Stockholm School of Economics

About: Stockholm School of Economics is a education organization based out in Stockholm, Sweden. It is known for research contribution in the topics: Population & Cost effectiveness. The organization has 1186 authors who have published 4891 publications receiving 285543 citations. The organization is also known as: Stockholm Business School & Handelshögskolan i Stockholm.

Explaining Individual Risk Perception: The Case of Nuclear Waste

Abstract: This paper deals with models of perceived risk, applied to the case of nuclear waste. Data from a major survey recently conducted in municipalities where there were intense discussions about the siting of nuclear waste are analyzed (N = 2523). It is pointed out that previous work on the psychometric model has achieved some success in accounting for perceived risk, but the claim that emotional factors are the main engine in such accounting is shown to be misleading. New risk, the other major psychometric factor, is found to be very weak. The major factors supported by the present results were specific radiation risk, attitude to nuclear power (NP), severity of consequences, and the tendency to amplify or attenuate all perceived risks. These variables accounted for about 65 per cent of both personal and general perceived risk of nuclear waste. A simplified model was somewhat more powerful, and also supported, to some extent, 'interfering with nature'and 'trust 'as explanatory concepts. It is pointed out that the counter-argument to some of these explanatory constructsthat they overlap semantically with perceived nuclear waste risk-is misleading and false. A special analysis showed that there were both extreme risk deniers and extreme risk alarmists among the respondents, but twice as many deniers as alarmists. The latter group was found most clearly among women with a low level of education. Finally, the results are discussed with relation to the psychology of risk perception.

Measuring the Shadow Economy Using Company Managers

Abstract: This study develops a method that uses surveys of company managers to measure the size of a shadow economy. Our method is based on the premise that company managers are the most likely to know how much business income and wages go unreported due to their unique position in dealing with both of these types of income. We use a range of survey design features to maximize the truthfulness of responses. Our method combines estimates of misreported business income, unregistered or hidden employees, and unreported wages, to arrive at an estimate of the size of a shadow economy as a percentage of GDP. This approach differs from most other studies of shadow economies, which largely focus on using macro indicators. We illustrate the application of our method to three new EU member countries. We also analyze the factors that influence companies’ participation in the shadow economy.

Confidence Interval Estimation Tasks and the Economics of Overconfidence

Abstract: Experiments in psychology, where subjects estimate confidence intervals to a series of factual questions, have shown that individuals report far too narrow intervals. This has been interpreted as evidence of overconfidence in the preciseness of knowledge, a potentially serious violation of the rationality assumption in economics. Following these results a growing literature in economics has incorporated overconfidence in models of, for instance, financial markets. In this paper we investigate the robustness of results from confidence interval estimation tasks with respect to a number of manipulations: frequency assessments, peer frequency assessments, iteration, and monetary incentives. Our results suggest that a large share of the overconfidence in interval estimation tasks is an artifact of the response format. Using frequencies and monetary incentives reduces the measured overconfidence in the confidence interval method by about 65%. The results are consistent with the notion that subjects have a deep aversion to setting broad confidence intervals, a reluctance that we attribute to a socially rational trade-off between informativeness and accuracy.

A new non-linear GARCH model

Abstract: This dissertation contains four papers in the field of financial econometrics. In the first paper, A Smooth Transition ARCH Model for Asset Returns, a new class of ARCH models is introduced. The model class allows for non-linearity in the equation for the conditional variance. Two forms of non-linearity are considered: (i) asymmetry regarding the sign of residuals, and (ii) non-linearity regarding the size of residuals. Furthermore, specification tests for the models are presented. The second paper, Specification Tests for Asymmetric GARCH, presents two new Lagrange multiplier test statistics designed for testing the null of GARCH(1,1), against the alternative of asymmetric GARCH. Small sample properties for the statistics are presented and the power of both tests is shown to be superior to that of previously proposed tests. This is true for a large group of asymmetric GARCH models, providing that the proposed tests can detect general GARCH asymmetry. The third paper, Modeling Nordic Stock Returns with Asymmetric GARCH models, investigates the presence of asymmetric GARCH effects in a number of equity return series, and compares the modeling performance of seven different asymmetric GARCH models. The data consists of daily returns for 45 Nordic stocks, for the period July 1991 to July 1996. The paper also introduces three new procedures for asymmetry testing. The proposed LM tests allow for heterokurtosis under the null. The final paper, Discrete Time Hedging of OTC Options in a GARCH Environment: A Simulation Experiment, examines the effect of using the Black and Scholes formula for pricing and hedging options in a discrete time heteroskedastic environment using a simulation procedure. It is shown that the variance of the returns on the hedged position is considerably higher in a GARCH(1,1) environment than in a homoskedastic environment. The variance of returns is heavily dependent on the level of kurtosis in the returns process and on the first-order autocorrelation in centered and squared returns.Each paper is self-contained and can be read in an order chosen by the reader.In an introductory chapter, the reader is given a general summary of the ARCH literature and will gain a clear understanding of how the four essays relate to previous work in the econometrics and finance literature, and to practical considerations of econometric modeling.

Brands affect slogans affect brands? Competitive interference, brand equity and the brand-slogan link

Abstract: Brand slogans have been subject to much interest from both practitioners and researchers, the reason being that slogans may have positive effects on their brands. Previous research has mainly focus ...