Valerio Filoso | Università degli Studi di Napoli "Federico II" (original) (raw)
Papers by Valerio Filoso
This paper deals with economic growth in the case of binding households borrowing constraints. Fo... more This paper deals with economic growth in the case of binding households borrowing constraints. Focus is on fertility and education decisions of individual agents who rely on altruistic linkages within the family. OLG models are proposed to analyse two forms of education finance: students loans in perfect credit markets; gifts from parents who face liquidity constraints. Central to the second model is an inverse relation between human capital investment and fertility rate.
We repeatedly elicited individuals' Willingness to Accept (WTA) evaluations for an auctioned ... more We repeatedly elicited individuals' Willingness to Accept (WTA) evaluations for an auctioned bad in an experimental setting in which truthful revelation is the (weakly) dominant strategy. We investi-gate whether the observation of supposedly irrelevant signals (the market price, the asks at either the bottom or the top of the distribution of asks) affect the elicited values. Our experimental sample was made up of 162 subjects partitioned in 18 independent markets characterized by different informa-tional conditions. Our analysis provide two main findings. First, individuals' WTA evaluations are remarkably driven by a strong although unexpected tendency to conform to the asks either at the bottom or the top of the distribution by a factor of 44-66%. Second, although a clear tendency to adapt one's own ask to the market price (shaping effect) emerges when no other information is being provided, the provision of information about the actual behavior of well identified (grou...
According to the standard economic analysis of marriage (Beckeg 1973), negative assortative matin... more According to the standard economic analysis of marriage (Beckeg 1973), negative assortative mating with regard to labour income prevails in competitive marriage markets, while no neat prediction can be made for mating with regard to education, since partners' schooling levels tend to be positively related, but education is also positively related to labour income. A richer framework for marriage decision must take into account the strategic and dynamic aspects of mates' choices and exit option ofdivorce (Lundberg and Pollak,2003). This approach may help explaining some patterns of the Italian marriage market. Using data from Bank of ltaly's Survey of Household Income and Wealth and crossing them with data from Istat for the years 1995-1998, we test the standard theory against the strategic theory. The results show a strong inverse relation at the regional level between the educational correlation and the divorce rate, which suggests that transaction costs do play a role ...
Conformity behavior, i.e., the agreement between an individual’s choices and the prevailing behav... more Conformity behavior, i.e., the agreement between an individual’s choices and the prevailing behavior of a reference group, is a commonly observed phenomenon. Though some types of social interactions may give raise to specific incentives to adopt either a majoritarian or a contrarian behavior, we want to investigate whether the same behavioral pattern emerges even when no economic motivator is present. To accomplish this task, we employ an experimental Vickrey median price auction designed to provide incentives to reveal individual preferences truthfully. Whereas we feed the control group with just the median price, we give out additional information on other players’ bids for those in the treated groups. These informations are designed to provide hints at revising individual bids. Our main results point to a strong tendency of the individuals to adapt their behavior to those of the individuals which can be observed. Moreover, although a clear shaping effect (a regression toward the ...
Do differently oriented political parties implement radically divergent policies which impact the... more Do differently oriented political parties implement radically divergent policies which impact the citizens’s welfare? The overheated political debate notwithstanding, it is far from clear if this is really the case. Whereas current literature on this issue narrows the focus on specific policy outcomes and instruments, we use the real estate market to evaluate the impact of the whole spectrum of municipal policies. Using a novel dataset on Italian municipal elections for the years 2003–2011 and the corresponding changes in real estate market prices, we employ a regression discontinuity approach to detect the causal effect of a change in municipal majorities. We find robust evidence of no difference between the effects of the policies enacted by left-wing and right-wing parties after three, four, and five years since the election.
This chapter reviews the New Economic Geography (NEG) models that explain the uneven distribution... more This chapter reviews the New Economic Geography (NEG) models that explain the uneven distribution of economic activity across space employing endogenous agglomeration processes, and the interplay of agglomeration and dispersion forces. Unlike the two-region models that have a restricted applicability, this article focuses on the multiregional NEG models recently developed in the literature, reviews their contributions systematically and compares different modelling strategies. As a unifying framework, we adopt the footloose entrepreneur model considering the role and nature of transport costs, and the welfare properties of the spatial equilibria and the design of optimal economic policies.
Dynamic Modeling and Econometrics in Economics and Finance, 2015
Institutional and Social Dynamics of Growth and Distribution, 2010
Journal of Public Finance and Public Choice, 1-3, pp. 9-19., 2013
We study the consequences of broader access to credit and capital markets on household decisions ... more We study the consequences of broader access to credit and capital markets on household decisions over the number of children. A model of the net reproduction rate is estimated on data from 78 countries over the period 1995-2010. Liquidity constraints are approximated by private credit and household credit, while opportunities for financial investment are measured by domestic public debt. We use the Index of Financial Liberalisation (Abiad et al., 2009) as one of the instruments for financial variables. We find that improved access to credit increases fertility with an elasticity of around 30%, while the effect of the development of capital markets is negative (-10%). The regression model takes the role of social security into account. Quantile regression shows that our results are robust to outliers and parameter heterogeneity.
This paper presents a Stata command, reganat, which implements graphically the method of regressi... more This paper presents a Stata command, reganat, which implements graphically the method of regression anatomy as described by . This tool can help the analyst in the validation of linear models, since it produces a bi-dimensional scatterplot obtained under the control of other covariates. 1
Metroeconomica, 2009
This works tests whether or not the introduction of divorce law changes the timing of marital sea... more This works tests whether or not the introduction of divorce law changes the timing of marital search. Common sense suggests that rational agents should adjust to the divorce risk by increasing the average length of search spell, whereas the option value theory stresses the role played by irreversible investments: in this case, the new exit option available to married partners should result in shorter search spells. Using a dynamic model of marital search, a new dataset of retrospective individual Italian data, and two robust statistical specifications based upon the Before-After estimator, we find strong evidence that the legal innovation actually lowered the age at marriage, thereby worsening the level of marital matching, and possibly reinforcing self-fulfilling prophecies of divorce.
This works tests whether or not the introduction of divorce law changes the timing of marital sea... more This works tests whether or not the introduction of divorce law changes the timing of marital search. Common sense suggests that rational agents should adjust to the divorce risk by increasing the average length of search spell, whereas the option value theory stresses the role played by irreversible investments: in this case, the new exit option available to married partners should result in shorter search spells. Using a dynamic model of marital search, a new dataset of retrospective individual Italian data, and two robust statistical specifications based upon the Before-After estimator, we find strong evidence that the legal innovation actually lowered the age at marriage, thereby worsening the level of marital matching, and possibly reinforcing self-fulfilling prophecies of divorce.
We study the consequences of broader access to credit and to capital markets on household's decis... more We study the consequences of broader access to credit and to capital markets on household's decisions over the number of children. In a life-cycle model of choice with forward and backward caring between parents and children, we analyze the effects of relaxing adults' borrowing constrains and broadening the opportunities for financial investment, and show how the sign of these effects depends on the role of children as a normal or inferior good in parents' preferences. We estimate the quantitative implications of our theoretical model on data from 145 countries over the period 1980-2006. Empirical results indicate that improved access to credit reduces fertility in poor countries and increases fertility in high-income countries. The effect of the development of capital markets on the number of children is negative in low-income countries and positive in the rich. When the analysis includes public pensions the main results remain the same. We also estimate the effect of the real interest rate, which proves significant and negative.
The Stata Journal (yyyy) vv, Number ii, pp. 112 ... Valerio Filoso Department of Economics Unive... more The Stata Journal (yyyy) vv, Number ii, pp. 112 ... Valerio Filoso Department of Economics University of Naples Federico II Naples, Italy filoso@unina.it ... Abstract. This paper presents a command, reganat, which implements graph-ically the method of regression anatomy ...
While corporate income taxation is a major issue in the debate over international finance, econom... more While corporate income taxation is a major issue in the debate over international finance, economic theory has no clear stance on who bears its burden. On balance, economists seem still more prone to accept that taxing profits does not affect corporations' outcomes. This paper makes three cases for non-neutrality. First, since corporate income taxation is asymmetric between profit and loss, the tax rate may change the ranking of alternative investments. Secondly, the imperfect observability of the use of internal resources makes pure economic profits very difficult to detect. Thirdly, when the pervasive role of entrepreneurship is fully taken into account, corporate income taxation appears clearly as a direct tax on market adjustments and successful speculation.
While corporate taxation is a major issue in the debate over international finance, economic theo... more While corporate taxation is a major issue in the debate over international finance, economic theory has no clear stance on who bears its burden. On balance, economists seem still more prone to accept that taxing profits does not affect corporations' outcomes. This paper makes three cases for non-neutrality. First, since corporate taxation is asymmetric between profit and loss, the tax rate may change the ranking of alternative investments. Secondly, the imperfect observability of the use of internal resources makes pure economic profits very difficult to detect. Thirdly, when the pervasive role of entrepreneurship is fully taken into account, corporate taxation appears clearly as a direct tax on market adjustments and as an indirect tax on wages.
This paper deals with economic growth in the case of binding households borrowing constraints. Fo... more This paper deals with economic growth in the case of binding households borrowing constraints. Focus is on fertility and education decisions of individual agents who rely on altruistic linkages within the family. OLG models are proposed to analyse two forms of education finance: students loans in perfect credit markets; gifts from parents who face liquidity constraints. Central to the second model is an inverse relation between human capital investment and fertility rate.
We repeatedly elicited individuals' Willingness to Accept (WTA) evaluations for an auctioned ... more We repeatedly elicited individuals' Willingness to Accept (WTA) evaluations for an auctioned bad in an experimental setting in which truthful revelation is the (weakly) dominant strategy. We investi-gate whether the observation of supposedly irrelevant signals (the market price, the asks at either the bottom or the top of the distribution of asks) affect the elicited values. Our experimental sample was made up of 162 subjects partitioned in 18 independent markets characterized by different informa-tional conditions. Our analysis provide two main findings. First, individuals' WTA evaluations are remarkably driven by a strong although unexpected tendency to conform to the asks either at the bottom or the top of the distribution by a factor of 44-66%. Second, although a clear tendency to adapt one's own ask to the market price (shaping effect) emerges when no other information is being provided, the provision of information about the actual behavior of well identified (grou...
According to the standard economic analysis of marriage (Beckeg 1973), negative assortative matin... more According to the standard economic analysis of marriage (Beckeg 1973), negative assortative mating with regard to labour income prevails in competitive marriage markets, while no neat prediction can be made for mating with regard to education, since partners' schooling levels tend to be positively related, but education is also positively related to labour income. A richer framework for marriage decision must take into account the strategic and dynamic aspects of mates' choices and exit option ofdivorce (Lundberg and Pollak,2003). This approach may help explaining some patterns of the Italian marriage market. Using data from Bank of ltaly's Survey of Household Income and Wealth and crossing them with data from Istat for the years 1995-1998, we test the standard theory against the strategic theory. The results show a strong inverse relation at the regional level between the educational correlation and the divorce rate, which suggests that transaction costs do play a role ...
Conformity behavior, i.e., the agreement between an individual’s choices and the prevailing behav... more Conformity behavior, i.e., the agreement between an individual’s choices and the prevailing behavior of a reference group, is a commonly observed phenomenon. Though some types of social interactions may give raise to specific incentives to adopt either a majoritarian or a contrarian behavior, we want to investigate whether the same behavioral pattern emerges even when no economic motivator is present. To accomplish this task, we employ an experimental Vickrey median price auction designed to provide incentives to reveal individual preferences truthfully. Whereas we feed the control group with just the median price, we give out additional information on other players’ bids for those in the treated groups. These informations are designed to provide hints at revising individual bids. Our main results point to a strong tendency of the individuals to adapt their behavior to those of the individuals which can be observed. Moreover, although a clear shaping effect (a regression toward the ...
Do differently oriented political parties implement radically divergent policies which impact the... more Do differently oriented political parties implement radically divergent policies which impact the citizens’s welfare? The overheated political debate notwithstanding, it is far from clear if this is really the case. Whereas current literature on this issue narrows the focus on specific policy outcomes and instruments, we use the real estate market to evaluate the impact of the whole spectrum of municipal policies. Using a novel dataset on Italian municipal elections for the years 2003–2011 and the corresponding changes in real estate market prices, we employ a regression discontinuity approach to detect the causal effect of a change in municipal majorities. We find robust evidence of no difference between the effects of the policies enacted by left-wing and right-wing parties after three, four, and five years since the election.
This chapter reviews the New Economic Geography (NEG) models that explain the uneven distribution... more This chapter reviews the New Economic Geography (NEG) models that explain the uneven distribution of economic activity across space employing endogenous agglomeration processes, and the interplay of agglomeration and dispersion forces. Unlike the two-region models that have a restricted applicability, this article focuses on the multiregional NEG models recently developed in the literature, reviews their contributions systematically and compares different modelling strategies. As a unifying framework, we adopt the footloose entrepreneur model considering the role and nature of transport costs, and the welfare properties of the spatial equilibria and the design of optimal economic policies.
Dynamic Modeling and Econometrics in Economics and Finance, 2015
Institutional and Social Dynamics of Growth and Distribution, 2010
Journal of Public Finance and Public Choice, 1-3, pp. 9-19., 2013
We study the consequences of broader access to credit and capital markets on household decisions ... more We study the consequences of broader access to credit and capital markets on household decisions over the number of children. A model of the net reproduction rate is estimated on data from 78 countries over the period 1995-2010. Liquidity constraints are approximated by private credit and household credit, while opportunities for financial investment are measured by domestic public debt. We use the Index of Financial Liberalisation (Abiad et al., 2009) as one of the instruments for financial variables. We find that improved access to credit increases fertility with an elasticity of around 30%, while the effect of the development of capital markets is negative (-10%). The regression model takes the role of social security into account. Quantile regression shows that our results are robust to outliers and parameter heterogeneity.
This paper presents a Stata command, reganat, which implements graphically the method of regressi... more This paper presents a Stata command, reganat, which implements graphically the method of regression anatomy as described by . This tool can help the analyst in the validation of linear models, since it produces a bi-dimensional scatterplot obtained under the control of other covariates. 1
Metroeconomica, 2009
This works tests whether or not the introduction of divorce law changes the timing of marital sea... more This works tests whether or not the introduction of divorce law changes the timing of marital search. Common sense suggests that rational agents should adjust to the divorce risk by increasing the average length of search spell, whereas the option value theory stresses the role played by irreversible investments: in this case, the new exit option available to married partners should result in shorter search spells. Using a dynamic model of marital search, a new dataset of retrospective individual Italian data, and two robust statistical specifications based upon the Before-After estimator, we find strong evidence that the legal innovation actually lowered the age at marriage, thereby worsening the level of marital matching, and possibly reinforcing self-fulfilling prophecies of divorce.
This works tests whether or not the introduction of divorce law changes the timing of marital sea... more This works tests whether or not the introduction of divorce law changes the timing of marital search. Common sense suggests that rational agents should adjust to the divorce risk by increasing the average length of search spell, whereas the option value theory stresses the role played by irreversible investments: in this case, the new exit option available to married partners should result in shorter search spells. Using a dynamic model of marital search, a new dataset of retrospective individual Italian data, and two robust statistical specifications based upon the Before-After estimator, we find strong evidence that the legal innovation actually lowered the age at marriage, thereby worsening the level of marital matching, and possibly reinforcing self-fulfilling prophecies of divorce.
We study the consequences of broader access to credit and to capital markets on household's decis... more We study the consequences of broader access to credit and to capital markets on household's decisions over the number of children. In a life-cycle model of choice with forward and backward caring between parents and children, we analyze the effects of relaxing adults' borrowing constrains and broadening the opportunities for financial investment, and show how the sign of these effects depends on the role of children as a normal or inferior good in parents' preferences. We estimate the quantitative implications of our theoretical model on data from 145 countries over the period 1980-2006. Empirical results indicate that improved access to credit reduces fertility in poor countries and increases fertility in high-income countries. The effect of the development of capital markets on the number of children is negative in low-income countries and positive in the rich. When the analysis includes public pensions the main results remain the same. We also estimate the effect of the real interest rate, which proves significant and negative.
The Stata Journal (yyyy) vv, Number ii, pp. 112 ... Valerio Filoso Department of Economics Unive... more The Stata Journal (yyyy) vv, Number ii, pp. 112 ... Valerio Filoso Department of Economics University of Naples Federico II Naples, Italy filoso@unina.it ... Abstract. This paper presents a command, reganat, which implements graph-ically the method of regression anatomy ...
While corporate income taxation is a major issue in the debate over international finance, econom... more While corporate income taxation is a major issue in the debate over international finance, economic theory has no clear stance on who bears its burden. On balance, economists seem still more prone to accept that taxing profits does not affect corporations' outcomes. This paper makes three cases for non-neutrality. First, since corporate income taxation is asymmetric between profit and loss, the tax rate may change the ranking of alternative investments. Secondly, the imperfect observability of the use of internal resources makes pure economic profits very difficult to detect. Thirdly, when the pervasive role of entrepreneurship is fully taken into account, corporate income taxation appears clearly as a direct tax on market adjustments and successful speculation.
While corporate taxation is a major issue in the debate over international finance, economic theo... more While corporate taxation is a major issue in the debate over international finance, economic theory has no clear stance on who bears its burden. On balance, economists seem still more prone to accept that taxing profits does not affect corporations' outcomes. This paper makes three cases for non-neutrality. First, since corporate taxation is asymmetric between profit and loss, the tax rate may change the ranking of alternative investments. Secondly, the imperfect observability of the use of internal resources makes pure economic profits very difficult to detect. Thirdly, when the pervasive role of entrepreneurship is fully taken into account, corporate taxation appears clearly as a direct tax on market adjustments and as an indirect tax on wages.