Gaetano Lisi

Entrepreneurship and the Hidden Economy: An Extended Matching Model

This paper develops a labour market matching model in order to address the problem of the persistence of the hidden sector and of its regional concentration, as in Italy and in the enlarged Europe. The main novel features of the model are that entrepreneurial ability affects job productivity, and that regular firms receive negative externalities from the hidden sector, which may capture the pressure typically exerted by corruption and organized crime, and positive externalities from the other regular firms. At least one interior equilibrium emerges, thus providing an explanation for the so-called “shadow puzzle”, with the possibility that tougher monitoring may reduce both the hidden sector and unemployment. If externalities are non-linear, two equilibria may emerge, thus accounting for regional dualism. The “better” equilibrium is in fact characterised by a smaller hidden sector, higher levels of overall productivity, output, entrepreneurial ability used, extra-profits, relative wages, and more favourable externalities.

The Underground Economy in a Matching Model of Endogenous Growth

A matching model will explain both unemployment and economic growth by considering the underground sector. Three problems can thus be simultaneously accounted for: (i) the persistence of underground economy, (ii) the ambiguous relationships between underground employment and unemployment, and (iii) between growth and unemployment. The key assumptions adopted are that entrepreneurial ability is heterogeneous across individuals; skill accumulation determines productivity growth in the regular sector and a positive externality on the underground sector; job-seekers choose whether or not to invest in education and skill depending on the expected wages in the two sectors. The conclusions are that the least able entrepreneurs set up underground firms, employ unskilled labour, and do not contribute to growth. Underground employment alleviates unemployment only if the monitoring rate is sufficiently low. Policies for entrepreneurship and monitoring would help both economic growth and employment.

Entrepreneurial earnings and entrepreneurial choice in a search and matching model of the labor market

Empirical studies show that the monetary returns of entrepreneurship are not high and thus they cannot be the driving force of the individuals decision to start a business. However, it turns out that the entrepreneurial earnings are not low when using a stricter definition of entrepreneurship that rules out the so-called ‘necessity’ or defensive entrepreneurs, thus considering only the ‘offensive’ or bona fide entrepreneurs. Nevertheless, this seemingly straightforward approach may be wrongful, since the benefits that push an individual to become an entrepreneur are both monetary and non-monetary. In order to examine how the entrepreneurial gains affect the choice of entrepreneurship, this theoretical paper develops an extended version of the benchmark macroeconomic model of the labor market (namely, the search and matching model) that incorporates the notions of offensive and defensive entrepreneurs, and distinguishes between the value of an existing firm and the value of a new business. The main result of this paper is that the offensive entrepreneurs are cleverer in the development or management of incumbent firms, while the defensive entrepreneurs could be equally as clever as the offensive entrepreneurs in the creation of new firms.

Homeownership and new entrepreneurs: first empirical evidence of a bidirectional interaction

ABSTRACT Literature linking housing and professional choices focuses on the supply side of the labour market (the search for a job as employee), thus considering the unemployment rate as the only measure of labour market outcomes. Indeed, the usually neglected link between homeownership and entrepreneurship is equally important for assessing labour market performance. This empirical article represents one of the first attempts to test the interplay between homeownership and (new) entrepreneurs. Effectively, using a panel data analysis in Italy, we find a first empirical evidence of a positive and bidirectional interaction between homeownership and new entrepreneurs (precisely, small businesses and the self-employed).

Prezzi edonici delle caratteristiche abitative e analisi di regressione multipla: suggerimenti pratici per la stima

La teoria dei prezzi edonici - unanimemente riconosciuta come la teoria economica di riferimento per il mercato delle abitazioni - suggerisce di stimare i prezzi delle caratteristiche abitative attraverso l’analisi di regressione multipla. Tale tecnica statistica, infatti, riduce al minimo i margini di soggettivita (inevitabilmente) presenti nelle procedure di valutazione. Tuttavia, l’applicazione empirica del metodo edonico e tutt’altro che semplice, e questo vale a prescindere dalla disponibilita di una base-dati sufficientemente ampia. Infatti, tre importanti problemi vanno affrontati prima di procedere nella stima dei prezzi edonici: l’individuazione della piu adeguata forma funzionale (il tipo di relazione esistente tra prezzo dell’immobile e caratteristiche); la scelta delle caratteristiche da includere nell’analisi, compresa la loro trasformazione in caso di variabili qualitative ordinabili; la verifica economico-statistica dei risultati conseguiti, in modo da consentire un confronto tra modelli alternativi. Nel passare dai modelli edonici alla loro stima tramite l’analisi di regressione multipla, il presente lavoro sviluppa una strategia empirica, applicata a un caso di studio riguardante il mercato immobiliare italiano, in grado di offrire utili suggerimenti per affrontare adeguatamente i problemi in precedenza menzionati.

Estimating the housing price with a search-and-matching model

Purpose – This paper aims to pose an important starting point for the application of the search-and-matching models to real estate appraisals, thus reducing the “gap” between practitioners and academicians. Due to relevant trading frictions, the search-and-matching framework has become the benchmark theoretical model of the housing market. Starting from the large related literature, this paper develops a simplified approach to modelling the frictions that focuses on the direct relationship between house price and market tightness (a common feature only for the labour market matching models). The characterization of the equilibrium through two main variables simplifies the analysis and allows using the theoretical model for empirical purposes, namely, the real estate appraisals. Design/methodology/approach – This work is both theoretical and empirical. Theoretically, a long-run equilibrium model with a positive share of vacant houses and home seekers is determined along with price and market tightness. Als...