|
on Payment Systems and Financial Technology |
| By: | Jarvis, Andy |
| Abstract: | In rural Nepal recently, lots of the smallholders I visited took selfies with me on their smartphones, sharing them on social media. Until recently, it was the other way around. It was an epiphany moment: if the tech revolution has now reached smallholders, the data revolution will surely follow. Yet the agriculture sector still lags behind in the data revolution. In the US, a recent report by McKinsey placed agriculture dead last out of 23 sectors that they analysed with respect to the extent to which they are harnessing the opportunities of ‘digitalisation’. The report argues that it is no coincidence that the sectors highest in terms of digitalisation are also showing the highest economic growth (such as finance and media). For the developing world, the picture is likely even worse. Mobile money in East Africa is transforming the finance sector, yet the farmer has very limited access to digital services that help him or her better manage crops and livestock. Agriculture in Africa is only touching the surface of digitalisation – markets are largely informal, extension is face-to-face, and farm data either non-existent or completely off grid. Many of the successes of digitalisation in agriculture have been riding on the shirt tails of mechanisation – sensors on tractors is where much of the innovation is today. It is the means to gather information, rapidly analyse and adjust management, whilst the Internet of Things means the data is getting transmitted and feeding the cloud with invaluable information to better tailor precision farming. Whilst this model may be very appropriate for commercial and mechanised largescale farming, it’s not readily transferrable to the 570 million smallholder farmers in the world. Alternative visions for digital agriculture are needed, and there are a number of game-changers in the mix right now. First, smartphone penetration and 3G networks are sweeping across rural areas, and this opens a wealth of opportunities to kick start the data ecosystem. They become the node for information exchange. Second, satellite images are on the cusp of becoming fit for purpose in agriculture. Their spatial resolution can finally detect meaningful patterns in the field, and the return periods are such that we can link satellite images potentially with activities in the field in nearer real time. And where satellites struggle, drones can often do the job at limited cost. And thirdly, our analytical capacity to make sense of the dirty data that agriculture tends to generate is now greatly enhanced. By combining multiple data streams, and analysing in new ways, we can now pick out some of the critical signals to spur better decisions in the agricultural sector, be it at field level or national policy decisions. Unfortunately, a number of key impediments are still holding back a democratic data revolution that reaches the marginalised smallholder farmer. Data itself is a barrier. You need some data to be able to say something useful; yet data on site-specific farming practices, socio-economic conditions of farmers, gender-related factors and others is often hard to come by. Better use of existing data is needed to start with – open data initiatives need to be strengthened, and C:/ drives need to be liberated. Another impediment is that many of the successes in developed countries are closely tied to private sector input supplies and machinery; yet in the smallholder context such services are in their infancy, and the reach of the private sector remains limited. And an alternative service provider, public extension, is likewise severely limited in reach, with just a tiny fraction of farmers having access. There is exciting innovation in some regions (e.g. the i-Hub in Nairobi) with a boon of private sector data-intelligence-related services providing farmers with data services, but few of these start-ups reach scale, and failure rates are too high. There is also a danger of poor-quality services proliferating and giving datadriven farming a bad name. Research can help develop better open access methods, APIs [resources used in programming] to additional high quality data layers, and thus support the emerging private sector to maintain high standards of quality. The enabling environment can also be improved – greater investment in data-related agricultural R&D is needed, and training needs to be improved to develop a new generation of agronomists who are fully data- and analytics-literate. With the building of greater capacity in people and their institutions, digital agriculture can be mainstreamed into extension programs and agricultural R&D, and contribute to a stronger private sector in data-related services to agriculture. At the CGIAR Platform for Big Data in Agriculture, we have identified four areas of work that are ripe for disruption, and we are currently calling for formation of novel partnerships that combine research and agricultural development to solve some of these intractable problems. These ‘Inspire Challenges’ provide the opportunity to receive US$100k grants to trial out risky approaches that: 1) reveal food systems, 2) monitor pests and diseases, 3) disrupt impact assessment, and 4) empower data-driven farming. We are tremendously excited about the prospects of ‘big data’ in agriculture. The lack of ‘digitalisation’ can only be seen as an enormous opportunity. The time is now to digitalise agriculture and democratise the benefits beyond those few with a tractor, and to explore different pathways that are inclusive of the 570 million smallholders who are producing 70% of global food supply. |
| Keywords: | International Development, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266638&r=pay |
| By: | Sukkarieh, Salah |
| Abstract: | For over 10 years the Australian Centre for Field Robotics (ACFR) at the University of Sydney has been developing novel mechatronic and software systems for the Australian agriculture industry. The aim is to support farmers with the research, development and commercialisation of digital tools that would help them increase yield and productivity and reduce input costs. In 2015 the ACFR received philanthropic funding to look at designing similar technology for smallholder farmers. The hypothesis is that with an appropriate education and training program coupled with low-cost on-farm mobile platforms and digital tools adapted from more precise technology, a system and methodology could be developed that delivers food and nutrition security and encourages next-generation growers to adopt digital agriculture techniques. These requirements led to the development of the Digital Farmhand. The Digital Farmhand comprises a small mobile platform that can be hand towed, remotely controlled, or set into autonomous mode. On the mobile platform exists a smartphone, sensors, and computing. Collectively the system can undertake precision seeding, spraying and weeding. Through the digital capability of monitoring and analysing individual plants the system has the potential to support better on-farm decision making, helping growers increase yield and productivity, reduce input costs, and maximise nutrition security. The Digital Farmhand has been trialled amongst small farm holders in Australia as well as in Indonesia and will be trialled next year in the Pacific Islands. The objective of these trials is to close in on the requirements that would meet the needs of those communities. |
| Keywords: | Farm Management, Production Economics, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266635&r=pay |
| By: | Cong, Lin William (U of Chicago); Li, Ye (Oh State U); Wang, Neng (Columbia U and China Academy of Financial Research) |
| Abstract: | We provide a dynamic asset-pricing model of (crypto-)tokens on (blockchain-based) platforms, and highlight their roles on endogenous user adoption. Tokens intermediate transactions on decentralized networks, and their trading creates an inter-temporal complementarity among users, generating a feedback loop between token valuation and platform adoption. Consequently, tokens capitalize future platform growth, accelerate adoption, and reduce user-base volatility. Equilibrium token price increases non-linearly in platform productivity, user heterogeneity, and endogenous network size. The model also produces explosive growth of user base after an initial period of dormant adoption, accompanied by a run-up of token price volatility. We further discuss how our framework can be used to discuss cryptocurrency supply, token competition, and pricing assets under network externality. |
| JEL: | C73 E42 F43 L86 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2018-15&r=pay |
| By: | Mude, Andrew |
| Abstract: | The International Livestock Research Institute (ILRI) together with its partners launched a pilot index-based livestock insurance (IBLI) product in January 2010 in the Marsabit District of northern Kenya. It has since been scaled across the drylands of Kenya, and is also gaining momentum in Ethiopia where a pilot insurance project was launched in 2012. One problem inspired ILRI’s IBLI agenda: finding a sustainable way to help pastoralists to recover quickly from the considerable losses they incur during severe droughts. Over the years, evidence of IBLI impact and value for money, and continued research and development on product design, as well as innovations along the service delivery chain, have helped with uptake, in convincing governments and development partners of its importance as a risk management tool, and have won IBLI a plethora of international awards.Briefly describing the key elements of the IBLI agenda, this presentation focuses on how the IBLI team leveraged a suite of digital technologies – largely mobile based – to help surmount some of the main obstacles to the provision of IBLI. Even in the sparsely populated drylands of northern Kenya, which the IBLI product targets, socioeconomic evolution has resulted in a growing density of mobile network coverage and a proliferation of mobile phone ownership, and use. Exploiting this trend, the IBLI team and partners have developed mobile applications for offline sales transactions and drastically reduced the cost and time to delivery of indemnity payments, as well as a whole host of other applications in information exchange and knowledge dissemination. |
| Keywords: | Agricultural Finance, Livestock Production/Industries |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266633&r=pay |
| By: | Bernhard Reinsberg; Centre for Business Research |
| Abstract: | Blockchain technology enables 'trustless' interactions among individuals by replacing centralised enforcement with distributed consensus. It therefore has been used for commercial applications, including transfer of cryptocurrency, digital file storage, digital identity services, and supply-chain management. This article probes the potential of blockchain technology to foster international cooperation among states - given the lack of a world government to enforce their mutual commitments. The article outlines four facilitators of blockchain-based global governance systems, including the need for credible commitment, the availability of resourceful non-state actors, verification needs that can be addressed through ‘oracles’, and routine interactions. These facilitators are further illustrated for the case of climate governance. Overall, the discussion suggests that blockchains - if appropriately designed to address the underlying cooperation problems - hold significant promise. Their key strength is to enable states to design ‘smart contracts’ that execute automatically when agreed conditions are fulfilled. To some extent, blockchain technology thus challenges the primacy of international organisations. However, even with blockchain technology, international organisations continue to play a role with regard to pre-agreement policy deliberation, validating real-world events, and providing technical assistance for policy implementation. |
| Keywords: | International Relations; trust; anarchy; cooperation; international organizations; Blockchain; Ethereum; smart contracts; decentralized governance |
| JEL: | F30 O19 O30 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp508&r=pay |
| By: | Bergvinson, David |
| Abstract: | Digital agriculture encompasses a value chain framework that supports smallholder farmers’ access to services, knowledge and markets. This helps to unlock the economic potential of agriculture, preserve natural resources and accelerate equitable economic growth in rural communities. Digital agriculture is already the nerve centre for modern food systems. It enables democratisation of information and distillation of big data analytics to provide timely and targeted insight for farmers, input suppliers, aggregators, processors and consumers. These insights are now delivered to the location of a decision (e.g. a farmer’s field on a smart phone) on how to optimise profitability, increase value chain efficiency and support consumer awareness on food and its impact on their nutrition, the rural economy and the environmental footprint of agriculture. Digital tools have the potential to compress value chains and reduce transaction costs, thus moving more value to the farmers’ end for improving incomes and livelihoods. Through ‘big data’ and systems biology, the nutritional quality of crops can be improved by gaining a deeper understanding of the interaction of food, nutrition and human health. Spatial Data Infrastructure combined with unique digital identification can support an ecosystem of integrated services to better serve the needs of farmers – whether it be access to inputs, credit, insurance or markets. Downscaled observed weather data are critically important to support all actors along the value chain, given that agriculture is a solar- and water- driven industry. Maintaining the trust of farmers and consumers is vitally important, so policies to manage personal identification information are essential. However, data also needs to be granular to support precision agriculture practices. An ecosystem of different tools and platforms supported by pragmatic and visionary policies and institutions will position countries to uniquely unlock the power of digital technology to accelerate agricultural development and ultimately enable us to deliver on the Sustainable Development Goals – one country at a time. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266625&r=pay |
| By: | Jaehyung Lee; Minhyung Cho |
| Abstract: | Price stability has often been cited as a key reason that cryptocurrencies have not gained widespread adoption as a medium of exchange and continue to prove incapable of powering the economy of decentralized applications (DApps) efficiently. Exeum proposes a novel method to provide price stable digital tokens whose values are pegged to real world assets, serving as a bridge between the real world and the decentralized economy. Pegged tokens issued by Exeum - for example, USDE refers to a stable token issued by the system whose value is pegged to USD - are backed by virtual assets in a virtual asset exchange where users can deposit the base token of the system and take long or short positions. Guaranteeing the stability of the pegged tokens boils down to the problem of maintaining the peg of the virtual assets to real world assets, and the main mechanism used by Exeum is controlling the swap rate of assets. If the swap rate is fully controlled by the system, arbitrageurs can be incentivized enough to restore a broken peg; Exeum distributes statistical arbitrage trading software to decentralize this type of market making activity. The last major component of the system is a central bank equivalent that determines the long term interest rate of the base token, pays interest on the deposit by inflating the supply if necessary, and removes the need for stability fees on pegged tokens, improving their usability. To the best of our knowledge, Exeum is the first to propose a truly decentralized method for developing a stablecoin that enables 1:1 value conversion between the base token and pegged assets, completely removing the mismatch between supply and demand. In this paper, we will also discuss its applications, such as improving staking based DApp token models, price stable gas fees, pegging to an index of DApp tokens, and performing cross-chain asset transfer of legacy crypto assets. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1808.03482&r=pay |
| By: | Yukun Liu; Aleh Tsyvinski |
| Abstract: | We establish that the risk-return tradeoff of cryptocurrencies (Bitcoin, Ripple, and Ethereum) is distinct from those of stocks, currencies, and precious metals. Cryptocurrencies have no exposure to most common stock market and macroeconomic factors. They also have no exposure to the returns of currencies and commodities. In contrast, we show that the cryptocurrency returns can be predicted by factors which are specific to cryptocurrency markets. Specifically, we determine that there is a strong time-series momentum effect and that proxies for investor attention strongly forecast cryptocurrency returns. Finally, we create an index of exposures to cryptocurrencies of 354 industries in the US and 137 industries in China. |
| JEL: | G12 G32 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24877&r=pay |
| By: | Sabrina T. Howell; Marina Niessner; David Yermack |
| Abstract: | Initial coin offerings (ICOs) are sales of blockchain-based digital tokens associated with specific platforms or assets. Since 2014 ICOs have emerged as a new financing instrument, with some parallels to IPOs, venture capital, and pre-sale crowdfunding. We examine the relationship between issuer characteristics and measures of success, with a focus on liquidity, using 453 ICOs that collectively raise $5.7 billion. We also employ propriety transaction data in a case study of Filecoin, one of the most successful ICOs. We find that liquidity and trading volume are higher when issuers offer voluntary disclosure, credibly commit to the project, and signal quality. |
| JEL: | G24 G32 K22 L26 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24774&r=pay |
| By: | Guo, Hongdong; Li, Xiaokang; Zeng, Yiwu; Jin, Songqing |
| Abstract: | The revolution of information technology and communications has drastically changed the way people conduct business. With the rapid emergence of Taobao villages and other e-trading platforms in its rural areas, China is leading the developing world in rural e-commerce. Despite the potential of e-commerce to improve agriculture profits and farmer’s income, whether and to what extent farmers really benefit from it remains a question. Using household survey data from farmers selling products through e-trading platform and those selling products through traditional market channel, we aim to rigorously assess the effects of e-commerce adoption on farmer’s income and identify the key mechanisms through which the impact comes about. Propensity score matching (PSM) methods were adopted to deal with the fact that farmers’ participation in selling products through e-commerce is not random. The PSM results show that the adoption of e-commerce has a positive effect on farmers’ income, especially in the villages with more e-commerce adoption. And the increase in the profit margin and the growth of sales are the two main channels through which e-commerce impacts farmers’ income. |
| Keywords: | Agricultural Finance, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa18:266298&r=pay |
| By: | Angelo Bonomi (CNR-IRCRES, National Research Council, Research Institute on Sustainable Economic Growth, via Real Collegio 30, Moncalieri (TO) – Italy) |
| Abstract: | This paper concerns a study on the next production revolution called Industry 4.0 based on confluence of various technologies, mainly digital, with far reaching consequences especially for productivity and employment. This study considers the implementation of Industry 4.0 in SMEs and industrial districts that represent a great part of Italian industry. The latter represents certainly a major challenge to such implementation because of the existence of various obstacles constituted by availability of investment capitals, small scale productions and tendency to develop and to adopt only incremental innovations rather than radical ones typical of Industry 4.0. In this work we study the technologies involved in Industry 4.0, taking account of existence of specific technologies, called enabling technologies, whose confluence in the manufacturing industry determines the implementation of Industry 4.0. Such enabling technologies originate from the major fields of R&D activities such as nanotechnologies, biotechnologies, digital technologies and artificial intelligence (AI). In this paper we study the dynamic and possible evolution characterizing the formation of the various enabling technologies in a sort of ramification process, using specific models of technology, technology innovation and R&D, and their relation with manufacturing in SMEs and industrial districts. The results of the study underlines the importance of AI in determining possibilities and limits to Industry 4.0, the necessity to disrupt the tendency of SMEs in adopting only incremental innovations, the existence of “intranality effects” raising difficulties from the supply chain, and the importance of technology consulting firms in the integration of ICT in operating technologies of a manufacturing activity. |
| Keywords: | Industry 4.0, SMEs, industrial districts, technology innovation |
| JEL: | O14 O25 O33 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:csc:ircrwp:201804&r=pay |
| By: | Shweta Saini, Sameedh Sharma, Ashok Gulati, Siraj Hussain and Joachim von Braun |
| Abstract: | The Indian Government has identified a unique opportunity in using Information and Communication Technology (ICT) based solutions to streamline its inefficient, ineffective, and expensive subsidy operations. By bringing all subsidies, mainly food and fertilizer subsidy, under the ICT platform, the government aims to make its subsidy operations and delivery mechanisms- transparent, efficient, and effective. Food subsidy is the largest component of government’s subsidy bill and is focus of the paper. Authors evaluate the possibility of substituting the existing system of subsidized grain distribution, i.e. Public Distribution System (PDS) with ICT-based Direct Benefit Transfer (DBT) system. Implementing DBT for food will imply substitution of the existing physical grain entitlement system under PDS/NFSA with a cash transfer made directly into the bank accounts of the beneficiaries. The ongoing policy discussions and strategies for executing DBT-food in India are observed to be prescriptive in nature and suffer, inter alia, on two accounts. One, they view the transition of states from existing PDS to ICT based DBT food as one-disruptive change rather than as an incremental process that contributes to making a system gradually ready for the big transition. Two, by prescribing a uniform timeline for implementation in all the 36 Indian states and Union Territories (UTs), policy makers fail to acknowledge the diverse economic, social, and financial vulnerabilities in different parts of country. The paper attempts to address this gap in political thinking and strategy formulation and present a case for a phased approach to roll out DBT in the Indian food sector. It proposes a scientific way of evaluating a state/UT’s “readiness” for shifting from PDS to DBT in food. The “readiness” analysis involves studying a state’s performance on three parameters: their demographics, performance of existing PDS and the current state of their banking infrastructure. Identification of these parameters draws on learning from national and international experiences in DBT for food, in particular that of Chandigarh and Puducherry (where it is completely rolled-out) that are detailed in the paper’s first part. The analysis reveals that in the next five years i.e. by 2022, all Indian states and UTs can replace their existing PDS with DBT-food. We divide the 36 states/UTs into four Phases. The states that are most ready for DBT transition (Phase 1) are Punjab, Goa, Delhi, Daman and Diu, Chandigarh and Puducherry and they may make this shift in the next one year i.e. by 2018. In the second phase are six states- Haryana, Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Kerala- who may transition to DBT by 2019. States with a very high share of nation’s poor and malnourished and/or have high banking infrastructural deficits, are put into the Phase 3 and these 11 states are Madhya Pradesh, Chhattisgarh, Rajasthan, Jharkhand, Bihar, Odisha, Uttar Pradesh, West Bengal, Dadra & Nagar Haveli, Maharashtra and Gujarat. These states may take about three and half years (i.e. by 2021) for implementing DBT-food. The last phase comprises of 13 states (Arunachal Pradesh, Assam, HP, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand, A&N Islands and Lakshwadeep) that have been given a special category status by Union Government and the erstwhile Planning Commission. These 13 states have a low population density, or are geographically located in remote areas, and/or are socio-politically and economically sensitive areas. The states in Phase 3, 4, and 5 are given more time before they implement DBT-food so that they address their existing infrastructural deficits. For these states, the paper proposes an interim phase consisting of a reformed PDS employing IT solution for identity verification of beneficiaries. For cities, towns, urbanised areas in states in the last three Phases whose performance on the three parameters is better than their respective states, the paper proposes a hybrid approach whereby they can shift more quickly to DBT even as the rest of the State puts in place the PDS reform package. Overall, a phased approach with PDS reforms, maximum digitization and use of ICT and JanDhan-Aadhaar-Mobile (JAM) technologies and a secure criteria-based preparation for a shift to DBT in food is proposed in the paper. In order to make the transition from PDS to DBT-food successful, specific policy recommendations are made in the paper. Some of these recommendations are: 1. Open market grain availability: This will make or break the transition. Unless the Centre and the states ensure availability of enough food grains in the open market, the transition to DBT food is unlikely to be successful; 2. Inclusive financial integration: Even if we have adequate availability of food grains in the open market, if the banking infrastructure is not inclusive, DBT food will not deliver. Thus, simultaneous efforts are required to increase the number of bank branches, ATMs and BCs. There is a need to include Post offices, cooperative banks and even large PACS (which currently are not part of the core banking system) into this system; 3. Innovations in payment channels: Apart from vertical expansion of the banking network, we also recommend horizontal expansion of payment channels; 4. Hedge farmers’ market risks: As a consequence of DBT food when the MSP procurement operations are scaled-down, the Centre and states should together work towards creating and facilitating deep and wide alternative markets for farmers to sell their surplus food grains; a. Provision of an unconditional cash transfer to the farmer: The government may also consider, in the longer run, substituting the existing input subsidy support for agriculture (including fertiliser subsidy) and output price support to farmers with a cash transfer made directly into the farmers’ bank accounts; 5. Introduction of policies to complement the system: In order to avoid diversion of the transferred cash towards vices, government should ensure that the entire economic system grows up to meet the increased demand that is likely to result from greater disposable incomes with a household. In particular, there is a need to ensure commensurate increase and stable supply of high-value food, education and healthcare services; 6. Adequacy of the food subsidy amount: If instead of MSP in the food subsidy formula (1.25*MSP – CIP), we can have the Economic cost, then the current problem of “inadequacy” of the food subsidy transfer amount, faced in Chandigarh and Puducherry, may be resolved; and 7. Leadership and political will: Political motivation in the States to implement the DBT or reforms in the PDS is a vital factor determining the future of PDS reforms. Overall, DBT has the potential to make way for a system of social security or universal basic income, a special income support- provided to every citizen- whose size can be adjusted to his or her needs and vulnerability. Although the concept of basic income is still at its infancy even in the most developed countries, the path to creating such a system has to be through the DBT. Notwithstanding initial problems in implementation and the problems of labour markets that DBT may trigger, a cash transfer systems has become a potent tool in the government’s armoury of social welfare. As the country transitions from its low income position to becoming the world’s fastest growing economy in a few years, a cash transfer system delivering a social security transfer to all can promote a growth process that is inclusive, efficient and sustainable. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:261791&r=pay |
| By: | Asongu, Simplice; Boateng, Agyenim |
| Abstract: | The primary objective of this special issue is to showcase high-quality interdisciplinary research in the field of mobile phone technology and inclusive economic development, with a view to inspire and educate readers and policy makers on the vital role of mobile phones in economic development in Africa. We hope that the articles in this special issue will encourage academics and policy makers to carry out more research on the challenges and opportunities mobile phone technology offers in our quest to develop our communities. |
| Keywords: | Mobile phones; inclusive human development; Africa |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88528&r=pay |
| By: | Giacomo De Giorgi (GSEM University of Geneva) |
| Abstract: | In this paper we study consumption network e¤ects. Does the consumption of our peers a¤ect our own consumption? How large is such e¤ect? What are the economic mechanisms behind it? We use long panel data on the entire Danish population to construct a measure of consumption based on administrative tax records on income and assets. We combine tax record data with matched employer-employee data so that we can construct peer groups based on workplace, which gives us a much tighter, precise, and credible de nition of networks than used in previous literature. We use the available data to construct peer groups that do not perfectly overlap, and as such provide valid instruments derived from the network structure of ones peers group. The longitudinal nature of our data also allow us to estimate xed e¤ects models, which help us tackle reection, self-selection, and common-shocks issues all at once. We estimate non-negligible and statistically signi cant endogenous and exogenous peer e¤ects. Estimated e¤ects are quite relevant for policies as they generate non-negligible multiplier e¤ect. We also investigate what mechanisms generate such e¤ects, distinguishing between "keeping up with the Joneses", a status model, and a more traditional risk sharing view. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:692&r=pay |
| By: | Theresa Kuchler (NYU Stern School of Business); Arlene Wong (Princeton University); Johannes Stroebel (New York University) |
| Abstract: | To what extend do friendship links affect the adoption of new products? We first combine social network data with individual choices on the adoption of the newly introduced Google Pixel phone to estimate the effects of friends’ adoption of a new product on individual purchasing decisions. We use the exclusive introduction of the Pixel by Verizon combined with differences in Verizon market share across the US to instrument for friends’ initial adoption of the phone. Next, we analyze the role of county level connections on the adoption of a wide variety of products in stores across US counties. Counties that are more connected socially adopt new products at similar times. We explore whether consumers in more socially connected counties have access to a more new products and a wider variety of products and the implications of such consumption externalities on consumer welfare. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:1001&r=pay |
| By: | Masafumi Nakano (Graduate School of Economics, University of Tokyo); Akihiko Takahashi (Graduate School of Economics, University of Tokyo); Soichiro Takahashi (Graduate School of Economics, University of Tokyo) |
| Abstract: | This paper explores Bitcoin intraday technical trading based on artificial neural networks for the return prediction. In particular, our deep learning method successfully discovers trading signals through a seven layered neural network structure for given input data of technical indicators, which are calculated by the past time-series data over every 15 minutes. Under feasible settings of execution costs, the numerical experiments demonstrate that our approach significantly improves the performance of a buy-and-hold strategy. Especially, our model performs well for a challenging period from December 2017 to January 2018, during which Bitcoin suffers from substantial minus returns. Furthermore, various sensitivity analysis is implemented for the change of the number of layers, activation functions, input data and output classification to confirm the robustness of our approach. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cfi:fseres:cf441&r=pay |
| By: | Bernhard Reinsberg; Centre for Business Research |
| Abstract: | Blockchain technology has been considered a vehicle to foster development in poor countries by promoting applications such as secure delivery of humanitarian aid, digital identity services, and proof of provenance. This article examines whether (and if so how) blockchain technology - if appropriately designed- can enhance the effectiveness (and efficiency) of foreign aid governance, thereby moving beyond completely anonymous contexts. Foreign aid governance is plagued by lack of credible commitments among states which are further exacerbated by information asymmetries and which often undermine aid effectiveness. In this context, blockchain technology holds two promises. First, through guaranteed enforcement of smart contracts, it can strengthen the credibility of state commitments, for example collective burden-sharing rules among a group of donors or recipient-country compliance with policy conditionality in return for aid. Second, through leveraging prediction markets, blockchain technology can allay information problems related to the verification of real-world events along the entire aid delivery chain. Overall, the article shows that blockchain technology can be understood as a mechanism with institution-like features, with significant potential to complement real-existing institutions. The article also suggests that deploying blockchain technology in semi-trusted environments and at the international level avoids many of its well-known disadvantages. |
| Keywords: | Foreign aid, Blockchain, Ethereum, smart contracts, international organizations, World Bank, New Institutional Economics |
| JEL: | F30 O19 O30 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp505&r=pay |
| By: | Simon Deakin; Christopher Markou; Centre for Business Research |
| Abstract: | Features of the 'fourth industrial revolution', such as platforms, AI and machine learning, pose challenges for the application of regulatory rules, in the area of labour law as elsewhere. However, today's digital technologies have their origins in earlier phases of industrialisation, and do not, in themselves, mark a step change in the evolution of capitalism, which was, and is, characterised by successive waves of creative destruction. The law does not simply respond to technological change; it also facilitates and mediates it. Digitalisation, by permitting the appropriation of collective knowledge, has the capacity to undermine existing forms of regulation, while creating the space for new ones. It may erode the position of some professions while enabling others, complementary to new technologies, to emerge. It is unlikely to bring about the redundancy of forms of labour law regulation centred on the employment relationship. We appear to reaching a point in the law-technology cycle where push-back against regulatory arbitrage can be expected. |
| Keywords: | gig economy, digitalisation, future of work, labour law, law and technology, Uber |
| JEL: | J41 J48 K31 L22 O33 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp504&r=pay |
| By: | Matheus R. Grasselli; Alexander Lipton |
| Abstract: | We argue that a negative interest rate policy (NIRP) can be an effect tool for macroeconomic stabilization. We first discuss how implementing negative rates on reserves held at a central bank does not pose any theoretical difficulty, with a reduction in rates operating in exactly the same way when rates are positive or negative, and show that this is compatible with an endogenous money point of view. We then propose a simplified stock-flow consistent macroeconomic model where rates are allowed to become arbitrarily negative and present simulation evidence for their stabilizing effects. In practice, the existence of physical cash imposes a lower bound for interest rates, which in our view is the main reason for the lack of effectiveness of negative interest rates in the countries that adopted them as part of their monetary policy. We conclude by discussing alternative ways to overcome this lower bound , in particular the use of central bank digital currencies. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1808.07909&r=pay |
| By: | Grupp, Tillmann |
| Abstract: | Over the past few years, across many industrial sectors, Information Systems (IS) developed with the help of agile methods have become the rule rather than the exception. Because of their high flexibility, such Agile IS development methodologies help firms to keep pace with emerging market requirements. At the same time, customers are also gaining increasing market power due to an expanding digitalization of services and products, which decreases switching barriers and increases transparency. As a result, it has become crucial for firms to develop IS that continuously provide sufficient value to customers. This is one of the main reasons why firms regularly deliver increments of Agile IS for users to update outdated software versions. By doing so, firms try to bind and engage customers lastingly to capture current and future revenue streams and stay competitive. Agile IS and software updates (that deliver increments of Agile IS to users) have been researched thoroughly, however mostly from a technical point of view. Nevertheless, because updates change a system while it is already in use, they have the potential to impact users’ beliefs, attitudes, behaviors, and in particular, loyalty to a software in the post-adoption phase. However, despite the importance of better understanding user responses to Agile IS to provide an adequate theoretical framework, research from a user’s perspective on Agile IS, and especially software updates, is still scarce. Against this backdrop, this thesis presents four empirical studies that were conducted to investigate whether and how Agile IS affect users’ loyalty to IS, to identify potential moderators, and to understand how Agile IS should be designed to facilitate potential positive effects. In these studies, increments of Agile IS are operationalized as software updates and customer loyalty as a user’s continuance intention with a system. By drawing on the IS Continuance Model in a scenario-based online experiment, the first two studies reveal empirically how Agile IS have the potential to increase user continuance intentions. Users of Agile IS show greater IS continuance intentions, despite that some functionality is provided only later on, as compared to a consistently feature-complete traditional IS. This effect is diminished somewhat when the software is introduced with an extensive feature set right from the beginning. Nevertheless, the size of an update does not seem to play a significant role. The second study reveals that this positive effect of updates only emerges if the user is not very knowledgeable regarding the software, because experts in contrast to novices seem to devalue Agile IS (their continuance intentions decrease with Agile IS in comparison to traditional IS). Additionally, the second study shows that the removal of features through updates reduces continuance intentions even more than the equivalent addition of features when considering the absolute magnitude of change. With empirical data from a laboratory experiment, the third study identifies update frequency and update type as further moderators of the effect, and confirms the hypothesized mediation mechanism presumed by the IS Continuance Model. The fourth study examines the role of update delivery strategies, i.e., the timing and presence of a notification and an installation choice. In this study, feature and security updates are distinguished, as both seem to have different characteristics with respect to the delivery strategy (i.e., users ‘need’ security but ‘want’ to add functionality). The findings show that both update types should be announced to users, in the case of a security update, only after successful installation, while presenting an installation choice to users prevents any positive effect for all types of updates. Overall, this thesis highlights the importance of understanding Agile IS and software updates from the user’s perspective. First, the results show that Agile IS have the potential to affect user’s continuance intentions, thereby contributing to a comprehensive theoretical foundation on Agile IS. Also the findings put the user more at the center of investigations in IS. Second, the empirical findings provide evidence in support of a necessary fine-grained understanding of IT Artifacts as malleable compositions of specific features and characteristics. This answers the call of several researchers to put the IT Artifact more at the focus of IS research (Benbasat and Zmud 2003). Third, the results reveal that changes in IS might change users’ attitudes and behaviors over time, which extends the predominant view of IS in post-adoption literature from a mostly static to a more dynamic perspective. With this finding, we answer the call of several IS scholars to consider the evolution of IS more thoroughly (e.g., Jasperson et al. 2005; Benbasat and Barki 2007). For practitioners, the findings of this thesis provide empirically backed rationales to inform management decisions concerning the deployment of Agile IS and offer guidance on strategic or design considerations. Overall, the results show how and when the value provided by IS from a user’s perspective may be increased by the deployment of Agile IS and software updates. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:106939&r=pay |
| By: | Higgins, Stuart |
| Abstract: | This presentation explores the deployment of mobile acquired data (MAD) via tablet-based apps in research for development initiatives. It assesses pros, cons and unexpected consequences in the field, for both researchers and smallholder farmers, using the ACIARfunded, University of Queensland Vanuatu Beef Project as a case study. In 2015, ACIAR sought to understand the potential benefits – intended and unintended – that mobile acquired data (apps on tablets) might deliver to its funded projects. In pursuit of this, AgImpact (an R4D company) was commissioned to design and manage a small research activity which reviewed nearly 20 ‘off the shelf’ apps, then conducted three weeks of field testing in Indonesia surveying beef producers, in partnership with the University of Udayana. The researchers concluded that the use of apps for in-field research has significant potential to improve relationships between researchers and smallholder farmers by improving two-way information exchange in near real time. Some of the key findings were: (i) survey times were reduced by approximately 53%; (ii) 93% of farmers found the use of apps informative when research results were provided to them in near real time; (iii) 73% of farmers found the overall survey experience using apps to be positive. By mid-2016, the research activity had gained momentum and evolved into the ACIAR Mobile Acquired Data (MAD) research series, now involving nine ACIAR projects adopting apps in research for the first time. An exemplar project led by the University of Queensland, ‘Increasing the productivity and market options of smallholder beef cattle farmers in Vanuatu’, designed and built apps featuring auto-calculation functions, look-up tables and case histories, to track changes in cattle production performance and cattle prices for individual animals in real time. |
| Keywords: | Livestock Production/Industries, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266627&r=pay |
| By: | Xiang Hui; Maryam Saeedi; Giancarlo Spagnolo; Steven Tadelis |
| Abstract: | Markets with asymmetric information will often employ third-party certification labels to distinguish between higher and lower quality transactions, yet little is known about the effects of certification policies on the evolution of markets. How does the stringency in quality certification affect the intensity and composition of entry, incumbents' reactions, and market outcomes? We use detailed administrative data and exploit a policy change on eBay to explore how a more selective certification policy affects entry and behavior across a rich set of online market segments. We find that after the policy change, entry increases and does so more intensely in markets where it is harder to become certified. The average quality of entrants also increases more in the more affected markets, while the quality distribution of entrants exhibits fatter tails ex post. Finally, some incumbents increase the quality of their service to maintain certification and deliver higher quality after the policy change. The results help inform the design of certification policies in electronic and other markets with asymmetric information. |
| JEL: | D82 L15 L86 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24916&r=pay |
| By: | Jorge Faleiro; Edward Tsang |
| Abstract: | Modern investigation in economics and in other sciences requires the ability to store, share, and replicate results and methods of experiments that are often multidisciplinary and yield a massive amount of data. Given the increasing complexity and growing interaction across diverse bodies of knowledge it is becoming imperative to define a platform to properly support collaborative research and track origin, accuracy and use of data. This paper starts by defining a set of methods leveraging scientific principles and advocating the importance of those methods in multidisciplinary, computer intensive fields like computational finance. The next part of this paper defines a class of systems called scientific support systems, vis-a-vis usages in other research fields such as bioinformatics, physics and engineering. We outline a basic set of fundamental concepts, and list our goals and motivation for leveraging such systems to enable large-scale investigation, "crowd powered science", in economics. The core of this paper provides an outline of FRACTI in five steps. First we present definitions related to scientific support systems intrinsic to finance and describe common characteristics of financial use cases. The second step concentrates on what can be exchanged through the definition of shareable entities called contributions. The third step is the description of a classification system for building blocks of the conceptual framework, called facets. The fourth step introduces the meta-model that will enable provenance tracking and representation of data fragments and simulation. Finally we describe intended cases of use to highlight main strengths of FRACTI: application of the scientific method for investigation in computational finance, large-scale collaboration and simulation. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1808.07959&r=pay |
| By: | Laperriere, Andre |
| Abstract: | For many years ‘big data’ has been considered by many as the privilege of the few. Because of its volume, it could only be handled by large corporations, essentially based in the west; because of its complexity, it required high level specialists to manage it, and because of the cost of putting it together, it rested out of reach of the common person’s purse. This has changed. During this lifetime, the world has gone through three consecutive and very fundamental revolutions. The first was the Internet connecting the world together. The second was the emergence of intelligent devices, starting with mobile phones, bringing knowledge to your fingertips. The third revolution is here: open data. Knowledge can now flow across the world with accuracy, at a speed and volume never reached before. The world of agriculture is one of the key beneficiaries of this latest revolution, seeing for the first time the innovative benefits of a true ‘cooperative development process’ taking place. Governments are opening their data; research is working hand in hand with the private sector; and civil society – consumers and farmers alike – is voicing its needs and triggering innovation tailored to its capacity, situation and choices. As a result, even in the most remote areas today you can see applications using the latest technology – and ‘big data’ – in the hands of farmers and in a form and shape that makes sense for them. Applications are affordable and manageable, allowing their users to gradually overcome subsistence farming to reach a higher quality of life. Globally this means that continents where agriculture is still the key development engine see their economy improving, hunger decreasing and innovation flourishing. This is what will lead the world to overcome the emerging food security challenges ahead of us, and contribute greatly to allow developing countries to reach their full potential. This presentation describes this process and gives concrete examples of where and how ‘big data’ is now used by small farmers; and more generally, how open data is changing the face of global agriculture. |
| Keywords: | Farm Management, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266620&r=pay |
| By: | James A. Liu |
| Abstract: | The atomic swap protocol allows for the exchange of cryptocurrencies on different blockchains without the need to trust a third-party. However, market participants who desire to hold derivative assets such as options or futures would also benefit from trustless exchange. In this paper I propose the atomic swaption, which extends the atomic swap to allow for such exchanges. Crucially, atomic swaptions do not require the use of oracles. I also introduce the margin contract, which provides the ability to create leveraged and short positions. Lastly, I discuss how atomic swaptions may be routed on the Lightning Network. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1807.08644&r=pay |
| By: | Andrei Levchenko (University of Michigan); Nitya Pandalai Nayar (University of Texas, Austin) |
| Abstract: | This paper examines the role of both technology and non-technology shocks in international business cycle comovement. Using industry-level data on 30 countries and up to 28 years, we first provide estimates of utilization-adjusted TFP shocks, and an approach to infer non-technology shocks. We then set up a quantitative model calibrated to the observed international input-output and final goods trade, and use it to assess the contribution of both technology and non-technology shocks to international comovement. We show that unlike the traditional Solow residual, the utilization-adjusted TFP shocks are virtually uncorrelated across countries. Transmission of TFP shocks across countries also cannot generate noticeable comovement in GDP in our sample of countries. By contrast, non-technology shocks are highly correlated across countries, and the model simulation with only non-technology shocks generates substantial GDP correlations. We conclude that in order to understand international comovement, it is essential to both model and measure non-TFP shocks. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:449&r=pay |
| By: | Mathews, Steve |
| Abstract: | ‘Big data’ has great unrealised potential in most parts of the agricultural value-chain. We can divide that data up into several categories, each with its own good and bad points. Starting in 1972, the US Landsat program collected the original ‘big data’, but capability to perform meaningful analysis of the photos remained very expensive until recently. Other flows have begun in the past few decades, from private satellites, point-of-sale systems, land-based sensors, and aerial drones. Unlike Landsat, the various newer sources have different ownership statuses. Globally, most smallholders don’t generate the revenue to pay for any of the various proprietary data sources or analysis. But we see significant value in the application of machine learning/’big data’ techniques to publicly available satellite and other sources. Advances in information technology allow us to disseminate good-quality yield, drought, and other analyses at a much lower cost than previously. As a result, relatively small external contributions can bring the established benefits of modern modelling expertise to a hugely broader and more diverse audience. |
| Keywords: | Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cfcp17:266622&r=pay |
| By: | Moritz Lenel (University of Chicago); Martin Schneider (Stanford University); Monika Piazzesi (Stanford University) |
| Abstract: | The payment intermediary share is the share of fixed income claims held by financial intermediaries with money-like liabilities. It is higher in times of higher risk premia, such as during the 1970s and in recent recessions. This paper proposes a model of a modern monetary economy that accounts for the valuation of fixed income claims as well as their allocation inside vs outside the payment intermediaries. While all assets are valued for their risk and return properties, those held inside payment intermediaries are also valued as collateral that backs inside money. The payment-intermediary share depends on the transactions demand for inside money as well as portfolio responses to uncertainty shocks. It determines the quantitative impact of monetary policy and macro-prudential regulation on asset prices. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:1257&r=pay |