Attachment of wage as a way for creditors to enforce payment by unwilling or insolvent debtors is not very successful in several countries. Based on a dynamic model of debtor behaviour, this paper explores two alternatives of reform. One is to reduce the rate of attachment, which at present amounts to 100 percent of the wage income exceeding the subsistence level, thus probably destroying incentives to work. According to model simulations, reducing the attachment rate is likely to result in an increase of labour supply but a decrease of attachment revenue per period. Second, the introduction of a debt release would have an ambiguous effect on labour supply. While resulting in a partial loss for creditors, it would permit debtors to get out of debt. A Pareto improvement thus does not seem to be possible. When taking the taxpayers as an involved third party into account, however, a potential Pareto improvement appears attainable.
Die vorliegende Untersuchung wurde ermöglicht durch das vom Bundesamt für Energiewirtschaft finanzierte Projekt „Auswirkungen einer grenzkostenorientierten Tarifrevision auf die Elektrizitätsnachfrage“. Wir danken dem Bundesamt für Energiewirtschaft, dem Bundesamt für Statistik sowie den Elektrizitätswerken der Städte Zürich, Bern und Basel für die tatkräftige Unterstützung des Projekts.
This paper shows that a small amount of individual-level money illusion may cause considerable aggregate nominal inertia after a negative nominal shock. In addition, our results indicate that negative and positive nominal shocks have asymmetric effects because of money illusion. While nominal inertia is quite substantial and long lasting after a negative shock, it is rather small after a positive shock.
This paper develops basic algebraic concepts for instrumental variables (IV) regressions which are used to derive the leverage and influence of observations on the 2SLS estimate and compute alternative heteroskedasticity-consistent (HC1, HC2 and HC3) estimators for the 2SLS covariance matrix in a finite-sample context. Monte Carlo simulations and applications to growth regressions are used to evaluate the performance of these estimators. The results support the use of HC3 instead of White’s robust standard errors in small and unbalanced data sets. The leverage and influence of observations can be examined with the various measures derived in the paper
Due to the mixed empirical evidence bearing on the economic determinants, beliefs have been at the center of attention of research into preferences for income redistribution. We elicit preferences for income redistribution through a Discrete Choice Experiment performed in 2008 in Switzerland and relate them to several behavioral determinants, in particular to religious beliefs. Estimated marginal willingness to pay (WTP) is positive among those who do not belong to a religious denomination, and negative otherwise. However, the marginal WTP is shown to increase with a higher degree of religiosity. Moreover, those who state that luck or connections play a crucial role in determining economic success exhibit significantly higher WTP values than those who deem e?ort to be decisive
This article assesses how the form of the utility function in discrete-choice experiments (DCEs) affects estimates of willingness-to-pay (WTP). The utility function is usually assumed to be linear in its attributes. Non-linearities, in the guise of interactions and higher-order terms, are applied only rather ad hoc. This paper sheds some light on this issue by showing that the linear utility function can be a risky choice in DCEs. For this purpose, a DCE conducted in Switzerland to assess preferences for statutory social health insurance is estimated in two ways: first, using a linear utility function; and second, using a non-linear utility function specified according to model specification rules from the econometrics and statistics literature. The results show that not only does the non-linear function outperform the linear specification with regard to goodness-of-fit, but it also generates significantly different WTP. Hence, the functional form of the utility function may have significant impact on estimated WTP. In order to produce unbiased estimates of preferences and to make adequate decisions based on DCEs, the form of the utility function should become more prominent in future experiments.
The usual decomposition of effects in corner solution models into extensive and intensive margins is generally incompatible with a causal interpretation. This paper proposes a decomposition based on the joint distribution of potential outcomes which is meaningful in a causal sense. The difference between decompositions can be substantial and yield diametrically opposed results, as shown in a standard Tobit model example. In a generalized Tobit application exploring the effect of reducing firm entry regulation on bilateral trade flows between countries, estimates suggest that using the usual decomposition would overstate the contribution of the extensive margin by around 15%.
There have been many studies of the volume-outcome relationship. In all of these, the unit of analysis is the hospital or physician. However, this level of analysis is mostly limited to the use of in-hospital mortality rates and is particularly sensitive to selective referral. Moreover, the literature on agglomeration economies highlights the importance of information spillovers within regions (Glaeser, 2010). To overcome these problems, our study is the ?rst that examines the volume-outcome relationship on a regional (county or cancer registry) level. Using data from the National Cancer Institute’s Surveillance, Epidemiology and End Results program we ?nd that regions with relatively more of the same cancer type exhibit relatively better health outcomes.
In a perfectly competitive market with a possibility of technological innovation we contrast guaranteed feed-in tariffs for electricity from renewables and tradable green certificates from a dynamic efficiency and social welfare point of view. Specifically, we model decisions about the technological innovation with convex costs within the framework of a game-theoretic model, and discuss implications for optimal policy design under different assumptions regarding regulatory pre-commitment. We find that for the case of technological innovation with convex costs subsidy policies are preferable over quota-based policies. Further, in terms of dynamic efficiency, no pre-commitment policies are shown to be at least as good as the pre-commitment ones. Thus, a government with a preference for innovation being performed if the achievable cost reduction is high should be in favor of the no pre-commitment regime.
