When Gray is Good: Gray Markets and Market‐Creating Investments

Gray markets arise when an intermediary buys a product in a lower‐priced, often emerging market and resells it to compete with the product's original manufacturer in a higher priced, more developed market. Evidence suggests that gray markets make the original manufacturer worse off globally by eroding profit margins in developed markets. Thus, it is interesting that many firms do not implement control systems to curb gray market activity. Our analysis suggests that one possible explanation lies at the intersection of two economic phenomena: firms investing to build emerging market demand, and investments conferring positive externalities (spillovers) on a rival's demand. We find that gray markets amplify the incentives to invest in emerging markets, because investments increase both emerging market consumption and the gray market's cost base. Moreover, when market‐creating investments confer positive spillovers, each firm builds its own market more efficiently. Thus, firms can be better off with gray markets when investments confer spillovers, provided the spillover effect is sufficiently large. These results provide a perspective on why firms might not implement control systems to prevent gray market distribution in sectors where investment spillovers are common (e.g., the technology sector) and, more broadly, why gray markets persist in the economy.     

Bayesian analysis of dynamic magnetic resonance breast images

Summary.  We describe an integrated methodology for analysing dynamic magnetic resonance images of the breast. The problems that motivate this methodology arise from a collaborative study with a tumour institute. The methods are developed within the Bayesian framework and comprise image restoration and classification steps. Two different approaches are proposed for the restoration. Bayesian inference is performed by means of Markov chain Monte Carlo algorithms. We make use of a Metropolis algorithm with a specially chosen proposal distribution that performs better than more commonly used proposals. The classification step is based on a few attribute images yielded by the restoration step that describe the essential features of the contrast agent variation over time. Procedures for hyperparameter estimation are provided, so making our method automatic. The results show the potential of the methodology to extract useful information from acquired dynamic magnetic resonance imaging data about tumour morphology and internal pathophysiological features.     

Bayesian Inference Under Partial Prior Information

Partial prior information on the marginal distribution of an observable random variable is considered. When this information is incorporated into the statistical analysis of an assumed parametric model, the posterior inference is typically non‐robust so that no inferential conclusion is obtained. To overcome this difficulty a method based on the standard default prior associated to the model and an intrinsic procedure is proposed. Posterior robustness of the resulting inferences is analysed and some illustrative examples are provided.     

Societal Transition, Policy Changes and Family Formation: Evidence from Hungary

The paper uses the Hungarian Generations and Gender Survey ‘Turning Points in the Life-course’ (HGGS) to describe recent changes in union formation, onset of childbearing, leaving home and cohabitation. By estimating survivor functions and semi-parametric hazard regression models with time-varying covariates for the timing of first union and first birth, we find a long delay among the youngest cohorts, but also remarkably strong period effects. Reduced employment, increased educational enrolment, and a higher level of uncertainty are important drivers behind these changes. Moreover, our evidence suggests that certain policy changes during the transition have exacerbated this effect, having an asymmetric impact on family formation – depending on the social status of individuals.Aassve, A., Billari, F. C. et Spéder, Zs., 2006. Société en transition, changements de politiques et formation de la famille: le cas de la Hongrie. Revue europé enne de démographie 22: 127–152.     

Extreme voting under proportional representation: the multidimensional case

We study the strategic behavior of voters in a spatial model of proportional representation, in which the policy space is multidimensional. Our main finding is that in large electorate, under some assumptions on voters’ preferences, voters essentially vote, in any equilibrium, only for the extreme parties.     

Stochastic Population Forecasting Based on Combinations of Expert Evaluations Within the Bayesian Paradigm

This article suggests a procedure to derive stochastic population forecasts adopting an expert-based approach. As in previous work by Billari et al. (2012), experts are required to provide evaluations, in the form of conditional and unconditional scenarios, on summary indicators of the demographic components determining the population evolution: that is, fertility, mortality, and migration. Here, two main purposes are pursued. First, the demographic components are allowed to have some kind of dependence. Second, as a result of the existence of a body of shared information, possible correlations among experts are taken into account. In both cases, the dependence structure is not imposed by the researcher but rather is indirectly derived through the scenarios elicited from the experts. To address these issues, the method is based on a mixture model, within the so-called Supra-Bayesian approach, according to which expert evaluations are treated as data. The derived posterior distribution for the demographic indicators of interest is used as forecasting distribution, and a Markov chain Monte Carlo algorithm is designed to approximate this posterior. This article provides the questionnaire designed by the authors to collect expert opinions. Finally, an application to the forecast of the Italian population from 2010 to 2065 is proposed.     

Richer in Money, Poorer in Relationships and Unhappy? Time Series Comparisons of Social Capital and Well-Being in Luxembourg

The worrying decline of social capital (Putnam in Bowling alone: the collapse and revival of American community. Simon and Schuster, New York, 2000) and the disappointing trends of subjective well-being characterising the US (Easterlin in Nations and households in economic growth. Academic Press, New York, 1974; Easterlin and Angelescu in Happiness and growth the world over: time series evidence on the happiness-income paradox, 2009; Easterlin et al. in Proc Natl Acad Sci 107:22463–22468, 2010) raise urgent questions for modern societies: is the erosion of social capital a feature of the more developed and richer countries or is it rather a characteristic aspect of the American society? To test the hypothesis that the erosion of social capital and declining well-being are not a common feature of richer countries, present work focuses on Luxembourg. The main results are: (1) the erosion of social capital is not a legacy of the richest countries in the world; (2) between 1999 and 2008, people in Luxembourg experienced a substantial increase in almost every proxy of social capital; (3) both endowments and trends of social capital and subjective well-being differ significantly within the population. Migrants participate less in social relationships and report lower levels of well-being; (4) the positive relationship between trends of subjective well-being and social capital found in previous literature is confirmed.     

Inventive productivity and patent quality: Evidence from Italian inventors

This paper examines the inventive performances of a regional set of Italian inventors. After stressing that the distribution of the inventors’ productivity is extremely skewed, we find that patent productivity is not influenced by individual characteristics, but it is higher for the inventors working in teams or in large firms with greater patent portfolios. Instead, patent quality is associated with some individual features such as age, gender and level of education. Accordingly, patented innovations coming from inventors working in small firms or independently can be as valuable as those generated in large companies. The policy implications of these findings are discussed.     

Reply to the note by Frejka and Sardon on our paper ‘Patterns of low and lowest-low fertility in Europe’ and an erratum

The relation between socio-economic development and fertility is analysed for the Arab populations of Israel and the territories administered by Israel (i.e. the West Bank and the Gaza Strip). Retrospective survey statistics are used to reconstruct the fertility patterns of currently married Arab women, along with a variety of census information. Fertility responses to socio-economic changes are traced out in detail for the period of the British Mandate, the first 20 years of statehood 1948–67, and the contemporary post-1967 period. The figures show that both Christian and Moslem Arab populations experienced similar high levels of fertility up to the late 1920s. Subsequently, there has been a negative relation between socio-economic development and fertility. In terms of levels of development and fertility decline the sub-populations are ranked in the following order: Israeli urban Christians; Israeli urban Moslems; Israeli rural Christians; Israeli rural Moslems; Moslems in the Administered Territories. The analysis suggests that the timing and rate of fertility reduction are related to the character of specific demographic, economic, and political changes that generate conflicts at the family level.