The role of quality ladders in a Ricardian model of trade with nonhomothetic preference.

The literature on North-South trade has explored conditions under which international trade might be a factor magnifying income disparities between the advanced North and the backward South. Little attention has yet been placed on the effect of trade on countries that do not display substantial dissimilarities concerning capital endowments. We show that even when no single country is technologically more advanced than any other one and productivity changes are uniform and identical in all countries, international trade may still be a source of income divergence. Income divergence will be experienced when comparative advantages induce patterns of specialisation that, although optimal for each country at some initial point in time, do not offer the same scope for improvements in terms of subsequent quality upgrading of final products

Love for Quality, Comparative Advantage, and Trade

We propose a theory of trade in which comparative advantages reveal themselves gradually over the path of development. Following the Ricardian tradition, countries specialise and export the set of goods they are able to produce at relatively lower cost given their exogenous initial endowments. However, we introduce two new features into a Ricardian trade model with horizontally and vertically differentiated goods. First, individuals have nonhomothetic preferences in that their willingness to pay for quality rises with their income. Second, heterogeneities in productivity become more pronounced at higher levels of quality of production. As a result, our theory predicts that the scope for international trade widens and productive specialisation increases as real incomes grow and wealthier consumers raise the quality of their consumption baskets. Our predictions find empirical support in a number tests performed using bilateral trade data at the product level.International Trade; Nonhomothetic Preferences; Quality Ladders

Valuation of Options in a Setting with Happiness-Augmented Preferences

We derive a pricing formula for a European call option written on equity in a framework where returns and consumption covary with external happiness. Being a non-tradable variable, happiness is regarded as an extra variable in a parameterised version of state dependent utility. We derive an extended version of the Black-Scholes (BS) formula and find that, in an optimistic environment (that is, where a high growth rate of happiness is expected), the standard BS formula may underestimate the value of the call option, and overestimate its sensitivity to changes in the underlying parameters. Under the assumption of lognormality of the happiness distribution, testable hypotheses for quality of hedging strategies can also be implemented.

Parasites of cage cultured European seabass <i>Dicentrarchus Labrax</i> and gilthead seabream <i>Sparus aurata</i> from Sardinia (western Mediterranean): first results

European seabass Dicentrarchus labrax and gilthead seabream Sparus aurata are the most important marine finfish species intensively cultured in the Mediterranean. Many factors influenced the rapid increase in the production of these species in the last two decades. One of the most important factors is the great development and diffusion of sea-cage culture, because some of the parasite species has become a serious threat to cage-reared fish in other Mediterranean localities

The Role of Quality Ladders in a Ricardian Model of Trade with Nonhomothetic Preferences

The literature on North-South trade has explored conditions under which international trade might be a factor magnifying income disparities between the advanced North and the backward South. Little attention has yet been placed on the effect of trade on countries that do not display substantial dissimilarities concerning capital endowments. We show that even when no single country is technologically more advanced than any other one and productivity changes are uniform and identical in all countries, international trade may still be a source of income divergence. Income divergence will be experienced when comparative advantages induce patterns of specialisation that, although optimal for each country at some initial point in time, do not offer the same scope for improvements in terms of subsequent quality upgrading of final products.International Trade, Quality Ladders, Nonhomothetic Preferences

Occurrence of <i>Philometra lateolabracis</i> (Nematoda: Philometridae) in the gonads of marine perciform fishes in the Mediterranean region

Gravid females of the nematode Philometra lateolabracis (Yamaguti, 1935), a parasite of gonads of marine perciform fishes, were found in wild and cultured dusky grouper Epinephelus marginatus (Lowe) from waters near the Balear Islands (Spain, Mediterranean Sea) and Sicily (Italy, Thyrrenean Sea), and in the greater amberjack Seriola dumerili (Risso) in Croatia (south-eastern Adriatic Sea). In wild E. marginatus in Spain, the overall prevalence was 21% and the intensity of infection 1 nematode per fish. The nematodes are briefly described and illustrated. The species Sanguinofilaria jordanoi López-Neyra, 1951, described from the ovary of Epinephelus gigas Brünich from Morocco, is synonymized with P. lateolabracis. This is the first documented record of P. lateolabracis from fishes of the Mediterranean region and its finding in S. dumerili represents a new host record. The possible importance of this pathogenic parasite for cultures of marine perciform fishes in the region is stressed

North-easternmost record of <i>Halosaurus ovenii</i> Actinopterygii: Notacanthiformes: Halosauridae) in the Mediterranean Sea, with notes on its biology

A single adult female specimen of Halosaurus ovenii Johnson, 1864 was captured by trammel nets at a depth of about 200 m off the coast of Arbatax (Sardinia, Italy) in early April 2007. Macroscopic and microscopic analysis of the gonad showed a postspawning ovary. This is the fourth documented capture of this fish in the Mediterranean Sea, representing the north-easternmost record for this species in this geographic area. Furthermore, the present specimen was fished at the shallowest depth ever recorded before

Sistema di diagnosi collaborativa per cardiologia pediatrica

In questo rapporto viene dimostrato come è possibile costruire, partendo da tecnologie COTS, un sistema di telemedicina in grado di permettere ad un gruppo di esperti localizzati centralmente di fornire a personale clinico remoto supporto e guida in tempo reale per procedure ecografiche complesse. La prima applicazione del sistema è nella ecocardiologia neonatale, in particolare per la valutazione della pericolosità di potenziali patologie cardiache in neonati immediatamente dopo il parto

Asset pricing with utility from external anticipation

We show that augmenting household's preferences with utility from anticipation of external factors significantly improves the performance of the consumption-based asset pricing model. Specifically, our predictions match the realized returns on equity and on risk-free assets and helps in explaining the observed equity premium volatility. This is due to the novel forward-looking component of preferences exerting an effect on households' decision that countervails the standard market incentives to invest. Our findings stem from simulating the model with different data frequencies and confidence indicators as proxies for external anticipation. The model rationalizes the conventional wisdom that confidence makes households feel richer, hence willing to consume more. Our results also suggest that the observed predictive power of confidence on consumption growth might be justified by anticipatory utility

Technology shocks and asset pricing: the role of consumer confidence

We show that the introduction in a power utility function of a confidence index to signal the state of the world allows for an otherwise standard asset pricing model to match the observed consumption growth volatility and excess returns with a reasonable level of relative risk aversion. Our results stem from two quantitative exercises: a calibration and a non-linear estimation. In both cases, our findings are robust to different data frequencies and various indicators of confidence. Our estimations are also robust to a number of instrument specifications. We rationalise this finding by developing a model where monopolistically competitive firms are subject to idiosyncratic shocks, which affect both the quantity and the quality of the goods produced. When households foresee good times, they expect firms to generate higher profits and produce higher quality goods. While greater expected excess returns provide a larger incentive to save, better expected quality of consumption discourages saving, as it lowers the expected marginal utility of any given level of physical consumption. Compared to standard consumption-based frameworks, our model thus predicts a more stable consumption path. Building on the customary notion of confidence indicators as the household expectations on the future state of the economy, we argue that confidence provides a suitable proxy for the unobservable quality of consumption via the positive correlation between the latter and the overall performance of the economy