Luca Pieroni

MILITARY EXPENDITURE AND ECONOMIC GROWTH

This paper tests the relationship between military expenditure and economic growth by including the impact of the share of military and civilian components of government expenditure in an economic growth model with endogenous technology. In this framework, we empirically consider the hypothesis of a non‐linear effect of military expenditure on economic growth. Differences between the costs and benefits of the defence sector has traditionally explained the non‐linear relationship suggesting that shocks to insecurity may also be a source of non‐linearity as they determine a re‐allocative effect within government expenditure. While parametric partial correlations are in line with empirical findings, the robustness of estimations is tested by using a non‐parametric approach. The negative relationship between military expenditure and growth in countries with high levels of military burden predicted by theory becomes significant only after including a proxy for re‐allocative effects in the growth equation.

A regression model for the start of the pollen season in Olea eropaea

The relationship between the timing of olive pollination and some parameters which can influence this phenomenon was investigated. A model is presented which shows a strong relationship between timing of pollination, selected meteorological variables (temperature and precipitation) and annual pollen quantity. The most important correlations are with mean temperature in February, and precipitation in May. The positive correlation with annual pollen quantity confirms the relationship of this variable to the time of pollination.

A New Approach to Consider the Pollen Variable in Forecasting Yield Models1

Methods for forecasting harvest yields have been improved considerably in the last 20 years with the development of new data survey (remote sensing) and statistical techniques. One of these methods, based on pollen release in the atmosphere, is especially important for anemophilous species such as olive. The aim of the present work is to use a different approach to forecast the olive harvest by considering the pollen variable as “endogenous” because it is involved in the consequential processes from the formation of pollen to fruiting, the complex of which determines, more or less, the final production. Unlike models built upon a single equation (multiple linear regression analysis), the proposed estimate, based on an incomplete system of equations, recovers the consistency associated with the inference of parameters while avoiding the errors of “over-estimation.” The study, based on 17 years of data considers the quantity of olive pollen monitored and the relative annual olive production in addition to climatic, agronomic, and pathological variables associated with production. The harvest forecast provides the possibility for planning and optimizing the various stages of olive production from cultivation to distribution, including sound management of the olive supply.RésuméPendant les vingt dernières années les méthodes de prévision des rendements de récolte ont été considérablement améliorées grâce au développement de nouvelles techniques statistiques et d’ enquête des données (télédétection). Parmi ces méthodes celle basée sur l’émission du pollen dans l’atmosphère se révèle particulièrement importante pour les espèces anémophiles comme l’olivier. Le but de ce travail est celui d’arriver à employer une méthode différente dans la prévision des rendements de récolte de l’olivier, le tout en considérant comme “endogène” la variable pollen. Ce dernier est, en effect, impliqué dans les processus d’évolution qui vont de sa formation à la fructification, de manière à déterminer la production finale. Contrairement aux modèles établis sur une équation simple (analyse multiple de régression linéaire), l’évaluation proposée, basée sur un système inachevé d’équations, récupère la consistance connexe à l’ inférence des paramètres tout en évitant les erreurs de “surestimation”. L’étude, basée sur dix-sept ans de données, considère la quantité de pollen d’olivier détectée et conséquemment la production oléicole annuelle, outre aux variables climatiques, agronomiques et pathologiques liées à la production. Les modèles de prévision offrent la possibilité de rationaliser les différentes phases de la filière oléicole en optimisant les procédés, de la production à la distribution, y compris la gestion rationnelle des stocks.

CORRUPTION, MILITARY SPENDING AND GROWTH

This paper considers the effect of corruption and military spending on economic growth, analysing both the direct impact of public spending and the effect of allocating resources between categories of public spending within the framework of an endogenous growth model. The model exhibits non-linearities as a result of the links between the components of public spending, corruption and economic growth. The main findings of the empirical analysis confirm the expectation that corruption and military burden lower the growth rate of gross domestic product per capita. They also suggest that when the effect of the complementarity between military spending and corruption is omitted, as in most studies, the impact of military burden on economic performance is underestimated.

The role of anti-smoking legislation on cigarette and alcohol consumption habits in Italy.

The short-term effects of public smoking bans on individual smoking and drinking habits were investigated in this paper. In 2005, a smoking ban was introduced in Italy, and we exploited this exogenous variation to measure the effect on both smoking participation and intensity and the indirect effect on alcohol consumption. Using data from the Everyday Life Aspects survey, for the period 2001-2007, we show that the introduction of smoke-free legislation in Italy significantly affected smoking behavior. We also document significant indirect effects on alcohol consumption for the main alcoholic beverage categories. A robustness analysis is also performed, to test the extent to which unobservable variables may bias our estimated parameters. Our results are then used to perform a cost-effectiveness analysis of the anti-smoking legislation in Italy.

Food prices and overweight patterns in Italy

In this paper, we examine the role of relative food prices in determining the recent increase in body weight in Italy. Cross-price elasticities of unhealthy and healthy foods estimated by a demand system provide a consistent framework to evaluate substitution effects, when a close association is assumed between unhealthy (healthy) foods and more (less) energy-dense foods. We used a dataset constructed from a series of cross-sections of the Italian Household Budget Survey (1997–2005) to obtain the variables of the demand system, which accounts for regional price variability. The relative increase in healthy food prices was found to produce nontrivial elasticities of substitution towards higher relative consumption of unhealthy foods, with effects on weight outcomes. In addition, these changes were unevenly distributed among individuals and were particularly significant for those who were poorer and had less education.

Habits, Complementarities and Heterogeneity in Alcohol and Tobacco Demand: A Multivariate Dynamic Model

In this paper we test the existence of forward-looking behaviour in a multivariate model for alcohol and tobacco consumption. The theoretical framework, based on a dynamic adjustment cost model with forward-looking behaviour, is enhanced to include the intertemporal interactions between the two goods. The analysis of the within-period preferences completes the intertemporal model, allowing to evaluate the static substitutability/complementarity relationships. The empirical strategy consists in a two-step estimation procedure. In a first stage, we obtain the parameters of the demand system, while in a second stage Euler equations are estimated. Results, based on a cohort data set constructed from a series of cross-sections of the Italian Household Budget Survey, reveal a significant complementarity relationship between alcohol and tobacco. Estimation of the Euler equations does not lead to rejection of the hypothesis of intertemporal dependence, providing evidence for a forward-looking behaviour in alcohol and tobacco consumption. Moreover, we find significant intertemporal interactions that support the adjustment cost setting in a multivariate model with rational expectations.

Does Military Spending Matter for Long-run Growth?

Abstract The effects of military spending has on the economy continues to be a subject of considerable debate, with a lack of consensus in the literature. This paper takes advantage of the Stockholm International Peace Research Institute extended data-set to contribute to the debate using empirical methods made available, or more applicable, by the extra observations. It constructs a large panel of countries for the period 1970–2014 to explore the long-run equilibrium relationship between military spending and economic growth, applies the more flexible pooled mean group estimator, and compares the results with the more restrictive dynamic fixed effect method used in earlier influential studies. It also compares results from different time and country samples. Across the specifications it finds a significant and persistent negative effect of military burden on economic growth that is robust across different country groups, with the largest impact being for OECD countries.

Aluminium Market and the Macroeconomy

We propose and test a structural model of the interaction between the aluminium market and the macroeconomy incorporating the rational expectations hypothesis. Based on a competition a la Cournot, our model predicts that aluminium spot price and inventories will respond to macroeconomic shocks to line up supply to the demand level. The model also includes incomplete adjustments to shocks that occur near the delivery date of futures contracts with the implication of a likely high persistence in the aluminium spot price. Estimation results show that the aluminium price is significantly affected by the real exchange rate, while the influence of the real interest rate is small. We argue that this result is largely expected once we consider the peculiar features of the aluminium market. Further support to this view is provided by the large persistence of the aluminium price response to its own shock and by the negligible contribution of stockholdings innovations to the price forecast error variance. Finally, macroeconomic shocks explain on the whole a relevant share of the aluminium market variables forecast error variance.

Does Cigarette Smoking Affect Body Weight? Causal Estimates from the Clean Indoor Air Law Discontinuity

This paper examines the causal effect of smoking on body weight in Italy. We take advantage of the discontinuity in smoking habits introduced by the Italian smoking ban in 2005. Our estimates indicate that the ban reduced smoking intensity by half a cigarette per day and smoking participation rate by 2 percentage points. We estimate a significant effect on body weight of about 1 kg. Heterogeneous effects are also found, highlighting a smaller impact on men, employees and overweight and obese people. Most of the weight variations are attributed to quitting smoking, whereas reductions in cigarette consumption are not significant.