Template-Type: ReDIF-Paper 1.0 Author-Name: Niven Winchester Author-Name-First: Niven Author-Name-Last: Winchester Author-Email: niven.winchester@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Shifting the 'goal posts': What is the optimal allocation of Super Rugby competition points? Abstract: Competition points are awarded in sports events to determine which participants qualify for the playoffs or to identify the champion. We use competition points to measure strength in a prediction model and choose competition points to maximise prediction accuracy. This allows us to determine the allocation of competition points that most appropriately rewards strong teams. Our analysis focuses on Super Rugby as the characteristics of this competition closely match our modelling assumptions. We find that the current allocation of competition points is not optimal and suggest an alternative. Our findings have implications for other competitions. Length: 31 pages Creation-Date: 2007-11 Revision-Date: 2007-11 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0715.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0715 Keywords: Competition points; Nonlinear least squares; Sports predictions Handle: RePEc:otg:wpaper:0715 Template-Type: ReDIF-Paper 1.0 Author-Name: W Robert J Alexander Author-Name-First: W Robert J Author-Name-Last: Alexander Author-Email: ralexander@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Alfred A. Haug Author-Name-First: Alfred A. Author-Name-Last: Haug Author-Email: alfred.haug@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Mohammad Jaforullah Author-Name-First: Mohammad Author-Name-Last: Jaforullah Author-Email: mjaforullah@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: A two-stage double-bootstrap data envelopment analysis of efficiency differences of New Zealand secondary schools Abstract: We conduct a two-stage (DEA and regression) analysis of the efficiency of New Zealand secondary schools. Unlike previous applications of two-stage semi-parametric modelling of the school Òproduction processÓ, we use Simar and WilsonÕs double bootstrap procedure, which permits valid inference in the presence of unknown serial correlation in the efficiency scores. We are therefore able to draw robust conclusions about a system that has undergone extensive reforms with respect to ideas high on the educational agenda such as decentralised school management and parental choice. Most importantly, we find that school type affects school efficiency and so too does teacher quality. Length: 25 pages Creation-Date: 2007-11 Revision-Date: 2007-11 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0714.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0714 Keywords: efficiency, productivity, double boot-strapping, school finance Handle: RePEc:otg:wpaper:0714 Template-Type: ReDIF-Paper 1.0 Author-Name: Alvin Etang Ndip Author-Name-First: Alvin Author-Name-Last: Etang Ndip Author-Email: alvin.ndip@yale.edu Author-Workplace-Name: Department of Economics, Yale University Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Stephen Knowles Author-Name-First: Stephen Author-Name-Last: Knowles Author-Email: stephen.knowles@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Survey Trust, Experimental Trust and ROSCA Membership in Rural Cameroon Abstract: Broadly speaking, economic experiments and surveys have found trust to be much lower in Africa than in industrialized countries. We analyze new experimental and survey results from rural Cameroon, where the average level of trust appears to be much higher than is typical of Africa. A substantial part of this difference can be explained by the prevalence of Rotating Saving and Credit Associations (ROSCAs) in the area: membership of a common ROSCA is one of the most important factors determining experimental behavior. Correspondingly, responses to the survey questions indicate that villagers have a high degree of trust in people with whom they interact regularly, though not in people in general. There is a significant correlation between the degree of trust exhibited in the game and the degree of trust declared in response to survey questions. However, survey responses do not capture all of the systematic variation in experimental behavior, and understate the importance of ROSCA membership in predicting someoneÕs propensity to trust others. Length: 34 pages Creation-Date: 2007-11 Revision-Date: 2007-11 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0713.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0713 Classification-JEL: C93, O12, Z13 Keywords: social capital, trust, reciprocity, economic experiments, ROSCAs Handle: RePEc:otg:wpaper:0713 Template-Type: ReDIF-Paper 1.0 Author-Name: Alfred A. Haug Author-Name-First: Alfred A. Author-Name-Last: Haug Author-Email: alfred.haug@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Syed A. Basher Author-Name-First: Syed A. Author-Name-Last: Basher Author-Email: basher@econ.yorku.ca Author-Workplace-Name: Department of Economics, York University, Toronto Title: Linear or Nonlinear Cointegration in the Purchasing Power Parity Relationship? Abstract: We test long-run PPP within a general model of cointegration of linear and nonlinear form. Nonlinear cointegration is tested with rank tests of Breitung (2001). We determine Þrst the order of integration of each variable, using monthly data from the post-Bretton Woods era for G-10 countries. In many cases prices are I(2), whereas all exchange rates are I(1). However, there are several countries that have a price level that linearly cointegrates with the US price level so that this combination is I(1). Overall, we find some, though limited, evidence for nonlinear and also linear cointegration in the PPP model. Length: 22 pages Creation-Date: 2007-08 Revision-Date: 2007-08 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0712.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0712 Classification-JEL: C22; F31 Keywords: PPP; order of integration; nonlinear cointegration Handle: RePEc:otg:wpaper:0712 Template-Type: ReDIF-Paper 1.0 Author-Name: J¿rgen Drud Hansen Author-Name-First: J¿rgen Drud Author-Name-Last: Hansen Author-Workplace-Name: Department of Economics, Aarhus School of Business Author-Name: J¿rgen Ulff-M¿ller Nielsen Author-Name-First: J¿rgen Ulff-M¿ller Author-Name-Last: Nielsen Author-Email: jum@asb.dk Author-Workplace-Name: Department of Economics, Aarhus School of Business Title: Market Integration, Choice of Technology and Welfare Abstract: This paper develops an international trade model where firms in a duopoly may diversify their technologies for strategic reasons. The firms face the same set of technologies given by a trade-off between marginal costs and fixed costs, but depending on trade costs the firms may choose different technologies. Market integration may induce a technological restructuring where the firms either diversify their technologies or switch to a homogenous technology leaving jumps in welfare both in the home and foreign country. It is shown that with respect to global welfare Cournot Nash equilibria with homogeneous firms are in some cases inferior to Cournot Nash equilibria with heterogeneous firms. A small decrease in trade costs, which induces a switch from heterogeneous technologies to a homogeneous technology, reduces global welfare. Extensive reductions in trade costs allow for the traditional positive global welfare effects of market integration. Length: 28 pages Creation-Date: 2007-04 Revision-Date: 2007-04 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0711.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0711 Classification-JEL: F12, F13 Keywords: Firm heterogeneity; duopoly, technology choice; market integration; welfare Handle: RePEc:otg:wpaper:0711 Template-Type: ReDIF-Paper 1.0 Author-Name: Ngo Van Long Author-Name-First: Ngo Author-Name-Last: Van Long Author-Email: ngo.long@mcgill.ca Author-Workplace-Name: Department of Economics, McGill University, Montreal Author-Name: Horst Raff Author-Name-First: Horst Author-Name-Last: Raff Author-Email: raf@econ-theory.uni-kiel.de Author-Workplace-Name: Department of Economics, University of Kiel Author-Name: Frank Staehler Author-Name-First: Frank Author-Name-Last: Staehler Author-Email: fstaehler@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: The Effects of Trade Liberalization on Productivity and Welfare: The Role of Firm Heterogeneity, R&D and Market Structure Abstract: This paper develops an oligopolistic model of international trade with heterogeneous firms and endogenous R&D to examine how trade liberalization affects firm and industry productivity, as well as social welfare. We identify four effects of trade liberalization on productivity: (i) a direct effect through changes in R&D investment; (ii) a scale effect due to changes in firm size; (iii) a selection effect due to inefficient firms leaving the market; and (iv) a market-share reallocation effect as efficient firms expand and inefficient firms reduce their output. We show how these effects operate in the short run when market structure is fixed, and in the long run when market structure is endogenous. Among the robust results that hold for any market structure are that trade liberalization (i) increases (decreases) aggregate R&D for low (high) trade costs; (ii) increases expected firm size if trade costs are high; and (iii) raises expected social welfare if trade costs are low. Length: 29 pages Creation-Date: 2007-06 Revision-Date: 2007-06 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0710.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0710 Classification-JEL: F12, F15 Keywords: international trade, firm heterogeneity, R&D, productivity, market structure Handle: RePEc:otg:wpaper:0710 Template-Type: ReDIF-Paper 1.0 Author-Name: Martin Richardson Author-Name-First: Martin Author-Name-Last: Richardson Author-Email: martin.richardson@anu.edu.au Author-Workplace-Name: School of Economics, Australian National University Author-Name: Frank Staehler Author-Name-First: Frank Author-Name-Last: Staehler Author-Email: fstaehler@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Fair Trade Abstract: This paper deals with the behavior of fair trade organizations in an oligopolistic setting in which the vertically integrated fair trade firm produces a commodity which is a weak substitute for another commodity. ProÞt-maximizing oligopolists are vertically disintegrated and produce for both markets and the fair trade firm can charge a premium to consumers due to a Òwarm glow effectÓ that depends on the wage paid to fair trade producers. We show that trade integration will unambiguously increase the size of the fair trade firm. However, the relative size compared to oligopolists shrinks with integration. The effect of a change in substitutability between the two commodities on markets shares depends on the relative market potential. Furthermore, we show that the warm glow effect does not support an expansion of the volume of fair trade. Length: 37 pages Creation-Date: 2007-07 Revision-Date: 2007-07 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0709.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0709 Classification-JEL: F12 Keywords: Fair trade, integration, imperfect competition Handle: RePEc:otg:wpaper:0709 Template-Type: ReDIF-Paper 1.0 Author-Name: Hans Jarle Kind Author-Name-First: Hans Jarle Author-Name-Last: Kind Author-Email: hans.kind@nhh.no Author-Workplace-Name: Norwegian School of Economics and Business Administration, Bergen, Norway Author-Name: Frank Staehler Author-Name-First: Frank Author-Name-Last: Staehler Author-Email: fstaehler@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Another Tale of Two-Sided markets Abstract: This note generalizes the frequently used Hotelling model for two-sided markets. We demonstrate an invariance theorem: advertisement levels neither depend on the media price nor on the location of the media firm. An increase in advertising revenues does not change location but only the media price. In conclusion, a Hotelling model of two-sided markets is equivalent to one of one-sided markets. Length: 10 pages Creation-Date: 2007-06 Revision-Date: 2007-06 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0708.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0708 Classification-JEL: D43, L82 Keywords: Hotelling, general density function, media, location Handle: RePEc:otg:wpaper:0708 Template-Type: ReDIF-Paper 1.0 Author-Name: Alfred A. Haug Author-Name-First: Alfred A. Author-Name-Last: Haug Author-Email: alfred.haug@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Christie Smith Author-Name-First: Christie Author-Name-Last: Smith Author-Email: christie.smith@rbnz.govt.nz Author-Workplace-Name: Economics Department, Reserve Bank of New Zealand Title: Local linear impulse responses for a small open economy Abstract: Traditional vector autoregressions derive impulse responses using iterative techniques that may compound specification errors. Local projection techniques are robust to this problem, and Monte Carlo evidence suggests they provide reliable estimates of the true impulse responses. We use local linear projections to investigate the dynamic properties of a model for a small open economy, New Zealand. We compare impulse responses from local projections to those from standard techniques, and consider the implications for monetary policy. We pay careful attention to the dimensionality of the model, and focus on effects of policy on GDP, interest rates, prices and exchange rates. Length: 30 pages Creation-Date: 2007-04 Revision-Date: 2007-04 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0707.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0707 Classification-JEL: C51, E52, F41 Keywords: Local linear projection-based impulse responses; structural identiÞcation for New Zealand Handle: RePEc:otg:wpaper:0707 Template-Type: ReDIF-Paper 1.0 Author-Name: Peter J. Lambert Author-Name-First: Peter J. Author-Name-Last: Lambert Author-Email: plambert@uoregon.edu Author-Workplace-Name: Department of Economics, University of Oregon Title: Positional equity and equal sacrifice: design principles for an EU-wide income tax? Abstract: Conditions are explored under which a putative EU-wide layer of income tax, additional to the national income taxes of the Member States, would: (a) be horizontally equitable, taking the equals in different EU counties to be those at the same percentile points in the country-specific income distributions, assuming these to differ in logarithms by location and scale only; (b) satisfy an extended equity criterion, that of equal progression among equals; and (c) engender equal sacrifices from the citizens of each country in terms of rank-dependent and utilitarian social evaluation functions. Numerical simulations are undertaken to explore the form that such an EU-wide income tax would take and the properties it would have. Length: 20 pages Creation-Date: 2007-04 Revision-Date: 2007-04 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0706.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0706 Handle: RePEc:otg:wpaper:0706 Template-Type: ReDIF-Paper 1.0 Author-Name: Giovanni Facchini Author-Name-First: Giovanni Author-Name-Last: Facchini Author-Email: facchini@uiuc.edu Author-Workplace-Name: Universita degli Studi di Milano, University of Illinois, Centro Studi Luca dÕAgliano and CEPR Author-Name: Marcelo Olarreaga Author-Name-First: Marcelo Author-Name-Last: Olarreaga Author-Email: molarreaga@worldbank.org Author-Workplace-Name: World Bank and CEPR Author-Name: Peri Silva Author-Name-First: Peri Author-Name-Last: Silva Author-Email: peri.dasilva@mail.business.und.edu Author-Workplace-Name: University of North Dakota Author-Name: Gerald Willmann Author-Name-First: Gerald Author-Name-Last: Willmann Author-Email: gwillmann@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Substitutability and protectionism: Latin AmericaÕs trade policy and imports from China and India Abstract: This paper examines the trade policy response of Latin American governments to the rapid growth of China and India in world markets. To explain higher protection in sectors where a large share is imported from these countries, we extend the 'protection for sale' model to allow for different degrees of substitutability between domestically produced and imported varieties. The extension suggests that higher levels of protection towards Chinese goods can be explained by high substitutability between domestically produced goods and Chinese goods, whereas lower levels of protection towards goods imported from India can be explained by low substitutability with domestically produced goods. The data supports the extension to the 'protection for sale' model, which performs better than the original specification in terms of explaining Latin America's structure of protection. Length: 34 pages Creation-Date: 2007-04 Revision-Date: 2007-04 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0705.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0705 Classification-JEL: F10, F11, F13 Keywords: Latin America, Protectionism Handle: RePEc:otg:wpaper:0705 Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Stephen Knowles Author-Name-First: Stephen Author-Name-Last: Knowles Author-Email: stephen.knowles@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Measuring Aid Effectively in Tests of Aid Effectiveness Abstract: In the extensive empirical literature on aid effectiveness, aid is always measured as a share of GDP. However, measuring aid in real dollars per capita is also consistent with standard growth theory. We show that the choice of denominator makes an enormous difference to the sign and significance of coefficients on aid variables in cross-country panel growth regressions. Our aim is to redirect attention towards the theoretical foundations of the growth literature. Length: 10 pages Creation-Date: 2007-03 Revision-Date: 2007-03 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0704.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0704 Classification-JEL: O19, O40 Keywords: growth, aid effectiveness Handle: RePEc:otg:wpaper:0704 Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Aid and Dutch Disease in the South Pacific Abstract: The impact of aid inflows on relative prices and output is ambiguous. Aid inflows that increase domestic expenditure are likely to cause real exchange rate appreciation, ceteris paribus. However, if this expenditure raises the capital stock in the traded goods sector, then output in this sector might not contract, at least in the steady state. Moreover, if investment in the non-traded goods sector is relatively high and/or productive, then there is not necessarily any real exchange rate appreciation in the steady state. We use time-series data to examine the impact of aid inflows on output and real exchange rates in ten South Pacific island states, and find aid inflows to produce a variety of outcomes in economies of different kind. Length: 19 pages Creation-Date: 2007-02 Revision-Date: 2007-02 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0703.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0703 Classification-JEL: F41, O56 Keywords: aid, Dutch Disease, South Pacific Handle: RePEc:otg:wpaper:0703 Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Kalvinder Shields Author-Name-First: Kalvinder Author-Name-Last: Shields Author-Email: k.shields@unimelb.edu.au Author-Workplace-Name: Department of Economics, University of Melbourne Title: Regional Asymmetries in the Impact of Monetary Policy Shocks on Prices: Evidence from US Cities Abstract: Deviations from the Law of One Price across US cities are smaller than corresponding international deviations, but nevertheless substantial. We find that a proportion of these deviations can be explained by asymmetric responses to federal monetary policy shocks, and that a large part of the asymmetry can be explained by city-specific economic characteristics. Length: 22 pages Creation-Date: 2007-02 Revision-Date: 2007-02 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0702.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0702 Classification-JEL: E31, E52, R19 Keywords: Law of One Price; monetary policy shocks Handle: RePEc:otg:wpaper:0702 Template-Type: ReDIF-Paper 1.0 Author-Name: Scott McCracken Author-Name-First: Scott Author-Name-Last: McCracken Author-Email: mccsc709@student.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Author-Name: Frank Staehler Author-Name-First: Frank Author-Name-Last: Staehler Author-Email: fstaehler@business.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago Title: Economic integration and the choice of commodity tax base with endogenous market structures Abstract: This paper analyzes the choice of commodity tax base when countries set their taxes non-cooperatively in a two-country symmetric reciprocal dumping model of intra-industry trade with free entry and trade costs. We show that the consumption base (destination principle) dominates the production base (origin principle) when trade costs are high or demand is linear. For lower levels of trade costs and nonlinear demand, the welfare ranking of the two tax bases is ambiguous. Hence, there is no clear preference for a tax principle with an ongoing movement towards closer economic integration. Length: 31 pages Creation-Date: 2007-02 Revision-Date: 2007-02 File-URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0701.pdf File-Format: Application/pdf File-Function: First version, 2007 Number: 0701 Classification-JEL: F12, H20 Keywords: Economic integration, commodity taxation, trade, imperfect competition, endogenous market structures Handle: RePEc:otg:wpaper:0701