Problem Of Unobserved Heterogeneity Research Articles

The quasi-xgamma frailty model with survival analysis under heterogeneity problem, validation testing, and risk analysis for emergency care data.

Frailty models are important for survival data because they allow for the possibility of unobserved heterogeneity problem. The problem of heterogeneity can be existed due to a variety of factors, such as genetic predisposition, environmental factors, or lifestyle choices. Frailty models can help to identify these factors and to better understand their impact on survival. In this study, we suggest a novel quasi xgamma frailty (QXg-F) model for the survival analysis. In this work, the test of Rao-Robson and Nikulin is employed to test the validity and suitability of the probabilistic model, we examine the distribution's properties and evaluate its performance in comparison with many relevant cox-frailty models. To show how well the QXg-F model captures heterogeneity and enhances model fit, we use simulation studies and real data applications, including a fresh dataset gathered from an emergency hospital in Algeria. According to our research, the QXg-F model is a viable replacement for the current frailty modeling distributions and has the potential to improve the precision of survival analyses in a number of different sectors, including emergency care. Moreover, testing the ability and the importance of the new QXg-F model in insurance is investigated using simulations via different methods and application to insurance data.

Do Corporate Social Responsibility and International Financial Reporting Standards Implementation Matter?

This investigation examines how Pakistani banks listed on stock markets fare when International Financial Reporting Standards (IFRS) are implemented and Corporate Social Responsibility (CSR) activities are carried out. This study compares the financial performance of banks over a 3-year period before and following the introduction of IFRS, using a sample of all 22 banks listed on the Pakistan Stock Exchange. To address endogeneity and unobserved heterogeneity problems, the Generalized Method of Moments (GMM) is adopted. This study reveals that the implementation of IFRS has a favorable and considerable effect on the performance of the banks. CSR has a substantial impact on ROE but has a relatively smaller effect on ROA. We discovered that the performance indicators, such as BV and EPS, have little bearing on stock return of firms in the banking sectors. The MV of stock has dropped with the increasing standard of financial reporting, but the effect of COVID-19 cannot be ignored. The study reveals that IFRS implementation affects bank performance, while CSR significantly impacts ROE. IFRS adherence enhances performance, while CSR initiatives benefit stakeholders and contribute to social welfare and sustainable development.

Does COVID-19 pandemic spur digital business transformation? Evidence from selected MENA countries

PurposeIn the light of high reliance on digital technology to mitigate the consequences of the coronavirus disease 2019 (COVID-19) pandemic and its containment measures, this study investigates the factors influencing firms' decision to adopt digital technologies during COVID-19 in four Middle East and Northern African (MENA) countries, namely, Egypt, Jordan, Morocco and Tunisia.Design/methodology/approachThe study used the International Labour Organization (ILO)/Economic Research Forum (ERF) COVID-19 - MENA Monitor Enterprise Survey (CMMENT), comprising 5,480 firms, surveyed during 2020–2021. The empirical model is estimated using the linear probability model (LPM) to address the problem of unobserved heterogeneity between firms, countries, and time.FindingsThe results revealed that firm characteristics, such as firm size and foreign ownership, encourage digital transformation in the business sector. Moreover, firms that face challenges during the pandemic, comply with the containment measures, and receive government assistance are more likely to adopt digital solutions. Furthermore, the results indicated that firms operating in services sector have a higher likelihood to adopt digital technology. Disaggregating the total sample into several sub-samples, the results are robust across countries and technology types, supporting the initial hypothesis that COVID-19 encourages digital transformation in the MENA region.Originality/valueThe study has numerous contributions. First, to the best of the authors' knowledge, this is the sole study that uses micro data collected during the COVID-19 to examine the factors influencing firms' decision to adopt and invest in digital solutions in the MENA countries. Second, the paper employs the LPM estimator to address the issue of unobserved heterogeneity between firms, countries and time. Finally, the paper offers some practical recommendations for accelerating digital transformation in MENA region.

Accounting for heterogeneity in the measurement of hospital performance

ABSTRACT As the Corona pandemic of 2020 has shown, disposing of sufficient hospital capacity is of great importance. Ideally, this capacity should be provided by efficient units, calling for measurement of their performance. However, the standard cost frontier model yields biased efficiency scores because it ignores (often unobserved) heterogeneity between hospitals. In this paper, efficiency scores are derived from a cost function with both random intercept and random slope parameters which overcomes the problem of unobserved heterogeneity in stochastic frontier analysis. Based on an unbalanced panel covering the years 2004 to 2007 and comprising at least 100 Swiss hospitals per year, Bayesian inference points to significant heterogeneity suggesting rejection of the standard cost frontier model. When unobserved heterogeneity is fully accounted for, average estimated inefficiency decreases to 5%, below the 14% (21%, respectively) value reported for a number of European and Middle-Eastern countries (Hollingsworth, 2008; Alawi et al. 2019). Moreover, hospitals rated below 85% efficiency according to the standard model gain up to 12% points. They can provide much needed capacity that otherwise would be discarded on the grounds that they are not sufficiently efficient providers.

The relationship between leisure-time physical activity and job satisfaction: A dynamic panel data approach.

Previous research has documented a positive effect of leisure-time physical activity (LTPA) on life satisfaction. The relationship between physical activity and the specific domain of job satisfaction is, however, relatively unknown. This study aims to investigate the effects of different frequency levels of LTPA on self-reported job satisfaction and specifically focuses on the two mechanisms of health and recovery from work stress. Using data from the German Socio-Economic Panel (2001-2019), fixed effects and dynamic panel data regression models are estimated to address the problems of unobserved heterogeneity and reverse causality. A mediation and sub-sample analysis shed light on the role of health and work stress. The results reveal that weekly LTPA has a positive effect on job satisfaction and that health represents a channel yielding those benefits. The effect appears to be moderated by work stress. Further, the analysis reveals the importance of considering unobserved heterogeneity and reverse causality when studying this relationship. The findings indicate a positive relationship between regular LTPA and job satisfaction and add plausible causal evidence to the limited literature in this context. The findings yield implications for employers and employees.

The Effect of Working Capital Management on the Performance of the Textile Firms: Evidence from Fragile Five Countries (FFCs)

An effective working capital can contribute to achieving the firm’s financial profitability, increasing the value of companies, creating a short-term financing source, continuing their activities and increasing their sustainability. This study examines the effect of working capital management on firm performances (ROA and TOBIN's Q) of firms operating in the textile industry in 4 countries (Brazil, India, Indonesia and Turkey) called the Fragile Five countries between 2010 and 2020. In the estimation of the coefficients of the panel regression models determined in this study, the Driscoll-Kraay estimator, which is robust against the problems of unobserved heterogeneity, autocorrelation, varying variance and cross-section dependence, was used. In the general evaluation of the panel data analysis estimation results, it is seen that the effect of working capital management on financial performance differs significantly depending on the selected performance variable. All of these results show that successful and effective working capital management in the textile sector depends on taking into account the differences in economic conditions, differences in capital markets, financial market performance and daily working habits, and evaluating each component of working capital separately.

Financial Sector Development and the Preference for Informal Remittance Channels: Evidence from Bangladesh

The potential socioeconomic benefits of remittances remain untapped as a large portion of remittances is transferred through informal channels worldwide. In this paper, we explored the effect of the financial sector development in the home country on the preference for informal remittance channels using a nationally representative household dataset from Bangladesh along with subdistrict level data on bank branches. However, the identification of the effect of the banking network on the choice of remittance channel is challenging due to the unobserved heterogeneity problem. We circumvent this problem by using an instrumental variable (IV) approach. We found that greater accessibility to the banking network at the subdistrict level significantly reduces the use of the informal remittance transfer channels: a 10% increase in the availability of the total number of bank branches reduces the probability of using the informal channels, at least once, by 1.79% and hundi by 2.3% on average. The results are consistent and robust across different specifications and estimation methods. The main policy implication of this result is that the expansion of bank branches can enhance the inflows of remittances through formal channels and thereby can magnify the macroeconomic benefits of remittances globally.

Impact of Cash Holding on Firm Performance with Moderating Role of Corporate Governance

The main aim of this research is to analyze the association between cashholding and firm performance with moderating role of corporate governance. For the purpose of analysis, secondary data of 145 non-financial firms listed at Pakistan Stock Exchange (PSX) is taken from 2006-2017. The dynamic Generalized Method of Moments (GMM) is applied to cater the problem of unobserved heterogeneity. The results of this study suggest that cash holding has a significant impact on firm performance. Moreover, corporate governance significantly moderates the relationship between cash holding and firm performance.

Treatment-seeking behaviour among persons with chronic diseases in Ghana: Does national health insurance status matter?

ABSTRACT This paper examines the effect of national health insurance on the choice of healthcare facility among diabetic and hypertensive patients in Ghana. The data for this paper came from a secondary source, and the conditional mixed processing approach was utilised to investigate the influence of health insurance status on healthcare facility choice among diabetic and hypertension patients. The study reveals that when compared with uninsured individuals suffering from hypertension/diabetes, insured individuals are more likely to attend formal healthcare facilities and herbal clinics/hospitals and less likely to attend traditional/spiritual healing centres instead of chemical shop/self-care. This work addresses the problem of unobserved heterogeneity (selection bias) by employing the conditional mixed processing approach to account for the potential that health insurance is endogenous to the choice of healthcare facility, which if not accounted for might lead to biased estimates.

The Impact of Female Directors on Board, and Female CEO on Firm Performance: Empirical Evidence from Emerging Economy

Purpose: As per agency theory prospective, board gender diversity enhances the corporate leadership structure which mitigates agency conflicts among stakeholders. Therefore, this study investigates the impact of female directors on board, and female CEOs on firm performance. We also uses board size, and board independence as board level control, while leverage, firm size, capital expenditure & tangibility as firm level control.
 Design/Methodology/Approach: The study uses a panel data starting from 2005 to 2020 on annual basis. To resolve endogeneity and unobserved heterogeneity problems in panel data analysis, study uses static (fixed effect, & random effect) and dynamic (GMM) estimation techniques in Pakistan.
 Findings: Result shows the positive impact of female directors on board and female CEOs on firm performance. These findings are robust under alternative measures of firm performance.
 Implications/Originality/Value: The study suggests that female representation and female CEOs are the important attributes to enhance firm performance. Additionally, females are performing a significant role through monitor and control for excellent corporate leadership structure. Furthermore, this is the first study of its kind which analyzes this relationship in the emerging equity market of Pakistan.

Returns on Investment in Education: Evidence from Turkey by Education Level and by Higher Education Program

This paper estimates private and social returns on investment in education in Turkey, by level of educa¬tion and by higher education program, using the 2008-2016 Household Labor Force Survey and Income and Living Conditions Survey panel datasets. The paper uses panel econometrics with the Hausman-Tay¬lor and instrumental variable methods dealing with the endogeneity and unobserved heterogeneity problems. The private returns on investment in higher education tend to be higher as compared to the private returns on investment in non-tertiary education. The results indicate that the private returns on investment from various higher education programs are signifcantly different across various higher ed¬ucation programs. Based on the empirical fndings, a number of policy recommendations are developed.

Are skewed sex ratios associated with violent crime? A longitudinal analysis using Swedish register data

There is widespread concern in both the popular and academic literature that a surplus of men in a population intensifies mating competition between men, particularly unpartnered men, resulting in increased violence towards both men and women. Recent contributions challenge this perspective and argue that male mating competition and levels of violence will be higher when sex ratios are female-skewed. Existing empirical evidence remains inconclusive. We argue that this empirical ambiguity results from analyses of aggregate-level data, which put inferences at risk of ecological fallacies. Our analysis circumvents such problems by using individual-level, longitudinal demographic register and police data for the Stockholm metropolitan area, Sweden (1990–2003, n = 758,498). These data allow us to investigate the association between municipality-level sex ratios and violent offending (homicide, assault, threat, and sexual crimes) while adjusting for sociodemographic factors. Results suggest that aggregated offending rates are negatively associated with male-skewed sex ratios, whereas individual-level violent offending correlates positively with male-skews. We find that the more-men-more-violence association holds particularly for male violence against other men , but is insignificant for violence against women . Moreover, the association is significant among childless men, but not among fathers. However, robustness checks question the causality of these associations. Female violent offending is positively, albeit due to a low number of cases, insignificantly associated with male-skews. Moreover, both male and female non-violent offending is higher in male-skewed municipalities. We discuss the implications with regard to the theoretical debate and problems of unobserved heterogeneity in the sex ratio literature.

An analysis of risk factors associated with road crash severities in Namibia

Road crash is a leading cause of death and disabilities in Namibia and other developing countries. Based on recent trends, the World Health Organization indicated that progress to realize Sustainable Development Goal (SDG) target 3.6 – which calls for a 50% reduction in the number of road traffic deaths by 2020 – remains far from sufficient. To contribute to efforts in reducing road fatalities in Namibia, this study examined risk factors associated with the severity of crashes recorded in the country. Mixed logit modelling methodology was adopted to address the problem of unobserved heterogeneity in injury severity analysis. Model estimation results reveal that collision with pedestrians, head-on collisions, ran-off road collisions and crashes involving high occupancy passenger vehicles were more likely to result in fatalities and severe injuries. The findings and recommendations of this study are expected to enhance countermeasure implementation to reduce road crashes in Namibia.

Predictive behaviour of maternal health inputs and child mortality in West Bengal – An analysis based on NFHS-3

The well-being of both the mother and the child determines the health of the next generation. This in turn can predict future public health challenges that the health care system of an economy would be concerned with. Hence, we should be more concerned with antenatal and postnatal care, which are in fact complementary in nature. The birth of a child just coexists in between this transitionary gap. Our paper uses NFHS-3 data for an Indian state – West Bengal - to examine the related socioeconomic factors that may have pronounced effects on the demand for maternal health inputs like pre-natal care and choice of place of delivery. Concurrently we also check the effects on child mortality. We believe that this would help the policy makers to identify the areas to stress upon in order to pave the way for the formation of good quality human capital in the long run. Another distinguishing feature of this paper is the use of joint estimation technique that solves the unobserved heterogeneity problem which is commonly present in this kind of research. In most of the cases, the usage of this technique is not resorted. The place of residence, standard of living, and women's educational level are found to have an increasing effect on the demand for prenatal care and hospital delivery. However, a more relevant analysis should never ignore the dimension of child mortality. There we find hospital delivery to be effective to reduce child mortality. Mothers' age, religion, occupation, participation in household decision making process, and child's birth order are other important predictors of child mortality.

Which factors contribute to loneliness among older Europeans? Findings from the Survey of Health, Ageing and Retirement in Europe: Determinants of loneliness

BackgroundWhile previous studies have examined the determinants of loneliness (i) using a longitudinal approach and (ii) using data from nationally representative samples, only few studies have done both at once. Hence, the purpose of our study was to clarify which factors are associated with loneliness longitudinally based on nationally representative data. MethodsData were taken from wave 5 to 7 of the “Survey of Health Ageing, and Retirement in Europe “(SHARE; covering 27 European countries and Israel in total) (in our analytical sample, n = 101,909 observations). Loneliness was assessed using the three-item loneliness scale. As explanatory variables, we included age, marital status, income, self-rated health, depressive symptoms, functional decline, cognitive functioning and chronic diseases. Exploiting the features of panel data and mitigating the problem of unobserved heterogeneity, linear FE regressions were used. ResultsFE regressions showed that loneliness increased with increasing age (β = .02, p < .001), changes from married and living together with spouse/registered partnership to another marital status (β=-.71, p < .001), decreases in log income (β=-.01, p < .05), worsening self-rated health (β = .04, p < .001), functional decline (β = .09, p < .001), increases in depressive symptoms (β = .13, p < .001) and decreases in cognitive functioning (β=-.01, p < .001), whereas it was not associated with changes in chronic diseases. ConclusionOur longitudinal study based on nationally representative SHARE data contributed to identify the determinants of loneliness among older Europeans using panel data methods. Tackling the identified risk factors may assist in avoiding loneliness in older adults living in Europe.

Self-perceptions of ageing, GP visits and frequent attendance. Longitudinal findings from the German Ageing Survey

Objectives The aim of this study was to clarify the link between self-perceptions of ageing and the number of general practitioner (GP) visits, as well as frequent GP visits, longitudinally. Methods In this study, longitudinal data with n = 7,062 observations from 2014 (wave 5) to 2017 (wave 6) were taken from the German Ageing Survey (representative sample of middle aged and older individuals residing in private households). The five-item Attitudes Toward Own Ageing subscale of the Philadelphia Geriatric Center Morale Scale (PGCMS) was used to quantify self-perceptions of ageing. The frequency of GP visits in the past 12 months served as outcome measure (first model: measured continuously; second model: top 10% were defined as frequent attenders). To exploit the features of panel data, and to mitigate the problem of unobserved heterogeneity, fixed effects regressions were used. Results Adjusting for predisposing characteristics, enabling resources and need-factors, regressions showed that an increase in self-perceptions of ageing was associated with decreases in the number of GP visits (IRR= .83 (95% CI: .77-.91)), and a decreased likelihood of becoming a frequent attender (OR= .44 (95% CI: .29-.66)). Conclusions Using data from a longitudinal study and exploiting the longitudinal data structure, the current study adds to our current knowledge by demonstrating that self-perceptions of ageing contribute to the frequency of GP visits as well as frequent attendance. Since self-perceptions of ageing are modifiable, this may help to manage health care use.

Modelling Unobserved Heterogeneity in Claim Counts Using Finite Mixture Models

When modelling insurance claim count data, the actuary often observes overdispersion and an excess of zeros that may be caused by unobserved heterogeneity. A common approach to accounting for overdispersion is to consider models with some overdispersed distribution as opposed to Poisson models. Zero-inflated, hurdle and compound frequency models are typically applied to insurance data to account for such a feature of the data. However, a natural way to deal with unobserved heterogeneity is to consider mixtures of a simpler models. In this paper, we consider k-finite mixtures of some typical regression models. This approach has interesting features: first, it allows for overdispersion and the zero-inflated model represents a special case, and second, it allows for an elegant interpretation based on the typical clustering application of finite mixture models. k-finite mixture models are applied to a car insurance claim dataset in order to analyse whether the problem of unobserved heterogeneity requires a richer structure for risk classification. Our results show that the data consist of two subpopulations for which the regression structure is different.

Victimization and Its Consequences for Well-Being: A Between- and Within-Person Analysis

ObjectivesWe examined the effects of victimization on several aspects of well-being in a longitudinal study of a general population sample. Previous research has often been inconclusive, as it was largely based on cross-sectional data and prone to problems of unobserved heterogeneity and selection bias. We examined both between-person differences and within-person changes in well-being in relation to property and violent victimization. We investigated psychological and behavioral dimensions of well-being, controlling for and comparing with the effects of other negative life events.MethodsWe used data from a two-wave panel survey of 2928 respondents aged 25–89 nested in 140 neighborhoods in two large German cities. We applied random-effects modeling to separate between-person from within-person effects.ResultsThe within-person detrimental effects of victimization were considerably smaller than between-person effects, which reflected preexisting, time-stable factors that distinguish individuals who have experienced victimization from individuals who have not. Detrimental effects concerned fear of crime, generalized trust, and neighborhood satisfaction, but did not extend to emotional well-being or life satisfaction, in contrast to other negative life events. We found empirical support both for adaptation (‘recovery’) effects as well as for anticipation effects. Violent victimization had stronger effects than property victimization, and victimization near the home had stronger effects than victimization elsewhere.ConclusionThe findings indicate that violent victimization has palpable detrimental effects on security perceptions, trust and neighborhood satisfaction—but not on emotional well-being and life satisfaction—and that individuals largely recover from the victimization within 18 months.

Perceived social isolation and cognitive functioning. Longitudinal findings based on the German Ageing Survey.

There is a lack of longitudinal studies, which are both based on nationally representative samples and use standardized instruments to quantify social isolation. Thus, the purpose of this study was to determine the link between perceived social isolation and cognitive functioning longitudinally. Longitudinal data with n = 6420 from 2014 (wave 5) to 2017 (wave 6) were drawn from the German Ageing Survey (nationally representative sample of individuals aged 40 years and over). Perceived social isolation was assessed using a scale by Bude and Lantermann. Cognitive functioning was quantified using the established digit symbol test. To reduce the problem of unobserved heterogeneity, linear fixed effects regressions were used. Regressions showed that increases in perceived social isolation were associated with decreases in cognitive functioning. With regard to covariates, decreases in cognitive functioning were associated with increases in aging and worsening self-rated health, whereas changes in marital status, employment status, income, physical functioning, and physical illnesses were not associated with the outcome measure. Based on a nationally representative sample and exploiting the panel data structure, the study findings extend current knowledge by showing that increasing perceived social isolation contributes to decreases in cognitive functioning among individuals aged 40 years and over longitudinally. Future longitudinal studies based on panel data methods are required to validate the study findings.

International Co-movements and Business Cycles Synchronization Among Advanced Economies: A SPBVAR Evidence

This paper provides new empirical insights in order to give a relevant contribution to the more recent literature on international transmission of shocks and on business cycles synchronization across developed economies, with a particular emphasis in the most recent recession and post-crisis consolidation. Interdependence, commonality and heterogeneity in macroeconomic-financial linkages are also identified in order to depict the perplexed nature of modern economies. A time-varying Structural Panel Bayesian Vector Autoregression (SPBVAR) model is developed to deal with model misspecification and unobserved heterogeneity problems when studying multicountry dynamic panels. The results argue for significant synchronization behind a relevant consolidation without delay. Additionally, consolidation is needed to underpin confidence in fiscal solvency at the country level and prevent adverse international externalities. My evidence calls for more integrated macroprudential and financial stability policies. It also shows that, when formulating policies or forecasting, additional transmission channels and economic-institutional issues through which fiscal contractions influence the dynamics of the GDP growth need to be accounted for in muticountry setups.