This paper develops a real option model in which the interaction between debt, liquidation policy and risky investments is studied. We consider a manager who owns the firm and faces the opportunity to invest in risky pro jects which may bo ost current profits at the cost of bankruptcy if they...

This paper investigates the effectiveness of development strategies for tourism destinations. We show that resource investments unambiguously increase tourism revenues and that increasing the degree of tourism sophistication, that is increasing the variety of tourism related goods and services,...

The effects of four environmental policy options for the reduction of pollution emissions, i.e. taxes, emission standards, auctioned permits and freely allocated permits, are analyzed. The setup is a real option model where the amount of emissions is determined by solving the firm's profit...

We develop a model on the optimal timing of switching from non-renewable to renewable energy sources with endogenous extraction choices under emission taxes, subsidies on renewable resources and abatement costs. We assume that non-renewable resources are "dirty" inputs and create environmental...

A weighting scheme is proposed to construct a new index of environmental quality based on greenhouse gas (GHG) emissions for different countries using an approach that relies on consistent tests for stochastic dominance (SD) efficiency. The benchmark is an index that is based on the average...

This paper contributes to the debate on alternative corporate tax schemes, employing a rigorous real option methodology which has never been used to study both liquidation policy and taxation. Different tax systems are considered, according to whether the tax regime is progressive or flat and...

We propose a new method to assess sovereign risk index in Eurozone countries using an approach that relies on consistent tests for stochastic dominance efficiency. The test statistics and the estimators are computed using mixed integer programming methods. The ranking of countries is performed...

An optimal weighting scheme is proposed to construct a new index of environmental quality for different countries using an approach that relies on consistent tests for stochastic dominance efficiency. The test statistics and the estimators are computed using mixed integer programming methods....

This paper develops a novel and efficient algorithm for Bayesian inference in inverse Gamma Stochastic Volatility models. It is shown that by conditioning on auxiliary variables, it is possible to sample all the volatilities jointly directly from their posterior conditional density, using simple...

This paper revisits the influential work by Chetty, Hendren, Kline, and Saez (2014) who attempt to explain the variation in intergenerational mobility across commuter zones in the US (i.e., spatial mobility) using nine classes of variables. We employ Bayesian model averaging methods that allow...