Applied Economics Letters

Rondeau, Fabien

doi: 10.1080/13504850600706578pmid: N/A

In this article, the degree of integration between European countries is linked to the evolution of the pattern of trade. Evolution of the long-run sensitivity between European outputs is estimated by recursive Fully–Modified Ordinary Least Squares (FM-OLS) and compared to a recursive index of intra-industry trade. Significant correlations are found between integration and intra-industry trade share: positive for most countries but negative for others. The explanatory variable seems to be the initial intra-industry trade share.

Shahrabani, Shosh

doi: 10.1080/13504850600706602pmid: N/A

The purpose of the article is to examine the importance of personal characteristics vs. the importance of human capital returns in explaining the existing gender wage gap in different economic sectors in Israel. Using simulations on Israeli census data for 1983 and 1995, the analysis predicts women's wages in two cases. The first case predicts a woman's wages if she had the same personal characteristics as a man, and the second case predicts a woman's wages if she had the same human capital returns. By comparing the two predicted gender wage gaps to the existing gender wage gap, we can learn about the dominant explanation for the existing gender wage gap. The results show that the gender wage gap in all economic sectors stems mainly from differences in gender returns rather than differences in gender characteristics. Moreover, in the products sector and the low-services sector, the gender wage gap would have been larger if women had the same characteristics as men.

Howsen, Roy M.; Trawick, Michelle W.

doi: 10.1080/13504850600706453pmid: N/A

Within the education literature, a controversy exists with respect to the issue of matching student and teacher race in an effort to improve student performance. Ehrenberg et al. (1995) finds very little support for this issue, while more recently Dee (2004) finds that there are significant educational gains when students are assigned to an own-race teacher. Dee's result is found after confirming that there was no association between assignment of an own-race teacher and student characteristics, i.e., sorting of students did not transpire. We extend Dee's work by including the effects of student innate ability and teacher gender on student achievement. Our findings indicate that once these two variables are taken into consideration, sorting of students does transpire, and matching students and teachers of similar race has no statistically significant affect on student achievement.

Sim, Nicholas C. S.

doi: 10.1080/13504850600706255pmid: N/A

This article examines whether married women in the US treat their jobs as careers or as secondary source of household income. A simultaneous probit model is applied to cross-section data obtained from the Panel Study of Income Dynamics. I show that married women are more likely to work when the household is less financially constrained, suggesting that their jobs appear more like careers.

Margolis, Howard

doi: 10.1080/13504850600706529pmid: N/A

A controversy among economists and others interested in the limits of rational choice analysis, still running after an onset at least two decades ago, concerns whether intelligent people and especially experts, can be subject to cognitive illusions. This note provides a striking illustration supporting that disconcerting conjecture. It analyses the apparent inability of professional economists to give a better than chance response to a very elementary question about consumer surplus.

Carneiro, Francisco G.

doi: 10.1080/13504850600706594pmid: N/A

The intertemporal relationship between oil revenues, real government spending and real output over the oil cycle is investigated for the case of Angola, the second largest oil producer in Sub-Saharan Africa. The results of a trivariate VAR, impulse response functions and variance decomposition analysis provide empirical support for the tax-spend hypothesis. In addition, the Angolan economy is found victim of the resource curse, as real output does not respond to aggregate demand shocks such as changes in real government spending. The policy implications for Angola are 2-fold. First, to alleviate the constraints associated with the resource curse, Angola needs to find ways to diversify its economy. Second, given the direction of causality found between government expenditures and oil revenues, in order to avoid fiscal disequilibria, efficient management of oil revenues is as important as controlling public spending.

Castellani, Davide; Zanfei, Antonello

doi: 10.1080/13504850600706503pmid: N/A

Recent empirical works on the within-sector impact of inward investments on domestic firms’ productivity have found rather robust evidence of no (or even negative) effects. We suggest that, among other reasons, a specification error might explain some of these results. A more general specification, which includes the usual one as a special case, is proposed. Using data on Italian manufacturing firms in 1992–2000, we find positive externalities only once we allow for the more flexible specification.

Imer, Evrim

doi: 10.1080/13504850600706347pmid: N/A

This article provides an empirical analysis for the existence and direction of Granger causality between Turkey and Russian Federation by using structural breaks of seven developing stock market returns as a measure of contagion. Empirical results also reveal that there is an increase in the number of causalities in turmoil periods.

Heath, Will Carrington; Skinner, Sarah J.; Watson, John Keith

doi: 10.1080/13504850600706461pmid: N/A

Siliverstovs, Boriss; Schumacher, Dieter

doi: 10.1080/13504850600706446pmid: N/A

This study compares two alternative approaches–the traditional ordinary least square (OLS) and the Poisson Quasi Maximum Likelihood (PQML) procedures–to estimation of the home market effects for the heterogeneous, the reference priced and the homogeneous goods in the gravity model derived in Feenstra et al. (2001). Despite our findings that the PQML estimation results oftentimes (significantly) differ from those obtained by the OLS procedure, both estimation procedures largely lead to the qualitatively similar conclusions on the existence of the home market effect for the different types of goods with several exceptions.