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on Utility Models and Prospect Theories |
| By: | Peter Bossaerts; William R. Zame |
| Date: | 2006–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:122247000000001317&r=upt |
| By: | J. H. Nilsen; R. Rovelli |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:380&r=upt |
| By: | Mary C. Daly; Daniel J. Wilson |
| Abstract: | This paper empirically assesses the theory of interpersonal income comparison using a unique data set on suicide deaths in the United States. We treat suicide as a choice variable, conditional on exogenous risk factors, reflecting one's assessment of current and expected future utility. Using this framework we examine whether differences in group-specific suicide rates are systematically related to income dispersion, controlling for socio-demographic characteristics and income level. The results strongly support the notion that individuals consider relative income in addition to absolute income when evaluating their own utility. Importantly, the findings suggest that relative income affects utility in a two-sided manner, meaning that individuals care about the incomes of those above them (the Joneses) and those below them (the Smiths). Our results complement and extend those from studies using subjective survey data or data from controlled experiments. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2006-12&r=upt |
| By: | Joachim Merz (University of Lueneburg and IZA Bonn); Lars Osberg (Dalhousie University) |
| Abstract: | This paper argues that public holidays facilitate the co-ordination of leisure time but do not constrain the annual amount of leisure. Public holidays therefore have benefits both in the utility of leisure on holidays and (by enabling people to maintain social contacts more easily) in increasing the utility of leisure on normal weekdays and weekends. The paper uses the variation (13 to 17) in public holidays across German Länder and the German Time Use Survey of 2001-02 to show that public holidays have beneficial impacts on social life on normal weekdays and weekends. Since these benefits are additional to the other benefits of holidays, it suggests that there is a case to be made for more public holidays. |
| Keywords: | public holidays, social contacts, social leisure time, time allocation, time use diaries, German Time Budget Survey 2001/02 |
| JEL: | J22 I31 Z13 H40 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2089&r=upt |
| By: | Oh, Inha; Lee, Jeong-Dong (Seoul National University); Hwang, Seogwon; Heshmati, Almas (Ratio) |
| Abstract: | A product is called technically inefficient when it has higher price and/or lower quality than others. Technical inefficiency of product has been conceptualized since Lancaster (1966), and empirically measured by many researchers, for example, Fernandez-Castro and Smith (2002) and Lee et al. (2005) among others. If we know further the information about structure of utility function, allocative inefficiency can also be measured. Even though a product is technically efficient with highest quality together with lowest price, it could not be chosen in the market, if it cannot match the preference structure of consumers, i.e. it is allocatively inefficient. This study poses a conceptual and methodological framework to measure technical and allocative efficiency at the product level considering consumer’s choice, which comprises the overall efficiency. Empirically we combine Data Envelopment Analysis (DEA) and discrete choice model to measure the level of inefficiencies. The suggested framework is applied to the Korean automobile market. The relationship between the level of efficiency and market performance in terms of market share is discussed. |
| Keywords: | DEA; Product Efficiency; Consumers Utility; Automobile Market; Korea |
| JEL: | C14 C25 D13 D61 L92 |
| Date: | 2006–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0095&r=upt |
| By: | Csóka Péter; Herings P. Jean-Jacques; Kóczy László Á. (METEOR) |
| Abstract: | Coherent measures of risk defined by the axioms of monotonicity, subadditivity, positive homogeneity, and translation invariance are recent tools in risk management to assess the amount of risk agents are exposed to. If they also satisfy law invariance and comonotonic additivity, then we get a subclass of them: spectral measures of risk. Expected shortfall is a well-known spectral measure of risk is. We investigate the above mentioned six axioms using tools from general equilibrium (GE) theory. Coherent and spectral measures of risk are compared to the natural measure of risk derived from an exchange economy model, that we call GE measure of risk. We prove that GE measures of risk are coherent measures of risk.We also show that spectral measures of risk can be represented by GE measures of risk only under stringent conditions, since spectral measures of risk do not take the regulated entity’s relation to the market portfolio into account. To give more insights, we characterize the set of GE measures of risk. |
| Keywords: | microeconomics ; |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2006015&r=upt |