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preprint2020arXiv

Competitive ride-sourcing market with a third-party integrator

Recently, some transportation service providers attempt to integrate the ride services offered by multiple independent ride-sourcing platforms, and passengers are able to request ride through such third-party integrators or connectors and receive service from any one of the platforms. This novel business model, termed as third-party platform-integration in this paper, has potentials to alleviate the cost of market fragmentation due to the demand splitting among multiple platforms. While most existing studies focus on the operation strategies for one single monopolist platform, much less is known about the competition and platform-integration as well as the implications on operation strategy and system efficiency. In this paper, we propose mathematical models to describe the ride-sourcing market with multiple competing platforms and compare system performance metrics between two market scenarios, i.e., with and without platform-integration, at Nash equilibrium as well as social optimum. We find that platform-integration can increase total realized demand and social welfare at both Nash equilibrium and social optimum, but may not necessarily generate a greater profit when vehicle sup

preprint2020arXiv

Focused Bayesian Prediction

We propose a new method for conducting Bayesian prediction that delivers accurate predictions without correctly specifying the unknown true data generating process. A prior is defined over a class of plausible predictive models. After observing data, we update the prior to a posterior over these models, via a criterion that captures a user-specified measure of predictive accuracy. Under regularity, this update yields posterior concentration onto the element of the predictive class that maximizes the expectation of the accuracy measure. In a series of simulation experiments and empirical examples we find notable gains in predictive accuracy relative to conventional likelihood-based prediction.

preprint2020arXiv

Bookmakers' mispricing of the disappeared home advantage in the German Bundesliga after the COVID-19 break

The outbreak of COVID-19 in March 2020 led to a shutdown of economic activities in Europe. This included the sports sector, since public gatherings were prohibited. The German Bundesliga was among the first sport leagues realising a restart without spectators. Several recent studies suggest that the home advantage of teams was eroded for the remaining matches. Our paper analyses the reaction by bookmakers to the disappearance of such home advantage. We show that bookmakers had problems to adjust the betting odds in accordance to the disappeared home advantage, opening opportunities for profitable betting strategies.

preprint2020arXiv

Estimation of the number of irregular foreigners in Poland using non-linear count regression models

Population size estimation requires access to unit-level data in order to correctly apply capture-recapture methods. Unfortunately, for reasons of confidentiality access to such data may be limited. To overcome this issue we apply and extend the hierarchical Poisson-Gamma model proposed by Zhang (2008), which initially was used to estimate the number of irregular foreigners in Norway. The model is an alternative to the current capture-recapture approach as it does not require linking multiple sources and is solely based on aggregated administrative data that include (1) the number of apprehended irregular foreigners, (2) the number of foreigners who faced criminal charges and (3) the number of foreigners registered in the central population register. The model explicitly assumes a relationship between the unauthorized and registered population, which is motivated by the interconnection between these two groups. This makes the estimation conditionally dependent on the size of regular population, provides interpretation with analogy to registered population and makes the estimated parameter more stable over time. In this paper, we modify the original idea to allow for covariates and

preprint2020arXiv

Revisiting money and labor for valuing environmental goods and services in developing countries

Many Stated Preference studies conducted in developing countries provide a low willingness to pay (WTP) for a wide range of goods and services. However, recent studies in these countries indicate that this may partly be a result of the choice of payment vehicle, not the preference for the good. Thus, low WTP may not indicate a low welfare effect for public projects in developing countries. We argue that in a setting where 1) there is imperfect substitutability between money and other measures of wealth (e.g. labor), and 2) institutions are perceived to be corrupt, including payment vehicles that are currently available to the individual and less pron to corruption may be needed to obtain valid welfare estimates. Otherwise, we risk underestimating the welfare benefit of projects. We demonstrate this through a rural household contingent valuation (CV) survey designed to elicit the value of access to reliable irrigation water in Ethiopia. Of the total average annual WTP for access to reliable irrigation service, cash contribution comprises only 24.41 %. The implication is that socially desirable projects might be rejected based on cost-benefit analysis as a result of welfare gain unde

preprint2020arXiv

Changes in mobility and socioeconomic conditions in Bogotá city during the COVID-19 outbreak

We analyze mobility changes following the implementation of containment measures aimed at mitigating the spread of COVID-19 in Bogotá, Colombia. We characterize the mobility network before and during the pandemic and analyze its evolution and changes between January and July 2020. We then link the observed mobility changes to socioeconomic conditions, estimating a gravity model to assess the effect of socioeconomic conditions on mobility flows. We observe an overall reduction in mobility trends, but the overall connectivity between different areas of the city remains after the lockdown, reflecting the mobility network's resilience. We find that the responses to lockdown policies depend on socioeconomic conditions. Before the pandemic, the population with better socioeconomic conditions shows higher mobility flows. Since the lockdown, mobility presents a general decrease, but the population with worse socioeconomic conditions shows lower decreases in mobility flows. We conclude deriving policy implications.

preprint2020arXiv

Formula to Determine the Countries Equilibrium Exchange Rate With the Dollar and Proposal for a Second Bretton Woods Conference

This paper presents the way in which can be determined the exchange rates that simultaneously balance the trade balances of all countries that trade with each other within a common market. A mathematical synthesis between the theory of comparative advantages of Ricardo and Mill and the New Theory on International Trade of Paul Krugman is also presented in this paper. This mathematical synthesis shows that these theories are complementary. Also presented in this paper is a proposal to organize a common market of the American hemisphere. This economic alliance would allow to establish a political alliance for the common defense of the entire American hemisphere. The formula we developed in this paper to determine the exchange rates of the countries solves the problem that Mexico, Canada, Europe, Japan and China currently experience with the United States in relation to the deficits and surpluses in the trade balance of the countries and their consequent impediment so that stable growth of international trade can be achieved.

preprint2020arXiv

Implications of the Tradeoff between Inside and Outside Social Status in Group Choice

We investigate a group choice problem of agents pursuing social status. We assume heterogeneous agents want to signal their private information (ability, income, patience, altruism, etc.) to others, facing tradeoff between "outside status" (desire to be perceived in prestigious group from outside observers) and "inside status" (desire to be perceived talented from peers inside their group). To analyze the tradeoff, we develop two stage signaling model in which each agent firstly chooses her group and secondly chooses her action in the group she chose. They face binary choice problems both in group and action choices. Using cutoff strategy, we construct an partially separating equilibrium such that there are four populations: (i) choosing high group with strong incentive for action in the group, (ii) high group with weak incentive, (iii) low group with strong incentive, and (iv) low group with weak incentive. By comparative statics results, we find some spillover effects from a certain group to another, on how four populations change, when a policy is taken in each group. These results have rich implications for group choice problems like school, firm or residential

preprint2020arXiv

The Impact of Sodomy Law Repeals on Crime

We exploit variation in the timing of decriminalization of same-sex sexual intercourse across U.S. states to estimate the impact of these law changes on crime through difference-in-difference and event-study models. We provide the first evidence that sodomy law repeals led to a decline in the number of arrests for disorderly conduct, prostitution, and other sex offenses. Furthermore, we show that these repeals led to a reduction in arrests for drug and alcohol consumption.

preprint2020arXiv

How Much Ad Viewability is Enough? The Effect of Display Ad Viewability on Advertising Effectiveness

A large share of all online display advertisements (ads) are never seen by a human. For instance, an ad could appear below the page fold, where a user never scrolls. Yet, an ad is essentially ineffective if it is not at least somewhat viewable. Ad viewability - which refers to the pixel percentage-in-view and the exposure duration of an online display ad - has recently garnered great interest among digital advertisers and publishers. However, we know very little about the impact of ad viewability on advertising effectiveness. We work to close this gap by analyzing a large-scale observational data set with more than 350,000 ad impressions similar to the data sets that are typically available to digital advertisers and publishers. This analysis reveals that longer exposure durations (>10 seconds) and 100% visible pixels do not appear to be optimal in generating view-throughs. The highest view-through rates seem to be generated with relatively lower pixel/second-combinations of 50%/1, 50%/5, 75%/1, and 75%/5. However, this analysis does not account for user behavior that may be correlated with or even drive ad viewability and may therefore result in endogeneity issues. Consequently, w

preprint2020arXiv

Complexity science approach to economic crime

In this comment we discuss how complexity science and network science are particularly useful for identifying and describing the hidden traces of economic misbehaviour such as fraud and corruption.

preprint2020arXiv

Potential impacts of ballast water regulations on international trade, shipping patterns, and the global economy: An integrated transportation and economic modeling assessment

Global ballast water management regulations aiming to decrease aquatic species invasion require actions that can increase shipping costs. We employ an integrated shipping cost and global economic modeling approach to investigate the impacts of ballast water regulations on bilateral trade, national economies, and shipping patterns. Given the potential need for more stringent regulation at regional hotspots of species invasions, this work considers two ballast water treatment policy scenarios: implementation of current international regulations, and a possible stricter regional regulation that targets ships traveling to and from the United States while other vessels continue to face current standards. We find that ballast water management compliance costs under both scenarios lead to modest negative impacts on international trade and national economies overall. However, stricter regulations applied to U.S. ports are expected to have large negative impacts on bilateral trade of several specific commodities for a few countries. Trade diversion causes decreased U.S. imports of some products, leading to minor economic welfare losses.

preprint2020arXiv

A Spatial Analysis of Disposable Income in Ireland: A GWR Approach

This paper examines the spatial distribution of income in Ireland. Median gross household disposable income data from the CSO, available at the Electoral Division (ED) level, is used to explore the spatial variability in income. Geary's C highlights the spatial dependence of income, highlighting that the distribution of income is not random across space and is influenced by location. Given the presence of spatial autocorrelation, utilising a global OLS regression will lead to biased results. Geographically Weighted Regression (GWR) is used to examine the spatial heterogeneity of income and the impact of local demographic drivers on income. GWR results show the demographic drivers have varying levels of influence on income across locations. Lone parent has a stronger negative impact in the Cork commuter belt than it does in the Dublin commuter belt. The relationship between household income and the demographic context of the area is a complicated one. This paper attempts to examine these relationships acknowledging the impact of space.

preprint2020arXiv

Creation of knowledge through exchanges of knowledge: Evidence from Japanese patent data

This study shows evidence for collaborative knowledge creation among individual researchers through direct exchanges of their mutual differentiated knowledge. Using patent application data from Japan, the collaborative output is evaluated according to the quality and novelty of the developed patents, which are measured in terms of forward citations and the order of application within their primary technological category, respectively. Knowledge exchange is shown to raise collaborative productivity more through the extensive margin (i.e., the number of patents developed) in the quality dimension, whereas it does so more through the intensive margin in the novelty dimension (i.e., novelty of each patent).

preprint2020arXiv

A Principal-Agent approach to Capacity Remuneration Mechanisms

We propose to study electricity capacity remuneration mechanism design through a Principal-Agent approach. The Principal represents the aggregation of electricity consumers (or a representative entity), subject to the physical risk of shortage, and the Agent represents the electricity capacity owners, who invest in capacity and produce electricity to satisfy consumers' demand, and are subject to financial risks. Following the methodology of Cvitanic et al. (2017), we propose an optimal contract, from consumers' perspective, which complements the revenue capacity owners achieved from the spot energy market, and incentivizes both parties to perform an optimal level of investments while sharing the physical and financial risks. Numerical results provide insights on the necessity of a capacity remuneration mechanism and also show how this is especially true when the level of uncertainties on demand or production side increases.

preprint2020arXiv

Implication of Natal Care and Maternity Leave on Child Morbidity: Evidence from Ghana

Failure to receive post-natal care within first week of delivery causes a 3% increase in the possibility of Acute Respiratory Infection in children under five. Mothers with unpaid maternity leave put their children at a risk of 3.9% increase in the possibility of ARI compared to those with paid maternity leave.

preprint2020arXiv

Reviewing climate change and agricultural market competitiveness

The paper is a collection of knowledge regarding the phenomenon of climate change, competitiveness, and literature linking the two phenomena to agricultural market competitiveness. The objective is to investigate the peer reviewed and grey literature on the subject to explore the link between climate change and agricultural market competitiveness and also explore an appropriate technique to validate the presumed relationship empirically. The paper concludes by identifying implications for developing an agricultural competitiveness index while incorporating the climate change impacts, to enhance the potential of agricultural markets for optimizing the agricultural sectors competitiveness.

preprint2020arXiv

Economic complexity of prefectures in Japan

Every nation prioritizes the inclusive economic growth and development of all regions. However, we observe that economic activities are clustered in space, which results in a disparity in per-capita income among different regions. A complexity-based method was proposed by Hidalgo and Hausmann [PNAS 106, 10570-10575 (2009)] to explain the large gaps in per-capita income across countries. Although there have been extensive studies on countries' economic complexity using international export data, studies on economic complexity at the regional level are relatively less studied. Here, we study the industrial sector complexity of prefectures in Japan based on the basic information of more than one million firms. We aggregate the data as a bipartite network of prefectures and industrial sectors. We decompose the bipartite network as a prefecture-prefecture network and sector-sector network, which reveals the relationships among them. Similarities among the prefectures and among the sectors are measured using a metric. From these similarity matrices, we cluster the prefectures and sectors using the minimal spanning tree technique.The computed economic complexity index from the structu

preprint2020arXiv

Using Household Grants to Benchmark the Cost Effectiveness of a USAID Workforce Readiness Program

We use a randomized experiment to compare a workforce training program to cash transfers in Rwanda. Conducted in a sample of poor and underemployed youth, this study measures the impact of the training program not only relative to a control group but relative to the counterfactual of simply disbursing the cost of the program directly to beneficiaries. While the training program was successful in improving a number of core outcomes (productive hours, assets, savings, and subjective well-being), cost-equivalent cash transfers move all these outcomes as well as consumption, income, and wealth. In the head-to-head costing comparison cash proves superior across a number of economic outcomes, while training outperforms cash only in the production of business knowledge. We find little evidence of complementarity between human and physical capital interventions, and no signs of heterogeneity or spillover effects.

preprint2020arXiv

Eliciting Information from Sensitive Survey Questions

This paper considers how to elicit information from sensitive survey questions. First we thoroughly evaluate list experiments (LE), a leading method in the experimental literature on sensitive questions. Our empirical results demonstrate that the assumptions required to identify sensitive information in LE are violated for the majority of surveys. Next we propose a novel survey method, called Multiple Response Technique (MRT), for eliciting information from sensitive questions. We require all of the respondents to answer three questions related to the sensitive information. This technique recovers sensitive information at a disaggregated level while still allowing arbitrary misreporting in survey responses. An application of the MRT provides novel empirical evidence on sexual orientation and Lesbian, Gay, Bisexual, and Transgender (LGBT)-related sentiment.

preprint2020arXiv

The 2020 Sturgis Motorcycle Rally and COVID-19

The Sturgis Motorcycle Rally that took place from August 7-16 was one of the largest public gatherings since the start of the COVID-19 outbreak. Over 460,000 visitors from across the United States travelled to Sturgis, South Dakota to attend the ten day event. Using anonymous cell phone tracking data we identify the home counties of visitors to the rally and examine the impact of the rally on the spread of COVID-19. Our baseline estimate suggests a one standard deviation increase in Sturgis attendance increased COVID-19 case growth by 1.1pp in the weeks after the rally.

preprint2020arXiv

Nice guys don't always finish last: succeeding in hierarchical organizations

What are the chances of an ethical individual rising through the ranks of a political party or a corporation in the presence of unethical peers? To answer this question, I consider a four-player two-stage elimination tournament, in which players are partitioned into those willing to be involved in sabotage behavior and those who are not. I show that, under certain conditions, the latter are more likely to win the tournament.

preprint2020arXiv

Effect of pop-up bike lanes on cycling in European cities

The bicycle is a low-cost means of transport linked to low risk of COVID-19 transmission. Governments have incentivized cycling by redistributing street space as part of their post-lockdown strategies. Here, we evaluate the impact of provisional bicycle infrastructure on cycling traffic in European cities. We scrape daily bicycle counts spanning over a decade from 736 bicycle counters in 106 European cities. We combine this with data on announced and completed pop-up bike lane road work projects. On average 11.5 kilometers of provisional pop-up bike lanes have been built per city. Each kilometer has increased cycling in a city by 0.6%. We calculate that the new infrastructure will generate $2.3 billion in health benefits per year, if cycling habits are sticky.

preprint2020arXiv

Counterfactual and Welfare Analysis with an Approximate Model

We propose a conceptual framework for counterfactual and welfare analysis for approximate models. Our key assumption is that model approximation error is the same magnitude at new choices as the observed data. Applying the framework to quasilinear utility, we obtain bounds on quantities at new prices using an approximate law of demand. We then bound utility differences between bundles and welfare differences between prices. All bounds are computable as linear programs. We provide detailed analytical results describing how the data map to the bounds including shape restrictions that provide a foundation for plug-in estimation. An application to gasoline demand illustrates the methodology.