Improving Analyses of Sanctions Busting

When economic sanctions are directed against a target state by a sender state, the sender obviously wants third countries to participate with the sanctions and can apply pressure on them to prevent sanctions busting behaviour. But why does sanctions busting vary, so that the target’s trade with some third-countries increases but with others decreases? In this paper I offer two improvements to the analysis of sanctions busting: a theoretical framework that recognises how the effects of covariates on sanctions busting can only be identified if we treat them as more conditional than previous studies have done, and a gravity model that captures these conditional effects while also addressing several common specification errors. Applying these improvements to data for 1950–2006 significantly alters some of the central findings contained in previous research about sanctions busting.

A quantile function approach to the distribution of financial returns following TGARCH models

We develop a novel quantile function approach to the distribution of financial returns that follow threshold GARCH models. We propose a Bayesian method to do estimation and forecasting simultaneously, which ensures that the density forecasts can take account of the variation of model parameters. This method also allows us to handle multiple thresholds easily. We conduct extensive simulation studies and apply our method to Nasdaq returns. The results show that our approach is robust to model specification errors and outperforms some commonly used benchmark models.

Metodyczne aspekty wyceny dóbr publicznych na obszarach wiejskich: koncepcja waloryzacji endogenicznej = Methodical aspects of public goods valuation in rural areas: the concept of endogenous valuation

The aim of the study is to create a conceptual framework for the valuation of the endogenous influence of public goods in rural areas using the new approach: the economic surplus valuation method (ESV), which implements the concept of producer and consumer rent. A distinctive feature of the ESV, compared to other market-based valuation methods is the assumption that public goods exert an endogenous impact upon resources and their productivity, but do not act in the model as exogenous variables (as it is in the case of hedonic pricing methods; the HPM). The authors’ approach limits the issues related to the specification bias within the HPM. Moreover, this manner reduces the problems associated with model specification errors in the HPM. The authors argue that ignoring the endogenous impact of public goods on resources and their productivity can lead to distorted results.

An exploration of funds management by emerging contractors

Finance is a critical aspect that needs to be closely monitored in a business and during the lifespan of a construction project. Emerging contractors need to develop and run sustainable businesses in the construction industry. The extent of expertise in funds management by emerging contractors directly relates to their development. Therefore, all efforts must be geared towards their expertise, development and sustenance. Emerging contractors need to manage their finances, be competitive, and deliver projects in the required quality, time and within the allocated budget. This study aims at determining challenges faced by emerging contractors, the root causes of challenges of emerging contractors in funds management, the impact of emerging contractor challenges on project delivery time. Further, the study aims to develop a flow chart that will mitigate emerging contractor challenges in funds management. The study was conducted in KwaZulu-Natal, South Africa using a questionnaire. Questionnaires were distributed in two phases and respondents to the study included emerging contractors and industry stakeholders. Random and systematic sampling techniques were employed in the selection of samples. A total of 85 questionnaires were analysed for the study. Inferential statistics was employed for analysis of data. Findings include late payment for completed work which ultimately causes delays; interference with project performance; inadequate planning; unskilled site manpower; late delivery of material; late identification of errors and resolution of drawings, specification errors and omissions; community unrest, militancy and communal crises and interference by political leaders are some of the key factors that negatively affect emerging contractors’ funds management. When adequate attention is given to these factors, it results in project success. In addition, improvement of contractor performance and quality of work; involvement of tribal authorities, provision of finances for project by funders, securing finances and materials credit; successfully managing project finances from inception to completion leads to profits being made and projects are completed successfully and within budget when payment for work done is effected on time. Recommendations include ensuring that sufficient finances are secured, allocated and properly managed from inception to completion of a project; payments are prepared, submitted and paid on time. Planning is improved to combat project delays including ordering materials in advance, identifying design and specification errors early, engaging all project stakeholders to avoid disputes and attending formal training courses to acquire skills that will assist in running projects and managing successful and sustainable businesses. It is also recommended that the new proposed programme and flowchart be adopted to assist the South African construction industry in improving the financial management practices and develop skill of emerging contractors; its adoption will alleviate challenges facing emerging contractors in funds management.

Performance differences between the episode-based DBC and diagnosis-related DRG case mix systems

This paper explores the question how much detail a cost system needs to have in order to provide reliable cost information at a reasonable price. In general, fine-grained cost systems with a lot of detail (in product definition, in cost drivers and in cost pools) are expected to provide more reliable cost information than coarse- grained cost systems with less detail. This paper takes as an example the DBC cost system that has been developed for the Dutch hospital sector. The fine-grained DBC system with over 40,000 health care products appears to outperform lowergrained DRG systems with “only” 15,000 and 6,000 health care products on cost homogeneity and predictive validity. It does so however at the cost of a high number of products with measurement and specification errors, caused by a large number of outliers and by a low number of observations in product groups. The cost-effectiveness of the DBC system is not very high: only 3% of all DBC-codes explains 80% of total costs, whereas the lower-grained DRG system uses 14% of the codes to explain 80% of total costs. Combined with the high administration cost of the DBCsystem, it was from an economic perspective, a sensible idea to replace the finegrained DBC-system by the coarse-grained DOT system.

Auction-Price Dynamics for Fine Wines from Age-Period-Cohort Models

In an attempt to expand the understanding of auction-price dynamics for fine wines, an age-period-cohort (APC) algorithm is applied to a database of 1.5 million auction results to quantify key drivers of these price dynamics. APC algorithms are designed to separate price appreciation with the age of the wine from overall wine-market conditions as well as to adjust for the unique value of specific vintages. In this context, the APC modeling provides a kind of Hedonic modeling, with specific controls regarding specification errors.The analysis was segmented by Château Lafite Rothschild, Bordeaux excluding Lafite, and Burgundy so that we could test specific events related to Château Lafite Rothschild. The results show price dynamics versus the ages of the wines and allow for the measurement of long-term price-appreciation potential. Environment functions versus auction dates quantify the “Lafite Bubble” and suggest past correlation to Chinese stock-market indices. An analysis of wine ratings versus price quantifies their nonlinear relationship. An analysis across nine auction houses shows a significant price spread for similar wines. (JEL Classifications: C23, D44, G11, G12, Q11)