The loss function is a mathematical representation of the costs experienced by a forecaster when observed outcomes differ from what was predicted. Prior studies suggest that USDA forecasts are not optimal based on an assumed mean-zero quadratic loss function. This study proposes an alternative view of forecast evaluation, which assumes all USDA forecasts are produced to minimize the forecasters’ costs, and searches for the dimensions of the loss function under which optimality holds. We illustrate the degree to which USDA loss functions vary across a series of WASDE price forecasts. A better understanding of USDA forecasters’ costs will benefit forecasters and forecast users.

The scope sensitivity test is used to validate value estimates of non-market environmental goods and services derived from the contingent valuation method. The absence of economic scope could suggest invalid value estimates. Recent studies have attributed scope insensitivity to affective, cognitive, and behavioral factors. In this study, we extend the behavioral insights in explaining scope insensitivity by incorporating insights from the theory of mental accounting. Our empirical results indicate that if subjects consider the environmental good as part of their recreational budget within a mental accounting framework, we can explain the scope insensitivity with otherwise standard preference.

This article seeks to answer the question of how interbranch organisations (IBOs) can facilitate coordination among agents involved in transactions within agri-food chains. An IBO is a complex entity that establishes relationships among agents operating at different stages of a supply chain. The empirical analysis focuses on the Italian tomato supply chain and adopts a Process-tracing approach. The study is grounded in meso-institutions theory and demonstrates how the meso-institutional nature of the analysed IBO helps explain its role in establishing coordination among agents by performing the functions outlined by the theory. The institutional outcome of this relationship is the adoption of a contractual system that facilitates coordination itself. The contractual system identified provides an example of the articulation between the meso-institutional and micro-institutional levels.

This paper studies the effect of gender imbalance on assortative matching and household income inequality. Using data across prefectures in China, we show that a higher sex ratio in the marriage market is negatively associated with both assortative marriage and household income inequality. Motivated by empirical evidence, we develop a heterogeneous-agent model to study the mechanism behind the pattern. The quantitative results of the model match the empirical evidence: a higher sex ratio is associated with a lower degree of assortative matching, which leads to a decrease in household income inequality. When we allow men and women to choose their level of education endogenously before entering the marriage market, we find that a higher sex ratio leads to a higher level of education investment among both men and women, with men investing more significantly than women.

This study investigates the effect of participation in the Global Value Chain (GVC) on Multidimensional Energy Poverty (MEPI), and the role played by the quality of institutions (QI) in the short and long run for 51 African countries over the period 1995–2018. For this purpose, the DCCE-PMG approach is employed, as well as both the GVC and QI indices. MEPI includes electricity, clean fuel, and technology for cooking. The findings show that GVC participation negatively affects MEPI in both the short and long run, meaning that the GVC reduces energy poverty in Africa. Besides, there is mixed evidence regarding the heterogeneity effect according to rural and urban locations. The evidence further shows that GVCs interact with institutions to negatively impact both energy poverty and the rural–urban MEPI gap, implying that the better the institutional quality, the larger the effect of GVC integration on energy poverty reduction. Therefore, a better quality of institution enables local firms, participating in the GVC, to easily capture technology and knowledge diffusion to promote energy development and fulfill the spatial inequality in energy poverty. Additional tests allow us to confirm the evidence and, moving forward, the implications of participation in the GVC.

We study the effect of democratization on stock market liquidity across Spanish political regimes between 1914 and 1936. We use press news related to mass mobilization in favor of political and redistributive reforms to build a monthly index of political uncertainty, and test its impact on different measures of stock liquidity based on daily data for the Madrid Stock Exchange. Our findings suggest that shifts in political uncertainty decreased trading and increased its price impact after the transition to democracy in 1931, but not in the socio-political mobilization that shook the monarchic regime during World War I and its aftermath. The results are robust to controls for other sources of political, economic and international uncertainty. Our evidence suggests that potential challenges to the socio-economic status quo became more credible after the regime change of 1931 and increased the perceived cost of democratization for wealthy elites. This generated a situation of radical uncertainty about future asset returns, leading to a persistent deterioration of investor participation and market liquidity. Contemporary financial chronicles support this interpretation.