A Quantitative Theory of Unsecured Consumer Credit with Risk of Default

We study, theoretically and quantitatively, the general equilibrium of an economy in which households smooth consumption by means of both a riskless asset and unsecured loans with the option to default. The default option resembles a bankruptcy filing under Chapter 7 of the U.S. Bankruptcy Code. Competitive financial intermediaries offer a menu of loan sizes and interest rates wherein each loan makes zero profits. We prove the existence of a steady‐state equilibrium and characterize the circumstances under which a household defaults on its loans. We show that our model accounts for the main statistics regarding bankruptcy and unsecured credit while matching key macroeconomic aggregates, and the earnings and wealth distributions. We use this model to address the implications of a recent policy change that introduces a form of “means testing” for households contemplating a Chapter 7 bankruptcy filing. We find that this policy change yields large welfare gains.     

Disaster risk and artificial intelligence: A framework to characterize conceptual synergies and future opportunities

Artificial intelligence (AI) methods have revolutionized and redefined the landscape of data analysis in business, healthcare, and technology. These methods have innovated the applied mathematics, computer science, and engineering fields and are showing considerable potential for risk science, especially in the disaster risk domain. The disaster risk field has yet to define itself as a necessary application domain for AI implementation by defining how to responsibly balance AI and disaster risk. (1) How is AI being used for disaster risk applications; and how are these applications addressing the principles and assumptions of risk science, (2) What are the benefits of AI being used for risk applications; and what are the benefits of applying risk principles and assumptions for AI-based applications, (3) What are the synergies between AI and risk science applications, and (4) What are the characteristics of effective use of fundamental risk principles and assumptions for AI-based applications? This study develops and disseminates an online survey questionnaire that leverages expertise from risk and AI professionals to identify the most important characteristics related to AI and risk, then presents a framework for gauging how AI and disaster risk can be balanced. This study is the first to develop a classification system for applying risk principles for AI-based applications. This classification contributes to understanding of AI and risk by exploring how AI can be used to manage risk, how AI methods introduce new or additional risk, and whether fundamental risk principles and assumptions are sufficient for AI-based applications.     

Nonparametric approaches for comparing three-period,two-treatment,four-sequence crossover designs

The paper describes nonparametric approaches for comparing three-period, two-treatment, four-sequence crossover designs through testing the hypothesis that the treatments are interchangeable. The proposed approaches are based on a model which incorporates, along with the direct treatment effects, self and mixed carryover effects. Related asymptotic results are obtained. Comparisons among the designs are made numerically with respect to type I error rate and power of the tests considering compound symmetry and autoregressive covariance structures of the response variables. Lengths of the confidence intervals of the treatment differences are also used to make comparative study among the designs.     

Some new lower bounds to various discrepancies on combined designs

The foldover is a useful technique in construction of two-level factorial designs. A foldover design is the follow-up experiment generated by reversing the sign(s) of one or more factors in the initial design. The full design obtained by joining the runs in the foldover design to those of the initial design is called the combined design. In this article, some new lower bounds of various discrepancies of combined designs, such as the centered, symmetric, and wrap-around L₂-discrepancies, are obtained, which can be used as a better benchmark for searching optimal foldover plans. Our results provide a theoretical justification for optimal foldover plans in terms of uniformity criterion.     

Patterns of NBA team performance from 1950 to 1998

This paper examines team performance in the NBA over the last five decades. It was motivated by two previous observational studies, one of which studied the winning percentages of professional baseball teams over time, while the other examined individual player performance in the NBA. These studies considered professional sports as evolving systems, a view proposed by evolutionary biologist Stephen Jay Gould, who wrote extensively on the disappearance of .400 hitters in baseball. Gould argued that the disappearance is actually a sign of improvement in the quality of play, reflected in the reduction of variability in hitting performance. The previous studies reached similar conclusions in terms of winning percentages of baseball teams, and performance of individual players in basketball. This paper uses multivariate measures of team performance in the NBA to see if similar characteristics of evolution can be observed. The conclusion does not appear to be clearly affirmative, as in previous studies, and possible reasons for this are discussed.     

Inequalities in the public sphere: emergence of community television in India

Economic restructuring in the 1980s opened the doors to the previously state-dominated television sector in developing countries. In India, unexpectedly, the resulting competitive setting produced multiple channels targeting various local ethnicities from below along with national-level expansion involving transnational corporations from above in a process now known as localization. While the plurality of channels translates into growth of the public sphere, this paper examines the reasons behind the uneven growth of community media, which cannot be explained by the community's size or economic resources. Some community channels extend their reach into the national arena while others lag in media development implying unequal political participation in the communicative system. What are the institutional reasons behind such variations in a multiethnic setting? The paper also examines whether the development of ethnic media reflects the redistribution of power taking place in the political arena or is it an independent development with implications of its own.     

On stratified bivariate ranked set sampling with optimal allocation for naïve and ratio estimators

The purpose of the current work is to introduce stratified bivariate ranked set sampling (SBVRSS) and investigate its performance for estimating the population mean using both naïve and ratio methods. The properties of the proposed estimator are derived along with the optimal allocation with respect to stratification. We conduct a simulation study to demonstrate the relative efficiency of SBVRSS as compared to stratified bivariate simple random sampling (SBVSRS) for ratio estimation. Data that consist of weights and bilirubin levels in the blood of 120 babies are used to illustrate the procedure on a real data set. Based on our simulation, SBVRSS for ratio estimation is more efficient than using SBVSRS in all cases.     

On stratified bivariate ranked set sampling for regression estimators

We investigate the relative performance of stratified bivariate ranked set sampling (SBVRSS), with respect to stratified simple random sampling (SSRS) for estimating the population mean with regression methods. The mean and variance of the proposed estimators are derived with the mean being shown to be unbiased. We perform a simulation study to compare the relative efficiency of SBVRSS to SSRS under various data-generating scenarios. We also compare the two sampling schemes on a real data set from trauma victims in a hospital setting. The results of our simulation study and the real data illustration indicate that using SBVRSS for regression estimation provides more efficiency than SSRS in most cases.     

Estimating the hazard functions of two alternately occurring recurrent events

Often two recurrent events of equal importance can occur alternately. The life-time patterns of the two events can then be of considerable interest. In this paper, we consider two such events, the inclusion and exclusion of players in a team sport, and study whether there is any inherent pattern in the time-lengths between these events. The life-time distributions are modelled and methods of estimating the model parameters suggested taking into account any relationship in the pattern of recurrence. The results are then applied to the inclusion and exclusion of players in the Indian national cricket team. As further illustration, a simulation study is made. Broad application areas are identified both in the introduction and conclusion.