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DIW Discussion Papers 1439 / 2014
This paper experimentally investigates the nature of image concerns in gift giving. For this, we test variants of dictator and impunity games where the influences of social preferences on behavior are kept constant across all games. Givers maximize material payoffs by pretending to be fair when receivers do not know the actual surplus size, implying that portraying an outward appearance of norm compliance ...
2014| Alexander S. Kritikos, Jonathan H. W. Tan
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DIW Discussion Papers 1438 / 2014
In recent years, almost all children below school age in Western industrialized countries have some experience of attending day care institutions. However, the age at which children enter day care and therefore the overall time spent in day carevaries substantially. We investigate the potential impact of later day care entry on the social and emotional behaviour of children, one important aspect of ...
2014| Frauke H. Peter, Pia S. Schober, C. Katharina Spieß
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DIW Discussion Papers 1437 / 2014
Do WTO commitments reduce the risk of trade policy reversals? To address this question, we rely on the theoretical model of varying cooperative tariffs by Bagwell and Staiger (1990) to specify our empirical model for the probability of a tariff increase. We then study how WTO tariff commitments affect this probability. We estimate our model using a database of WTO bound tariffs that we built for all ...
2014| Valeria Groppo, Roberta Piermartini
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DIW Discussion Papers 1436 / 2014
This paper studies the bank-sovereign link in a dynamic stochastic general equilibrium set-up with strategic default on public debt. Heterogeneous banks give rise to an interbank market where government bonds are used as collateral. A default penalty arises from a breakdown of interbank intermediation that induces a credit crunch. Government borrowing under limited commitment is costly ex ante as bank ...
2014| Philipp Engler, Christoph Große Steffen
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DIW Discussion Papers 1435 / 2014
We analyze a constitutional change in the German State of Bavaria where citizens, not politicians, granted themselves more say in politics at the local level through a constitutional initiative at the state level. This institutional setting allows us to focus on revealed preferences for direct democracy and to identify factors which explain this preference. Empirical results suggests support for direct ...
2014| Felix Arnold, Ronny Freier, Magdalena Pallauf, David Stadelmann
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DIW Discussion Papers 1434 / 2014
Many developing countries around the world apply progressive water tariffs, often structured in the form of discretely increasing block tariffs (IBTs). These tariffs have been criticized in the welfare economic literature due to their perceived inefficiency: many of the prices charged under IBTs do not correspond to marginal costs and thus violate the principle of allocative efficiency. In this paper ...
2014| Georg Meran, Christian von Hirschhausen
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DIW Discussion Papers 1433 / 2014
It is often assumed that international labor migration from Tajikistan, while having no noticeable effects on investment (usually defined as medium and long-term consumption, such as education, or investment into housing or business), on average leads to an increase in short-term consumption, mostly food. In this paper, a simple household-level model determining the migration decision is developed ...
2014| Kristina Meier
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DIW Discussion Papers 1432 / 2014
It is difficult to test the prediction that future career prospects create implicit effort incentives because researchers cannot randomly “assign” career prospects to economic agents. To overcome this challenge, we use data from professional soccer, where employees of the same club face different external career opportunities depending on their nationality. We test whether the career prospect of being ...
2014| Jeanine Miklós-Thal, Hannes Ullrich
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DIW Discussion Papers 1431 / 2014
This paper studies the causal effects of graduating from university with an honors degree on subsequent earnings. While a rich body of literature has focused on estimating returns to human capital, few studies have analyzed returns at the very top of the education distribution. We highlight the importance of honors degrees for future labor market success in the context of German law graduates. Using ...
2014| Ronny Freier, Mathias Schumann, Thomas Siedler
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DIW Discussion Papers 1430 / 2014
We study how website defaults affect consumer behavior in the domain of charitable giving. In a field experiment that was conducted on a large platform for making charitable donations over the web, we exogenously vary the default options in two distinct choice dimensions. The first pertains to the primary donation decision, namely, how much to contribute to the charitable cause. The second relates ...
2014| Steffen Altmann, Armin Falk, Paul Heidhues, Rajshri Jayaraman
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DIW Discussion Papers 1429 / 2014
We advance the literature on political budget cycles by testing separately for cycles in expenditures for elections in the legislative and the executive. Using municipal data, we can separately identify these cycles and account for general year effects. For the executive branch, we show that it is important whether the incumbent re-runs. To account for the potential endogeneity associated with this ...
2014| Dirk Foremny, Ronny Freier, Marc-Daniel Moessinger, Mustafa Yeter
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DIW Discussion Papers 1428 / 2014
This study evaluates the impact of fuel prices on new car purchases, using exhaustive individual-level data of monthly registration of new private cars in France from 2003 to 2007. Detailed information on the car holder enables us to account for heterogeneous preferences across purchasers. We identify demand parameters through the large oil price fluctuations of this period. We find that the sensitivity ...
2014| Pauline Givord, Céline Grislain-Letrémy, Helene Naegele
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DIW Discussion Papers 1427 / 2014
The Household Finance and Consumption Survey (HFCS) provides information about household wealth (real and financial assets as well as liabilities) from 15 Euro‐countries after the financial crisis of 2007/8. The survey will be the central dataset in this topic in the future. However, several aspects point to potential methodological constraints regarding crosscountry comparability. Therefore the aim ...
2014| Anita Tiefensee, Markus M. Grabka
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DIW Discussion Papers 1426 / 2014
In this paper, we analyze the technical efficiency of CO2 reduction potentials of German power and heat plants, using a non-parametric sequential Data Envelopment Analysis. We apply a metafrontier framework to evaluate plant-level efficiencies in the transformation of inputs into desirable (energy) and undesirable (CO2 emissions) outputs, taking into account different fossil fuel generation technologies. ...
2014| Stefan Seifert, Astrid Cullmann, Christian von Hirschhausen
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DIW Discussion Papers 1425 / 2014
Based on representative micro data for Germany, we compare the incomes of self-employed with those of wage workers. Our results show that the median self-employed entrepreneur with employees earns significantly more than the median salaried employee, while the median solo entrepreneur earns less. However, solo entrepreneurship pays for those with a university entrance degree but no further professional ...
2014| Alina Sorgner, Michael Fritsch, Alexander Kritikos
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DIW Discussion Papers 1424 / 2014
Local business profits respond to local business tax (LBT) rates that vary across municipalities. We estimate that a one percent increase in the LBT rate decreases the LBT base by 0.45 percent, based on the universe of German LBT return files, which include corporations and unincorporated businesses. However, the fiscal equalization scheme largely compensates municipalities for the loss in the LBT ...
2014| Frank M. Fossen, Viktor Steiner
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DIW Discussion Papers 1423 / 2014
This paper examines short-term price reactions after one-day abnormal price changes and whether they create exploitable profit opportunities in various financial markets. A t-test confirms the presence of overreactions and also suggests that there is an “inertia anomaly”, i.e. after an overreaction day prices tend to move in the same direction for some time. A trading robot approach is then used to ...
2014| Guglielmo Maria Caporale, Luis Gil-Alana, Alex Plastun
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DIW Discussion Papers 1422 / 2014
Developed and well regulated financial markets are usually seen as a precondition for an efficient allocation of resources and can foster long term economic growth. This paper explores the institutional determinants for financial development in the countries of the Middle East and North African (MENA) region. Institutional conditions are from the International Country Risk Guide. Paneleconometric techniques ...
2014| Mondher Cherif, Christian Dreger
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DIW Discussion Papers 1421 / 2014
In Germany, individuals in need of long-term care receive support through benefits of the long-term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective family care is a cost-saving alternative to formal home care and to ...
2014| Johannes Geyer, Thorben Korfhage
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DIW Discussion Papers 1420 / 2014
This paper investigates the causal impact of displacement on health outcomes for Colombian children of different age cohorts. It uses the Colombian Demographic and Health Survey 2010, which provides both a number of health outcomes and information about displacement of households. Two different empirical strategies are employed to identify the impact of displacement on child health, namely a linear ...
2014| Nina Wald