scispace - formally typeset
Search or ask a question

Showing papers by "Stockholm School of Economics published in 2002"


Journal ArticleDOI
TL;DR: This paper surveys recent developments related to the smooth transition autoregressive (STAR) time series model and several of its variants, putting emphasis on new methods for testing for STAR nonlinearity, model evaluation, and forecasting.
Abstract: This paper surveys recent developments related to the smooth transition autoregressive (STAR) time series model and several of its variants. We put emphasis on new methods for testing for STAR nonlinearity, model evaluation, and forecasting. Several useful extensions of the basic STAR model, which concern multiple regimes, time-varying non-linear properties, and models for vector time series, are also reviewed.

1,120 citations


Journal ArticleDOI
TL;DR: The categorization of hip fracture probabilities can be used to adjust intervention thresholds based on age, sex, and relative risk from a reference population such as Sweden.
Abstract: It is recommended that intervention thresholds should be based on absolute fracture risk, but there is a large variation in hip fracture incidence from different regions of the world. The aim of this study was to examine heterogeneity of hip fracture probability in different regions from recent estimates of hip fracture incidence and mortality to adjust intervention thresholds. Ten-year probabilities of hip fracture were computed in men and women at 10-year intervals from the age of 50 years and lifetime risks at the age of 50 years from the hazard functions of hip fracture and death. Lifetime risk at the age of 50 years varied from 1% in women from Turkey to 28.5% in women from Sweden. High lifetime risks in women were associated with high lifetime risks in men (r = 0.83). There also were significant correlations of 10-year risk at any age between men and women. Ten-year probability was standardized to that of men and women from Sweden (set at 1.0). There was a 15-fold range in 10-year probability from 1.24 in Norway to 0.08 in Chile. Countries were categorized by 10-year probabilities comprising very high risk (Norway, Iceland, Sweden, Denmark, and the United States), high risk (China [Taiwan {TW}], Germany, Switzerland, Finland, Greece, Canada, The Netherlands, Hungary, Singapore, Italy, United Kingdom, Kuwait, Australia, and Portugal), medium risk (China [Hong Kong {HK}], France, Japan, Spain, Argentina, and China), and low risk (Turkey, Korea, Venezuela, and Chile). The categorization of hip fracture probabilities can be used to adjust intervention thresholds based on age, sex, and relative risk from a reference population such as Sweden.

590 citations


Journal ArticleDOI
TL;DR: In this article, the authors examine how firm characteristics, legal rules and financial development affect corporate finance decisions and show that institutions play an important role in determining the extent of agency problems, in particular, in countries with good creditor protection, it is easier for firms investing in intangible assets to obtain loans.
Abstract: This paper examines how firm characteristics, legal rules and financial development affect corporate finance decisions. In contrast to the existing literature, I use data on unlisted companies to show that institutions play an important role in determining the extent of agency problems. In particular, I find that in countries with good creditor protection, it is easier for firms investing in intangible assets to obtain loans. The protection of creditor rights is also important for ensuring access to long-term debt for firms operating in sectors with highly volatile returns. Ceteris paribus, firms are more leveraged in countries where the stock market is less developed. Unlisted firms appear more indebted than listed companies even after controlling for firm characteristics such as profitability, size and the ability to provide collateral. Finally, institutions that favor creditor rights and ensure stricter enforcement are associated with higher leverage, but also with greater availability of long-term debt.

575 citations


Journal ArticleDOI
TL;DR: In this paper, an empirical analysis of knowledge capital and performance heterogeneity at the firm level is presented, which applies new econometric methods to extensive data on innovation and innovative activities.

571 citations


Journal ArticleDOI
TL;DR: Current comprehensive economic data on the costs of diabetes are required for policy decisions to optimise resource allocation and to evaluate different approaches for disease management, especially in developing countries.
Abstract: Aims/hypothesis ‘The Cost of Diabetes in Europe-Type II study’ is the first coordinated attempt to measure total healthcare costs of Type II (non-insulin-dependent) diabetes mellitus in Europe. The study evaluated more than 7000 patients with Type II diabetes in eight countries — Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden and the United Kingdom.

396 citations


Journal ArticleDOI
TL;DR: A further challenge for the future will be to identify risk factors that predict fracture with high validity in different regions of the world and their independent contributions, so that models of risk prediction can be constructed and ultimately validated in independent cohorts.
Abstract: The diagnosis of osteoporosis is made from the measurement of BMD. DXA at the hip is the appropriate diagnostic site. Current clinical guidelines follow the principle that BMD measurements are indicated in individuals with risk factors for fracture and that treatment is recommended in those with a BMD below a critical value. In some countries reimbursement for the costs of treatment depend upon such thresholds for BMD. In Europe the critical value corresponds to a T-score of-2.5 SD, whereas in the USA less stringent criteria are used. It is evident, however, that fracture risk at any given T-score varies markedly according to age and other risk factors. This has led to the view that interventions should be targeted to those at high risk, irrespective of a fixed BMD threshold. In this sense, BMD is utlized as a risk assessment, since in many instances intervention thresholds will be less stringent than the diagnostic threshold. Thus, intervention thresholds need to differ from diagnostic thresholds and be based on fracture probabilities. A 10-year fracture probability appears to be an appropriate time frame. There are a number of problems to be overcome in the development of assessment guidelines. They need to take account of not only the risk of hip fracture but also that of other fractures which contribute significantly to morbidity, particularly in younger individuals. A promising approach is to weight fracture probabilities according to the disutility incurred compared with hip fracture probability. Account also needs to be taken of the large geographic variation in fracture probabilities worldwide. A further challenge for the future will be to identify risk factors that predict fracture with high validity in different regions of the world and their independent contributions, so that models of risk prediction can be constructed and ultimately validated in independent cohorts.

326 citations


Journal ArticleDOI
TL;DR: In this article, the authors identify key institutional determinants of firm emergence and growth using various types of data from Sweden and provide evidence of a low prevalence of nascent entrepreneurs and a small net employment contribution by high-growth firms.
Abstract: The purpose of this study is to identify key institutional determinants of firm emergence and growth. We do this using various types of data from Sweden. A characterization of a number of institutions and policy measures shows that they are likely to have contributed to an environment that discourages entrepreneurial activity and firm growth. Aspects dealt with include: missing arenas for entrepreneurship in the care sectors and for household-related services, taxation of entrepreneurial income, incentives for wealth accumulation, wage-setting institutions and labor market regulations. Using original data, we provide evidence of a low prevalence of nascent entrepreneurs and a small net employment contribution by high-growth firms. We admit that indisputable evidence for the effects of institutional arrangements is almost impossible to establish. However, the consistency of our theoretical arguments and empirical data makes a strong case for the notion that the Swedish case illustrates the costs of giving too little weight to economic renewal in policy making.

298 citations


Book ChapterDOI
TL;DR: A growing and deepening divide has opened up between transition countries where economic development has taken off and those caught in a vicious cycle of institutional backwardness and macroeconomic instability This divide is visible in almost every measure of economic performance: GDP growth, investment, government finances, growth in inequality, general institutional infrastructure and increasingly in measures of financial development.
Abstract: A growing and deepening divide has opened up between transition countries where economic development has taken off and those caught in a vicious cycle of institutional backwardness and macroeconomic instability This “Great Divide” is visible in almost every measure of economic performance: GDP growth, investment, government finances, growth in inequality, general institutional infrastructure and increasingly in measures of financial development Strategies for financial development have differed dramatically across countries and over time, offering interesting opportunities to study the links between real and financial sector development

266 citations


Journal ArticleDOI
TL;DR: In this paper, the authors argue that if protectionist trade policies aim to insure domestic industries against swings in world market prices, the development of financial markets could lead to trade liberalization.

233 citations


Journal ArticleDOI
TL;DR: In this paper, the effects of familiarity on customers' evaluations and behavioral intentions were examined and it was found that a high level of prepurchase familiarity was associated with more extreme postpurchase responses in customer satisfaction, repurchase intentions, and word-of-mouth intentions compared to a low prepurchase level of familiarity.
Abstract: When customer familiarity increases, customer expertise is likely to increase. Although expertise is known to affect information processing in several ways, few studies have examined the effects of familiarity on customers' evaluations and behavioral intentions. In this study, it was found that a high level of prepurchase familiarity was associated with more extreme (i.e., more polarized) postpurchase responses in customer satisfaction, repurchase intentions, and word-of-mouth intentions compared to a low prepurchase level of familiarity. More specifically, when service performance was high, high-familiarity customers expressed a higher level of satisfaction and behavioral intentions than did less familiar customers. On the other hand, when performance was low, high-familiarity customers expressed lower levels of satisfaction and behavioral intentions than did low-familiarity customers. © 2002 Wiley Periodicals, Inc.

223 citations


Journal ArticleDOI
TL;DR: In this paper, the authors analyzed the effect of economic incentives on worker absenteeism, using panel data on work absence for 1990 and 1991 with a sample of 1,396 Swedish blue-collar workers.
Abstract: We analyze the effect of economic incentives on worker absenteeism, using panel data on work absence for 1990 and 1991 with a sample of 1,396 Swedish blue-collar workers. During this period Sweden implemented major reforms of both its national income replacement program for short-term sickness and income taxes. Both affected the worker's cost of missing work. Our econometric model allows for state-dependent dynamic behavior and control for unobserved heterogeneity. The latter proves to be an important consideration. We find that the cost of being absent significantly affects work absence behavior.

Journal ArticleDOI
01 Jan 2002-Bone
TL;DR: The fracture probabilities according to age, gender, and relative risk are reported, and the effects of changes in the gradient of risk for osteoporotic fractures on the sensitivity and specificity of assessments are investigated, modeled on the population of Sweden.

Journal ArticleDOI
TL;DR: In this article, a unified framework for testing the adequacy of an estimated GARCH model is presented, where Parametric Lagrange multiplier (LM) or LM type tests of no ARCH in standardized errors, linearity, and parameter constancy are proposed.

Journal ArticleDOI
TL;DR: In this article, the smooth transition autoregression (STAR) model is used to model the transition between the extreme regimes of a time series, where the transition is assumed to be characterized by a bounded continuous function of a transition variable.
Abstract: Among the parametric nonlinear time series model families, the smooth transition regression (STR) model has recently received attention in the literature. The considerations in this dissertation focus on the univariate special case of this model, the smooth transition autoregression (STAR) model, although large parts of the discussion can be easily generalised to the more general STR case. Many nonlinear univariate time series models can be described as consisting of a number of regimes, each one corresponding to a linear autoregressive parametrisation, between which the process switches. In the STAR models, as opposed to certain other popular models involving multiple regimes, the transition between the extreme regimes is smooth and assumed to be characterised by a bounded continuous function of a transition variable. The transition variable, in turn, may be a lagged value of the variable in the model, or another stochastic or deterministic observable variable. A number of other commonly discussed nonlinear autoregressive models can be viewed as special or limiting cases of the STAR model.The applications presented in the first two chapters of this dissertation,Chapter I: Another look at Swedish Business Cycles, 1861-1988Chapter II: Modelling asymmetries and moving equilibria in unemployment rates, make use of STAR models.In these two studies, STAR models are used to provide insight into dynamic properties of the time series which cannot be be properly characterised by linear time series models, and which thereby may be obscured by estimating only a linear model in cases where linearity would be rejected if tested. The applications being of interest in their own right, an important common objective of these two chapters is also to develop, suggest, and give examples of various methods that may be of use in discussing the dynamic properties of estimated STAR models in general.Chapter III, Testing linearity against smooth transition autoregression using a parametric bootstrap, reports the result of a small simulation study considering a new test of linearity against STAR based on bootstrap methodology.

Journal ArticleDOI
TL;DR: In an experimental study of user involvement, this paper found that users are a hidden resource for creativity, and that user involvement is correlated with creativity and success in the arts and science.
Abstract: Users as a hidden resource for creativity : Findings from an experimental study of user involvement

Journal ArticleDOI
TL;DR: In this paper, the authors compared income inequality and income mobility in the Scandinavian countries and the United States during 1980-90 and found evidence of greater dispersion of first differences of relative earnings and income.
Abstract: This paper compares income inequality and income mobility in the Scandinavian countries and the United States during 1980–90. The results suggest that inequality is greater in the United States than in the Scandinavian countries and that this inequality ranking of countries remains unchanged when the accounting period of income is extended from one to eleven years. The pattern of mobility turns out to be remarkably similar, in the sense that the proportionate reduction in inequality from extending the accounting period of income is much the same. But we do find evidence of greater dispersion of first differences of relative earnings and income in the United States. Relative income changes are associated with changes in labor market and marital status in all four countries, but the magnitude of such changes are largest in the United States.

Journal ArticleDOI
TL;DR: The EQ-5D appears to be an easy-to-use instrument even for elderly patients with femoral neck fractures, and may be useful to identify patients who might benefit from reoperation, i.e. arthroplasty.
Abstract: The main purpose of this prospective study was to investigate the functional outcome and health-related quality of life according to EuroQol (EQ-5D) after a femoral neck fracture treated with internal fixation in relatively healthy elderly patients. We also aimed to validate the use of the EQ-5D in routine clinical follow-ups of this group of patients. The inclusion criteria were more than 65 years of age, absence of severe cognitive dysfunction, living independently, and unhindered walking ability preoperatively. The mean follow-up period was 17 months. The rated prefracture EQ-5Dindex scores showed good correspondence with the scores of an age-matched Swedish reference population. The EQ-5Dindex scores decreased from 0.78 before the fracture (based on recall) to 0.59 at 4 months and 0.51 at 17 months after surgery. The decrease was significantly larger among patients with fracture healing complications. There was a good correlation between the EQ-5Dindex scores and other outcome measures such as pain, mobility, independence in ADL and independent living status. The questionnaire response rate (EQ-5D) was 89–100% on different follow-up occasions. The EQ-5D appears to be an easy-to-use instrument even for elderly patients with femoral neck fractures. Changes in the quality of life may be useful to identify patients who might benefit from reoperation, i.e. arthroplasty. The EQ-5D also appears to be a relevant clinical end-point in outcome studies.

Journal ArticleDOI
TL;DR: The importance of the choice of health inequality measure is explored by comparing the income-related inequality in health status and morbidity between Sweden and Australia by estimating a concentration index and a generalized concentration index for the eight-scale health profile of the Short Form 36 (SF-36) health survey.

Book ChapterDOI
24 Apr 2002
TL;DR: In this paper, the authors analyzed the investment implications of housing choices and found that there are large potential gains from policies or institutions that would permit households to hedge their lumpy investments in housing.
Abstract: An unusually rich source of data on housing prices in Stockholm is used to analyze the investment implications of housing choices. This empirical analysis derives market-wide price and return series for housing investment during a 13-year period, and it also provides estimates of the individual-specific, idiosyncratic, variation in housing returns. Because the idiosyncratic component follows an autocorrelated process, the analysis of portfolio choice is dependent upon the holding period. We analyze the composition of household investment portfolios containing housing, common stocks, stocks in real estate holding companies, bonds, and t-bills. For short holding periods, the efficient portfolio contains essentially no housing. For longer periods, low-risk portfolios contain 15 to 50 percent housing. These results suggest that there are large potential gains from policies or institutions that would permit households to hedge their lumpy investments in housing. We estimate the potential value of hedges in reducing risk to households, yet yielding the same investment returns. The value is surprisingly large, especially to poorer homeowners.

Journal ArticleDOI
TL;DR: In this article, the authors explore a few general equilibrium models to see what kind of relationship there is between layoff costs and an economy's level of employment, and show that the employment effects depend critically on how lay-off costs are assumed to enter the bargaining process.
Abstract: General equilibrium analyses of lay-off costs have had mixed messages on the implications for employment. This paper brings out the economic forces at work and sheds light on the disparate results. We explain why lay-off costs tend to increase employment in search models while the opposite is true in models with employment lotteries. In matching models, we show that the employment effects depend critically on how lay-off costs are assumed to enter the bargaining process. A common concern is that labour market rigidities such as lay-off costs are responsible for high European unemployment (OECD, 1994a). As documented by Emerson (1988) and Lazear (1990), lay-off costs are particularly burdensome in Europe. This paper explores a few general equilibrium models to see what kind of relationship there is between lay-off costs and an economy's level of employment. The analysis focuses solely on lay-off costs in isolation from other European labour market policies that might also influence unemployment rates such as minimum wages and generous unemployment compensation. As pointed out by Lazear (1990), any mandated severance pay can be offset by

Journal ArticleDOI
TL;DR: In this article, the authors explain the coexistence of convergence across countries and the lack thereof at the regional level in the European Union and show that the intensification of international knowledge spillovers due to more cross-country interaction may exacerbate within-country regional disparities, if regions with different specialization do not benefit evenly from the exchange of knowledge.

Journal ArticleDOI
TL;DR: In this article, the effects of immigration quotas on growth and welfare in a North-South version of the quality ladders growth model were analyzed, and it was shown that immigration quotas in the North increase the growth rate, but they lower the static utility level and the discounted welfare of Northern workers.

Journal ArticleDOI
TL;DR: The data quality of these two studies on risk perception models is doubtful, and the analyses show the same low levels of explained variance of risk perception as other researchers have found previously, but the authors still draw optimistic conclusions from their data.
Abstract: Two recent papers on risk perception models are discussed. In these papers, quantitative analyses are presented of risk perception in relation to risk characteristics as specified in the Psychometric Model, and to cultural biases according to Cultural Theory. This comment points out that the data quality of these two studies is doubtful, with a very small convenience sample and a very low response rate. More importantly, the analyses show the same low levels of explained variance of risk perception as other researchers have found previously, but the authors still draw optimistic conclusions from their data. Such conclusions are unjustified.

Journal ArticleDOI
TL;DR: In this article, the authors claim that experts often see risks in their own field of expertise as smaller than the public does, and that risk perception is different from the general public's.
Abstract: Experts have been claimed to perceive risks in a different way than the general public. It is likely that experts often see risks in their own field of expertise as smaller than the public does, bu...

Journal ArticleDOI
TL;DR: In this article, it is shown that the conventional way of measuring the value of a statistical life yields a biased estimate, in general, and the major exception is the case where the estimate can be based on an infinitely short drop in the hazard rate.
Abstract: The value of preventing a fatality or (saving) a statistical life is an important question in health economics as well as environmental economics. This paper adds new insights to several of the issues discussed in the literature. It is shown that the conventional way of measuring the value of a statistical life yields a biased estimate, in general. The major exception is the case where the estimate can be based on an infinitely short drop in the hazard rate. This is so in both life cycle models with and without actuarially fair annuities. Moreover, the claim that there are strong theoretical reasons for believing that the value of statistical life declines with age is shown to be wrong.

Journal ArticleDOI
TL;DR: It was found that NA beliefs explained about 15% of the variance of perceived risk, and that the most powerful explanatory factors were higher consciousness beliefs and beliefs in paranormal phenomena.
Abstract: This is a study of risk perception in relation to New Age (NA) beliefs, including traditional folk superstition and belief in paranormal phenomena, as well as use of alternative healing practices. Data were also obtained on trust dimensions and on personality and psychopathology variables, as well as religious involvement. It was found that four factors accounted for the investigated NA beliefs, which were termed higher consciousness beliefs, denial of analytic knowledge, traditional superstition, and belief in the physical reality of the soul. NA beliefs were strongly and positively related to religious involvement, and negatively to educational level. These beliefs were also positively related to maladjustment and to concerns over tampering with nature. In regression analyses, it was found that NA beliefs explained about 15% of the variance of perceived risk, and that the most powerful explanatory factors were higher consciousness beliefs and beliefs in paranormal phenomena. Traditional superstition and use of healing practices did not contribute to explaining perceived risk.

Journal ArticleDOI
TL;DR: For more than two decades, research on incentives and market equilibrium in situations with asymmetric information has been a prolific part of economic theory as mentioned in this paper, and this work has indeed transformed the way economists think about the functioning of markets.
Abstract: For more than two decades, research on incentives and market equilibrium in situations with asymmetric information has been a prolific part of economic theory. In 1996, the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel recognized James Mirrlees and William Vickrey's fundamental contributions to the theory of incentives under asymmetric information, in particular their applications to the design of optimal income taxation and resource allocation through different types of auctions. The modem theory of markets with asymmetric information rests firmly on the work of this year's prizewinners: George Akerlof (University of California, Berkeley), Michael Spence (Stanford University) and Joseph Stiglitz (Columbia University). This work has indeed transformed the way economists think about the functioning of markets. Analytical methods suggested by Akerlof,

Journal ArticleDOI
TL;DR: In this article, the authors investigate how changes in the commitment power of a principal affect cooperation among agents who work in a team and find that unless the principal can commit herself to long-term wage contracts, an implicit sabotage incentive emerges.
Abstract: We investigate how changes in the commitment power of a principal affect cooperation among agents who work in a team. When the principal and her agents are symmetrically uncertain about the agents’ innate abilities, workers have career concerns. Then, unless the principal can commit herself to long‐term wage contracts, an implicit sabotage incentive emerges. Agents become reluctant to help their teammates. Anticipating this risk, and in order to induce the desired level of cooperation, the principal offers more collectively oriented incentive schemes. Temporary workers, though, are not affected by the sabotage effect, and their incentives are more individually oriented.

Journal ArticleDOI
TL;DR: The authors examined how the media (re)constructs meanings in a major cross-border merger and argued that the two basic discourses are enacted in three analytically distinct discursive practices in the media: factualizing, rationalizing and emotionalizing.
Abstract: In this article, we put forward a novel way of exploring difference and contradiction in merging organizations. We examine how the media (re)constructs meanings in a major cross-border merger. Based on an analysis of press coverage, we attempt to specify and illustrate how particular issues are (re)constructed in media texts through interpretations of ‘winning’ and ‘losing’. We also show how specific discourses are drawn on in this (re)construction. In the merger studied, discourse based on economic and financial rationale dominated the media coverage. Discourse promoting nationalistic sentiments, however, provided an alternative discursive frame to the dominant rationalistic discourse. We argue that the two basic discourses are enacted in three analytically distinct discursive practices in the media: factualizing, rationalizing and emotionalizing. We suggest that the ability of different actors such as top managers to make use of different discursive strategies and resources in promoting their ‘versions of reality’ in the media (or public discussion) is a crucial avenue for research in this area.

Journal ArticleDOI
TL;DR: In this article, perceived risk and attitudes toward technology are considered in a wide contextual perspective Risk perception data are related to technology and technology attributes, in particular with respect to the possibility of replacing a technology, to the belief that it may have as yet unknown effects, and have effects involving a destructive relationship with Nature.
Abstract: In this paper, perceived risk and attitudes toward technology are considered in a wide contextual perspective Risk perception data are related to technology and technology attributes, in particular with respect to the possibility of replacing a technology, to the belief that it may have as yet unknown effects, and have effects involving a destructive relationship with Nature These contextual characteristics of a hazard are shown empirically to add powerful explanatory force to models of risk perception of attitudes toward technology The risk concept is then further differentiated Risk as a property of an activity is distinguished from risk as a property of an unwanted consequence (injury), the latter being clearly more important for policy attitudes It is also found that the operational definition of risk and trust is an important factor in determining the relationship between these two concepts Detailed study of gene technology and nuclear power showed that these hazards were particularly amenable to mapping with risk perception concepts of the kind applied here In the case of gene technology it was also found that consumer intentions displayed much the same risk perception dynamics as policy attitudes