed over the period 1991-2015. The observed differentiated behaviors by country reveal strong heterogeneity as well as different trends across countries and years. This is the motivation behind using a mixed fixed- and random-coefficients panel data model to estimate this relationship. Following Lee and Wand (2016a), we apply a mean field variational Bayes approximation to estimate a log model with structural breaks between CO2 emissions per capita and GDP per capita including control covariates such as energy intensity and use, energy consumption, population density, urbanization and trade. Results reveal a strong \"CO2 emissions - GDP elasticity\", close to one, confirming the increasing but complex link between these two variables. The use of this methodology enriches the estimates of climate change models underlining a large diversity of responses across variables and countries.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67068366","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.15609/ANNAECONSTAT2009.134.0149
Tue Gørgens, Chirok Han, Sen Xue
This paper investigates the relationship between moment restrictions and identification in simple linear AR(1) dynamic panel data models with fixed effects under standard minimal assumptions. The number of time periods is assumed to be small. The assumptions imply linear and quadratic moment restrictions which can be used for GMM estimation. The paper makes three points. First, contrary to common belief, the linear moment restrictions may fail to identify the autoregressive parameter even when it is known to be less than 1. Second, the quadratic moment restrictions provide full or partial identification in many of the cases where the linear moment restrictions do not. Third, the first moment restrictions can also be important for identification. Practical implications of the findings are illustrated using Monte Carlo simulations.
{"title":"Moment Restrictions and Identification in Linear Dynamic Panel Data Models","authors":"Tue Gørgens, Chirok Han, Sen Xue","doi":"10.15609/ANNAECONSTAT2009.134.0149","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.134.0149","url":null,"abstract":"This paper investigates the relationship between moment restrictions and identification in simple linear AR(1) dynamic panel data models with fixed effects under standard minimal assumptions. The number of time periods is assumed to be small. The assumptions imply linear and quadratic moment restrictions which can be used for GMM estimation. The paper makes three points. First, contrary to common belief, the linear moment restrictions may fail to identify the autoregressive parameter even when it is known to be less than 1. Second, the quadratic moment restrictions provide full or partial identification in many of the cases where the linear moment restrictions do not. Third, the first moment restrictions can also be important for identification. Practical implications of the findings are illustrated using Monte Carlo simulations.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67068369","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-12-01DOI: 10.15609/ANNAECONSTAT2009.132.0005
J. Amigues, M. Moreaux
We study an economy producing energy services from a polluting fossil fuel and a carbon free renewable resource under a constraint on the admissible atmospheric carbon concentration, equivalently under a constraint on the admissible temperature. The transformation rates of natural primary resources energy into useful energy are costly endogenous variables. Choosing higher efficiency rates requires to bring into operation more sophisticated energy transformation devices, that is more costly ones. We show that, independently of technical progress, along a perfect foresight equilibrium path which is Pareto optimal, the transformation rate of any exploited resource should increase throughout time, excepted within the period during which the carbon constraint is binding, a phenomenon we call the ’ceiling paradox’.
{"title":"Converting Primary Resources into Useful Energy: The Pollution Ceiling Efficiency Paradox","authors":"J. Amigues, M. Moreaux","doi":"10.15609/ANNAECONSTAT2009.132.0005","DOIUrl":"https://doi.org/10.15609/ANNAECONSTAT2009.132.0005","url":null,"abstract":"We study an economy producing energy services from a polluting fossil fuel and a carbon free renewable resource under a constraint on the admissible atmospheric carbon concentration, equivalently under a constraint on the admissible temperature. The transformation rates of natural primary resources energy into useful energy are costly endogenous variables. Choosing higher efficiency rates requires to bring into operation more sophisticated energy transformation devices, that is more costly ones. We show that, independently of technical progress, along a perfect foresight equilibrium path which is Pareto optimal, the transformation rate of any exploited resource should increase throughout time, excepted within the period during which the carbon constraint is binding, a phenomenon we call the ’ceiling paradox’.","PeriodicalId":37191,"journal":{"name":"Annals of Economics and Statistics","volume":"1 1","pages":"5-32"},"PeriodicalIF":0.0,"publicationDate":"2018-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49224106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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