An EM algorithm for estimating negative binomial parameters

An EM algorithm is proposed for computing estimates of parameters of the negative bi-nomial distribution; the algorithm does not involve further iterations in the M-step, in contrast with the one given in Schader & Schmid (1985). The approach can be applied to the corresponding problem in the logarithmic series distribution. The convergence of the proposed scheme is investigated by simulation, the observed Fisher information is derivedand numerical examples based on real data are presented.     

One-reason decision-making: Modeling violations of expected utility theory

People violate expected utility theory and this has been traditionally modeled by augmenting its weight-and-add framework by nonlinear transformations of values and probabilities. Yet individuals often use one-reason decision-making when making court decisions or choosing cellular phones, and institutions do the same when creating rules for traffic safety or fair play in sports. We analyze a model of one-reason decision-making, the priority heuristic, and show that it simultaneously implies common consequence effects, common ratio effects, reflection effects, and the fourfold pattern of risk attitude. The preferences represented by the priority heuristic satisfy some standard axioms. This work may provide the basis for a new look at bounded rationality.

Flood Footprint Assessment: A Multiregional Case of 2009 Central European Floods

Hydrometeorological phenomena have increased in intensity and frequency in last decades, with Europe as one of the most affected areas. This accounts for considerable economic losses in the region. Regional adaptation strategies for costs minimization require a comprehensive assessment of the disasters’ economic impacts at a multiple-region scale. This article adapts the flood footprint method for multiple-region assessment of total economic impact and applies it to the 2009 Central European Floods event. The flood footprint is an impact accounting framework based on the input–output methodology to economically assess the physical damage (direct) and production shortfalls (indirect) within a region and wider economic networks, caused by a climate disaster. Here, the model is extended through the capital matrix, to enable diverse recovery strategies. According to the results, indirect losses represent a considerable proportion of the total costs of a natural disaster, and most of them occur in nonhighly directly impacted industries. For the 2009 Central European Floods, the indirect losses represent 65% out of total, and 70% of it comes from four industries: business services, manufacture general, construction, and commerce. Additionally, results show that more industrialized economies would suffer more indirect losses than less-industrialized ones, in spite of being less vulnerable to direct shocks. This may link to their specific economic structures of high capital-intensity and strong interindustrial linkages.     

“A 30% Chance of Rain Tomorrow”: How Does the Public Understand Probabilistic Weather Forecasts?

The weather forecast says that there is a "30% chance of rain," and we think we understand what it means. This quantitative statement is assumed to be unambiguous and to convey more information than does a qualitative statement like "It might rain tomorrow." Because the forecast is expressed as a single-event probability, however, it does not specify the class of events it refers to. Therefore, even numerical probabilities can be interpreted by members of the public in multiple, mutually contradictory ways. To find out whether the same statement about rain probability evokes various interpretations, we randomly surveyed pedestrians in five metropolises located in countries that have had different degrees of exposure to probabilistic forecasts--Amsterdam, Athens, Berlin, Milan, and New York. They were asked what a "30% chance of rain tomorrow" means both in a multiple-choice and a free-response format. Only in New York did a majority of them supply the standard meteorological interpretation, namely, that when the weather conditions are like today, in 3 out of 10 cases there will be (at least a trace of) rain the next day. In each of the European cities, this alternative was judged as the least appropriate. The preferred interpretation in Europe was that it will rain tomorrow "30% of the time," followed by "in 30% of the area." To improve risk communication with the public, experts need to specify the reference class, that is, the class of events to which a single-event probability refers.     

Des relations professionnelles transnationales à la négociation collective transfrontière

Face à la mondialisation, les fédérations syndicales internationales et les entreprises multinationales ont cherché à protéger leurs intérêts par des «accords‐cadres internationaux», ou ACI. En modélisant les processus de négociation sous‐jacents, les auteurs montrent que ces accords n'aboutissent que si les deux partenaires présentent une aversion pour le risque et qu'ils tendent à favoriser celle des parties chez qui cette aversion est moins prononcée, les multinationales en l'occurrence, aux dépens des travailleurs. Les choses pourraient évoluer cependant si les syndicats parviennent, par une action transnationale, à déstabiliser les multinationales en menaçant leur réputation, rapprochant le niveau d'aversion pour le risque des deux interlocuteurs.     

An economic analysis of nanofood labeling

The paper examines the economic effects of labeling food nanotechnology products using an analytical framework of heterogeneous consumers and imperfectly competitive suppliers. Labeling results in increased costs for nanofood producers (the cost effect of the labeling policy), reduced consumer uncertainty regarding the nature of the food product (certainty effect), and can affect consumer attitudes towards nanofoods by being perceived as a warning signal (stigma effect). In this context, nanofood labeling can change the perceived quality differences between nanofoods and their conventional and organic counterparts, with such changes being more salient when the stigma effect is large, when consumers have low awareness of food nanotechnology in the absence of labeling, and/or when competition among nanofood suppliers is more intense. Despite its empirical relevance, the impact of a labeling policy on consumer preferences (and the economic ramifications of such impact) has largely been ignored by the theoretical literature on the economics of labels. Our analysis shows that it matters. Specifically, our study shows that the market and welfare effects of labeling are case-specific and dependent on consumer awareness of, and attitudes towards food nanotechnology before and after the introduction of the policy as well as the relative magnitude of the cost, certainty and stigma effects of nanofood labeling. Our analytical findings also suggest that the effects of nanofood labels on consumer welfare are asymmetric with certain groups of consumers benefiting even when labeling has a stigma effect on nanofoods.     

Truncated Poisson Regression for Time Series of Counts

We consider partial likelihood analysis of a truncated Poisson regression model for time series of counts. We focus our attention on the study of asymptotic theory for the maximum partial likelihood estimator of a vector of regression parameters. Simulations and data analysis integrate the presentation.     

Does the theory of planned behavior elements mediate the relationship between perceived constraints and intention to participate in physical activities? A study among older individuals

This study aimed to investigate the degree to which the elements of the theory of planned behavior mediate the relationship between constraints and intention to continuing participation in physical activities. The sample of the study consisted of 119 (N = 119) older individuals who participated in organized physical activity programs. The results indicated that attitudes and perceived behavioral control were negatively correlated with constraints, whereas the subjective norm variable had no relationship with them. In terms of the mediation role of the elements of the theory of planned behavior, the results indicated that both attitudes and perceived behavioral control partially mediated the relationship between constraints and intention, with the perceived behavioral control variable being the strongest mediator. These findings suggest that the theory of planned behavior elements mediate the constraints–intention relationship and determine, in a large degree, the older individuals’ intention to continuing taking part in physical activities.     

The size of under-reporting bias in recorded transnational terrorist activity

Summary.  We address an apparent gap in the applied terrorism literature providing an estimate for the size of under-reporting in transnational terrorist activity. The method that is suggested is computationally straightforward and takes into account the stochastic interactions between terrorism, polity and press freedom in a manner that utilizes their sample properties. The outcome from the application of this metric is that underreporting bias is indeed present and quite sizable.