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Expenditure trends in US advertising : long-term effects and structural changes with new media introductions
(2012-06) Esteban-Bravo, Mercedes; Vidal-Sanz, Jose M.; Yildirim, Gökhan; Universidad Carlos III de Madrid. Departamento de Economía de la Empresa
Historically US Media channels have competed to attract advertising expenditure from marketing. This has been a fierce battle, where, every few years, incumbents have been shattered by the introduction of a new media such as TV, Yellow Pages, Cable and the Internet. In this paper we will analyze and discuss the dynamic trend in advertising expenditure for ten different advertising media channels in the U.S., by estimating the long-term equilibrium between these time series, and their equilibrium cross-elasticities. We will also analyze how they are related to the business cycle, both at the aggregated level and specifically for each media. To this end, it is crucial to consider simultaneously the impact of new media introductions over the incumbents, estimating the potential effects of structural changes. Both, the introduction effects and the long-term equilibrium relationship between two media can be very different. In particular, we will study the influence of the Internet
A nonlinear product differentiation model à la Cournot: a new look to the newspapers industry
(2013-07) Esteban-Bravo, Mercedes; Vidal-Sanz, Jose M.; Universidad Carlos III de Madrid. Departamento de Economía de la Empresa
In this work, we develop a new model for competition in markets with differentiated products. In addition, we present a consumer model designed to produce a flexible nonlinear inverse demand system that resembles the classical Multinomial Logit model, and discuss several extensions. We characterize firms competition in quantities based on the inverse demand system. The model is applied to the Spanish newspaper industry. This is a highly competitive two-sided market whose revenues are generated from sales and to a larger extent from advertising driven by its circulation. We then characterize the Perfect Equilibrium by conditional moment conditions, and estimate the parameters using the Generalized Method of Moments
Tullock contests with asymmetric information
(2013-07) Einy, Ezra; Haimanko, Ori; Moreno, Diego; Sela, A.; Shitovitz, Benyamin; Universidad Carlos III de Madrid. Departamento de Economía
We show that under standard assumptions a Tullock contest with asymmetric information has a pure strategy Bayesian equilibrium. Moreover, two-player common-value Tullock contests in which one of the players has an information advantage have a unique equilibrium. In equilibrium both players exert the same expected effort, and although the player with information advantage wins the prize with probability less than one-half, his payoff is greater or equal to that of his opponent. In common-value Tullock contests with more players any information advantage is rewarded, but the other properties of two players contests do not hold
A framework for analyzing performance in higher education
(2013-07) Duque, Lola C.; Universidad Carlos III de Madrid. Departamento de Economía de la Empresa
Drawing on Tinto’s dropout intentions model (1975), Bean’s socialization model (1985), Astin’s involvement theory (1999), and the service marketing literature, this research presents a conceptual framework for analyzing students’ satisfaction, perceived learning outcomes, and dropout intentions. This framework allows for a better understanding of how students assess the university experience and how these perceptions affect future intentions. This article presents four studies testing fragments of the framework using data sets come from three countries and various undergraduate programs (business, economics, geography, and nursing). The models are tested using structural equation modeling with data collected using a questionnaire adapted to the specific contexts. The models have the ability to explain the studies’ dependent variables and offer practical utility for decision making. Applicability of the conceptual framework is evaluated in various contexts and with different student populations. One important finding is that student co-creation can be as important as perceived service quality in explaining students’ cognitive learning outcomes, which in turn explain a high percentage of satisfaction and affective learning outcomes. The studies also shed light on the roles of variables such as emotional exhaustion and dropout intentions
Co-summability from linear to non-linear cointegration
(2013-06) Berenguer Rico, Vanessa; Gonzalo, Jesús; Universidad Carlos III de Madrid. Departamento de Economía
While co-integration theory is an ideal framework to study linear relationships among persistent economic time series, the intrinsic linearity in the concepts of integration and co-integration makes it unsuitable to study non-linear long run relations among persistent processes. This drawback hinders the empirical analysis of modern macroeconomics, which often addresses asymmetric responses to policy interventions, multiplicity of equilibria, transitions between regimes or polynomial approximations to unknown functions. In this paper, to cope with non-linear relations and consequently to generalise co-integration, we formalise the idea of co-summability. It is built upon the concept order of summability developed by Berenguer-Rico and Gonzalo (2013), which, in turn, was conceived to address non-linear transformations of persistent processes. Theoretically, a co-summable relationship is balanced -in terms of the variables involved having the same order of summability- and describes a long run equilibrium that can be non-linear -in the sense that the errors have a lower order of summability. To test for these types of equilibria, inference tools for balancedness and cosummability are designed and their asymptotic properties are analysed. Their finite sample performance is studied via Monte Carlo experiments. The practical strength of co-summability theory is shown through two empirical applications. Specifically, asymmetric preferences of central bankers and the environmental Kuznets curve hypothesis are studied through the lens of co-summability.
Structural change, collective action, and social unrest in 1930s Spain
(2013-06) Domènech Feliu, Jordi; Miley, Thomas Jeffrey; Universidad Carlos III de Madrid. Departamento de Historia Económica e Instituciones
The Spanish 2nd Republic (1931-1936) witnessed one of the fastest and deepest processes of popular mobilization in interwar Europe, generating a decisive reactionary wave that brought the country to the Civil War (1936-1939). We show in the paper that both contemporary comment and part of the historiography makes generalizations about the behaviour of the working classes in the period that stress idealistic, re-distributive and even religious motives to join movements of protest. In some other cases, state repression, poverty, and deteriorating living standards have been singled out as the main determinants of participation. This paper uses collective action theory to argue that key institutional changes and structural changes in labour markets were crucial to understand a significant part of the explosive popular mobilization of the period. We argue first that, before the second Republic, temporary migrants had been the main structural limitation against the stabilization of unions and collective bargaining in agricultural labour markets and in several service and industrial sectors. We then show how several industries underwent important structural changes since the late 1910s which stabilized part of the labour force and allowed for union growth and collective bargaining. In agricultural labour markets or in markets in which unskilled temporary workers could not be excluded, unions benefitted from republican legislation restricting temporary migrations and, as a consequence, rural unions saw large gains membership and participation. Historical narratives that focus on state repression or on changes in living standards to explain collective action and social conflict in Spain before the Civil War are incomplete without a consideration of the role of structural changes in labour markets from 1914 to 1931.
Religious diversity, intolerance and civil conflict
(2013-05) Gomes, Joseph Flavian; Universidad Carlos III de Madrid. Departamento de Economía
We compute new measures of religious diversity and intolerance and study their effects on civil conflict. Using a religion tree that describes the relationship between different religions, we compute measures of religious diversity at three different levels of aggregation. We find that religious diversity is a significant and robust correlate of civil conflict. While religious fractionalization significantly reduces conflict, religious polarization increases it. This is most robust at the second level of aggregation which implies that the cleavage between Hindus, Muslims, Jews, and Christians etc. is more relevant than that between either subgroups of religions like Protestants and Catholics, Shias and Sunnis, etc. or that between higher levels of aggregation like Abrahamic and Indian religions. We find religious intolerance to be a significant and robust predictor of conflict. Ethnic polarization ceases to be a robust predictor of civil conflict once we control for religious diversity and intolerance. We find no evidence that some religions are more violent than others.
Market potential and city growth : Spain 1860-1960
(2013-05) González-Val, Rafael; Tirado, Daniel A.; Viladecans-Marsal, Elisabet; Universidad Carlos III de Madrid. Departamento de Historia Económica e Instituciones
A few attempts have been made to analyse whether market potential might also have an impact on urban structures. In this paper we employ parametric and non-parametric techniques to analyse the effect of market potential on the growth of Spanish cities during the period 1860-1960. This period is especially interesting because it is characterized by the advance in the economic integration of the national market together with an intense process of industrialization. Our results show a clear positive influence of market potential on city growth.
Young adults living with their parents and the influence of peers
(2013-05) Adamopoulou, Effrosyni; Kaya, Ezgi; Universidad Carlos III de Madrid. Departamento de Economía
This paper focuses on young adults living with their parents in the U.S. and studies the role of peers. Using data from the National Longitudinal Study of Adolescent Health (Add Health)we analize the influence of high school friends on the coresidence of young adults with their parents. We address the challenges in the identification of peer effects in a static framework and employ an instrumental variable technique and control for state fixed effects in order to mitigate them. We then move to a dynamic framework and exploit differences in the timing of leaving the parental home among peers. Our results indicate that there are statistically significant peer effects on the nest-leaving behavior of young adults.
The impact of extreme observations in citation distributions
(2013-04) Li, Yunrong; Ruiz-Castillo, Javier; Universidad Carlos III de Madrid. Departamento de Economía
This paper studies the role of extremely highly cited articles in two instances: the measurement of citation inequality, and mean citation rates. Using a dataset, acquired from Thomson Scientific, consisting of 4.4 million articles published in 1998-2003 in 22 broad fields with a five-year citation window, the main results are the following. Firstly, both within each of 22 broad fields and in the all-sciences case, citation inequality is strongly affected by the presence of a handful of extreme observations, particularly when it is measured by citation inequality indices that are very sensitive to citation differences in the upper tail of citation distributions. Secondly, the impact of extreme observations on citation averages is generally much smaller. The concluding Section includes some practical lessons for students of citation inequality and/or users of high-impact indicators
The ripples of the Industrial revolution: exports, economic growth and regional integration in Italy in the early 19th century
(2013-04) Federico, Giovanni; Tena Junguito, Antonio; Universidad Carlos III de Madrid. Departamento de Historia Económica e Instituciones; Universidad Carlos III de Madrid. Instituto Figuerola de Historia Económica
The conventional wisdom about the early stages of modern economic growth in Italy is still heavily influenced by the work of L.Cafagna (1989). He argued that exports of primary products to industrializing North Western countries were the main source of growth and that exports of silk stimulated the industrialization of the North-West (the “industrial triangle”). However, the benefits did not extend to the rest of the country. In this paper we argue that this view is not supported by the trade data. Italian exports grew slowly relative to European and world trade and exports from the North grew less than the total. This view tallies well with some recent estimates of GDP per capita, which show no increase before the Unification (1861)
Quantitative evaluation of alternative field normalization procedures
(2013-03) Li, Yunrong; Radicchi, Filippo; Castellano, Claudio; Ruiz-Castillo, Javier; Universidad Carlos III de Madrid. Departamento de Economía
ide differences in publication and citation practices makes impossible the direct comparison of raw citation counts across scientific disciplines. Recent research has studied new and traditional normalization procedures aimed at suppressing as much as possible these disproportions in citation numbers among scientific domains. Using the recently introduced IDCP (Inequality due to Differences in Citation Practices) method, this paper rigorously tests the performance of six cited-side normalization procedures based on the Thomson Reuters classification system consisting of 172 subfields. We use six yearly datasets from 1980 to 2004, with widely varying citation windows from the publication year to May 2011. The main findings are the following three. Firstly, as observed in previous research, within each year the shapes of sub-field citation distributions are strikingly similar. This paves the way for several normalization procedures to perform reasonably well in reducing the effect on citation inequality of differences in citation practices. Secondly, independently of the year of publication and the length of the citation window, the effect of such differences represents about 13% of total citation inequality. Thirdly, a recently introduced two-parameter normalization scheme outperforms the other normalization procedures over the entire period, reducing citation disproportions to a level very close to the minimum achievable given the data and the classification system. However, the traditional procedure of using sub-field mean citations as normalization factors yields also good results.
On the inefficiency of Brownian motions and heavier tailed price processes
(2013) Balbás, Alejandro; Balbás, Beatriz; Balbás, Raquel; Universidad Carlos III de Madrid. Instituto para el Desarrollo Empresarial (INDEM)
Recent literature has shown the existence of pathologies if one combines the most important models for pricing and hedging derivatives and coherent risk measures. There may exist portfolios (good deals) whose (return; risk) is as close as desired to (1; 􀀀1). This paper goes beyond existence properties and looks for explicit constructions and empirical tests. It will be shown that the good deal above may be a combination of European and digital options, very easy to replicate in practice. This theoretical nding will enable us to implement empirical experiments involving three international stock indices (S&P_500, Eurostoxx_50 and DAX) and three commodity futures (Gold, Brent and DJ 􀀀 UBSCI). According to the empirical results, the good deal always outperforms the underlying index/commodity. The good deal is built in full compliance with the standard Derivative Pricing Theory. Properties of classical pricing models totally inspire and lead the good deal construction. This is a very interesting di¤erence with respect to previous literature attempting to outperform a benchmark. Besides, the selected pricing models satisfy the existence of risk neutral probabilities such that self- nancing price processes become martingales. According to recent results, while local martin- gales characterize the absence of arbitrage, martingales characterize the existence of equilibrium. However, this equilibrium is di¢ cult to imagine, because for every portfolio traders can build a new one with identical price, higher return and lower risk. Perhaps dynamic arbitrage free pricing models contradict other important achievements of Financial Economics related to e¢ ciency and equilibrium, and further research is required to recover consistency.
Valoración del renombre de las marcas deportivas : un análisis empírico para las marcas españolas de clubes de fútbol
(2011) Nuñez Barriopedro, Estela; Cerviño, Julio
La gestión de una marca deportiva, tiene una consideración estratégica. La marca es la herramientafundamental para crear y mantener una ventaja competitiva sostenible en un gran número desectores económicos, especialmente en el deporte y más concretamente en los clubes de fútbol. Este trabajo pretende estudiar el valor de marca contrastado empíricamente de los clubes de fútbol españoles puesto que es un instrumento clave tanto desde el punto de vista del valor relacional en el mercado como en el plano de la valoración económico-financiera y valor para los accionistas.
The evolution of the scientific productivity of highly productive economist
(2012-10) Carrasco, Raquel; Ruiz-Castillo, Javier; Universidad Carlos III de Madrid. Departamento de Economía
This paper studies the evolution of research productivity of a sample of economists working in the best 81 departments in the world in 2007. The main novelty is that, in so far as a productivity distribution can be identified with an income distribution, we measure productivity mobility in a dynamic context using an indicator inspired in an income mobility index suggested by Fields (2010) for a two-period world. Productivity is measured in terms of the number of publications in each of four classes, weighted according to a rather elitist scheme. We study the evolution of average productivity, productivity inequality, the extent of rank reversals, and productivity mobility for seven cohorts, as well as the population as a whole. We offer new evidence confirming previous results about the heterogeneity of the evolution of productivity for top and other researchers. However, the major result is that –contrary to what was expected– for our sample of very highly productive scholars the effect of rank reversals between the two periods on overall productivity mobility offsets the effect of an increase in productivity inequality from the first to the second period in the youngest five out of seven cohorts
The effect of earned vs. house money on price bubble formation in experimental asset markets
(2013-02) Corgnet, Brice; Hernán, Roberto; Kujal, Praveen; Porter, David; Universidad Carlos III de Madrid. Departamento de Economía
Can “house money” explain asset market bubbles? We test this hypothesis in an asset experiment with a certain dividend cash and shares is given to subjects initial portfolios are constructed using subject that bubbles still occur; however trading volumes are significantly abated and the dispersion of earnings is significantly lower when subjects earn their starting endowments. We investigate the role of cognitive ability in accounting for the differences in earnings distribution across treatments by using the Cognitive Reflection Test (CRT). We find that high CRT subjects earned more money on average than the initial value of their portfolio while low CRT subjects earned less. Subjects with low CRT scores were net purchasers (sellers) of shares when the price was above (below) fundamental value while the opposite was true for subjects with high CRT scores.
The effect on citation inequality of differences in citation practices at the Web of Sciences subject category level
(2013-02) Crespo, Juan A.; Herranz, Neus; Li, Yunrong; Ruiz-Castillo, Javier; Universidad Carlos III de Madrid. Departamento de Economía
This paper studies the impact of differences in citation practices at the sub-field, or Web of Science subject category level using the model introduced in Crespo et al. (2012) according to which the number of citations received by an article depends on its underlying scientific influence and the field to which it belongs. We use the same Thomson Reuters dataset of about 4.4 million articles published in 1998-2003 with a fiveyear citation window used in Crespo et al. (2013) to analyze a classification system consisting of 22 broad fields. The main results are the following four. Firstly, as expected, when the classification system goes from 22 broad fields to 219 sub-fields the effect on citation inequality of differences in citation practices increases from approximately 14% at the field level to 18% at the sub-field level. Secondly, we estimate a set of exchange rates (ERs) to express the citation counts of articles in a wide quantile interval into the equivalent counts in the all-sciences case. For example, in the fractional case we find that in 187 out of 219 sub-fields the ERs are reliable in the sense that the coefficient of variation is smaller than or equal to 0.10. ERs are estimated over the [660, 978] interval that, on average, covers about 62% of all citations. Thirdly, in the fractional case the normalization of the raw data using the ERs (or sub-field mean citations) as normalization factors reduces the importance of the differences in citation practices from 18% to 3.8% (3.4%) of overall citation inequality. Fourthly, the results in the fractional case are essentially replicated when we adopt the multiplicative approach
The reaction of stock market returns to anticipated unemployment
(2012-07-06) Gonzalo, Jesús; Taamouti, Abderrahim; Universidad Carlos III de Madrid. Departamento de Economía
We empirically investigate the short-run impact of anticipated and unanticipated unemployment rates on stock prices. We particularly examine the nonlinearity in stock market's reaction to unemployment rate and study the effect at each individual point (quantile) of stock return distribution. Using nonparametric Granger causality and quantile regression based tests, we find that, contrary to the general findings in the literature, only anticipated unemployment rate has a strong impact on stock prices. Quantile regression analysis shows that the causal effects of anticipated unemployment rate on stock return are usually heterogeneous across quantiles. For quantile range (0.35, 0.80), an increase in the anticipated unemployment rate leads to an increase in the stock market price. For the other quantiles the impact is statistically insignificant. Thus, an increase in the anticipated unemployment rate is in general good news for stock prices. Finally, we offer a reasonable explanation of why unemployment rate should affect stock prices and how it affects them. Using Fisher and Phillips curve equations, we show that high unemployment rate is followed by monetary policy action of Federal Reserve (Fed). When unemployment rate is high, the Fed decreases the interest rate, which in turn increases the stock market prices.
Estimation and inference in threshold type regime switching models
(2012-01) Gonzalo, Jesús; Pitarakis, Jean-Yves; Universidad Carlos III de Madrid. Departamento de Economía
Testing for structural stability in the whole sample
(2012-09) Hidalgo-Moreno, Javier; Seo, Myung Hwan; Universidad Carlos III de Madrid. Departamento de Economía
The paper examines a Lagrange Multiplier type test for the constancy of the parameter in general models with dependent data without imposing any artificial choice of the possible location of the break. In order to prove the asymptotic behaviour of the test, we extend a strong approximation result for partial sums of a sequence of random variables. We also present a Monte-Carlo experiment to examine the finite sample performance of the test and how it compares with tests which assume some knowledge of the possible location of the break.

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