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DIW Discussion Papers 1699 / 2017
This paper analyzes the dynamic relationship between CO2 emissions, energy consumption, GDP, and trade-openness from 1971 to 2013, based on the Environmental Kuznets Curve (EKC) hypothesis for 70 WTO countries. Using recently developed secondgeneration panel data methods, the empirical results support the EKC hypothesis for the high-, middle-, and lower-income panels used. Concerning the energy consumption ...
2017| Lars Sorge, Anne Neumann
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DIW Discussion Papers 1698 / 2017
This study uses German social security records to provide novel evidence about the heterogeneity in life expectancy by lifetime earnings and, additionally, documents the distributional implications of this earnings-related heterogeneity. We find a strong association between lifetime earnings and life expectancy at age 65 and show that the longevity gap is increasing across cohorts. For West German ...
2017| Peter Haan, Daniel Kemptner, Holger Lüthen
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DIW Discussion Papers 1697 / 2017
This paper characterizes capital taxation and public debt policy in a quantitative macroeconomic model with an impatient government and uncertainty. The government has access to linear taxes on capital and labor, and to non-state-contingent bonds. Government impatience generates positive and empirically realistic longrun levels of both capital taxes and public debt. Prior predictive analysis shows ...
2017| Malte Rieth
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DIW Discussion Papers 1696 / 2017
The informationally simple approach to incentive regulation applies mechanisms that translate the regulator’s objective function into the firm’s profit-maximizing objective. These mechanisms come in two forms, one based on subsidies/taxes,the other based on constraints/ price caps. In spite of a number of improvements and a good empirical track record simple approaches so far remain imperfect. The ...
2017| Mohammad Reza Hesamzadeh, Juan Rosellón, Steven A. Gabriel, Ingo Vogelsang
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DIW Discussion Papers 1695 / 2017
In this paper we propose a new modelling framework for the analysis of macro series that includes both stochastic trends and stochastic cycles in addition to deterministic terms such as linear and non-linear trends. We examine four US macro series, namely annual and quarterly real GDP and GDP per capita. The results indicate that the behaviour of US GDP can be captured accurately by a model incorporating ...
2017| Guglielmo Maria Caporale, Luis A. Gil-Alana
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DIW Discussion Papers 1694 / 2017
This paper examines the day of the week effect in the crypto currency market using a variety of statistical techniques (average analysis, Student's t-test, ANOVA, the Kruskal- Wallis test, and regression analysis with dummy variables) as well as a trading simulation approach. Most crypto currencies (LiteCoin, Ripple, Dash) are found not to exhibit this anomaly. The only exception is BitCoin, for which ...
2017| Guglielmo Maria Caporale, Alex Plastun
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DIW Discussion Papers 1693 / 2017
Economic theory predicts market failure in the market for early childhood education and care (ECEC) due to information asymmetries. We empirically investigate information asymmetries between parents and ECEC professionals in Germany, making use of a unique extension of the German Socio-Economic Panel Study (SOEP). It allows us to compare quality perceptions by parents and pedagogic staff of 734 ECEC ...
2017| Georg F. Camehl, Pia S. Schober, C. Katharina Spiess
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DIW Discussion Papers 1692 / 2017
Motivations to participate in the labour market as well as to invest in labour market skills are crucial for the successful integration of refugees. In this paper we use a unique dataset – the IAB-BAMF-SOEP Refugee Survey, which is a representative longitudinal study of all refugees reported on administrative records in Germany – and analyse which determinants and characteristics are correlated with ...
2017| Peter Haan, Martin Kroh, Kent Troutman
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DIW Discussion Papers 1691 / 2017
We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis suggests that the internet has displaced other media with greater news content (i.e., radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, we find suggestive evidence ...
2017| Alessandro Gavazza, Mattia Nardotto, Tommaso Valletti
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DIW Discussion Papers 1690 / 2017
Based on a life-cycle sustainability assessment and the calculation of carbon abatement costs, we quantify the greenhouse-gas emission reductions and costs if green waste in the metropolitan region of Berlin, Germany, is diverted from composting into the production of hydrothermally carbonized coal (HTC coal) that is used as a substitute for hard coal in the generation of electricity and heat. Depending ...
2017| Jakob Medick, Isabel Teichmann, Claudia Kemfert
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DIW Discussion Papers 1689 / 2017
Carbon leakage is an issue of major interest in both academic and policy debates about the effectiveness of unilateral climate policy addressing global externalities. The debate is particularly salient in Europe, where the EU Emissions TradingSystem (EU ETS) covers emissions of many traded sectors. In a first step, we review how carbon leakage and the pollution haven effect are defined and identified ...
2017| Helene Naegele, Aleksandar Zaklan
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DIW Discussion Papers 1688 / 2017
As from a political economy perspective, politicians often fail to implement structural reforms, we investigate if the resistance to reform is based on the differences in the risk preferences of voters, politicians, and bureaucrats. Based on the empirical results of a survey of the population in Germany, 175 members of the Federal German Parliament (Bundestag), and 106 officials (“bureaucrats”) from ...
2017| Tobias Thomas, Moritz Heß, Gert G. Wagner
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DIW Discussion Papers 1687 / 2017
Both, a high quality of the Early Childhood Education and Care (ECEC) setting and a high quality of the home learning environment foster children’s development. However, we know little about the interactions between ECEC quality and the home learning environment. We examine whether the child’s attendance in a high ECEC quality setting improves the quality of her home learning environment. We use very ...
2017| Susanne Kuger, Jan Marcus, C. Katharina Spiess
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DIW Discussion Papers 1686 / 2017
We model strategic interaction on a market where two labeling organizations compete and firms in duopoly decide which labels to offer. The incumbent label maximizes its own profit, and is challenged by an industry standard which maximizes industry profit. Using a nested logit, the result of this multi-stage game depends crucially on the degree of horizontal differentiation. Joint firm profit always ...
2017| Pio Baake, Helene Naegele
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DIW Discussion Papers 1685 / 2017
In 2008, the European Commission investigated E.ON, a large and vertically integrated electricity company, for the alleged abuse of a joint dominant position by strategically withholding generation capacity. The case was settled after E.ON agreed to divest 5,000 MW generation capacity as well as its extra-high voltage network. We analyze the effect of these divestitures on German wholesale electricity ...
2017| Tomaso Duso, Florian Szücs, Veit Böckers
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DIW Discussion Papers 1684 / 2017
Power systems with increasing shares of wind and solar power generation have higher capital and lower operational costs than traditional technologies. This increases the importance of the cost of finance for total system cost. We quantify how renewable policy design can influence cost of finance by addressing regulatory risk and facilitating hedging. We use interview data on wind power financing costs ...
2017| Nils May, Karsten Neuhoff
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DIW Discussion Papers 1683 / 2017
We address the question of whether media influences occupational choices. To theoretically examine media effects, we construct a dynamic Bayesian occupational choice model with sequential decisions under ambiguity due to imperfect information. We show that sufficiently intensive positive media articles and reports about entrepreneurship increase the probability of self-employment and decrease the probability ...
2017| Alexander Konon, Alexander Kritikos
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DIW Discussion Papers 1682 / 2017
While financial inclusion is typically addressed by improving the financial infrastructure we show that financial literacy, representing the demand-side of financial markets, also has a beneficial effect. We study this effect at the cross-country level, which allows to consider institutional variation. Regarding “access to finance”, financial infrastructure and financial literacy are mainly substitutes. ...
2017| Antonia Grohmann, Theres Klühs, Lukas Menkhoff
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DIW Discussion Papers 1681 / 2017
When consumers face a large number of alternatives, they tend to simplify the decision problem by reducing the number of available alternatives to a subset of relevant alternatives, i.e. a consideration set. Since consideration sets are typically unobserved, most studies in the demand literature have to assume a consideration model. If these consideration models are misspecified, the demand estimates ...
2017| Anna Lu
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DIW Discussion Papers 1680 / 2017
In retailing markets of storable goods, consumer behavior is typically characterized by stockpiling. While existing research has developed rich models for such strategic consumer behavior, little is known about how sellers should ideally respond to it. In this paper, we provide insights into how frequency and depth of promotions affect consumer purchases and seller revenues in the long run. We show ...
2017| Anna Lu