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DIW Discussion Papers 1177 / 2011
Do incumbents in an election have an advantage, and if so, are these advantages heterogeneous across parties or government and opposition? We first present a theoretical discussion on the possible heterogeneity of incumbency effects in a pure two-party system. Then, we estimate the incumbency effect for the direct district candidates in German federal and state elections using a regression discontinuity ...
2011| Florian Ade, Ronny Freier, Christian Odendahl
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DIW Discussion Papers 1176 / 2011
In the last two decades, feed-in tariffs (FIT) and renewable portfolio standards (RPS) have emerged as two of the most popular policies for supporting renewable electricity (RES-E) generation in the developed world. A few studies have assessed their effectiveness, but most do not account for policy design features and market characteristics that influence policy strength. In this paper, we employ 1992-2008 ...
2011| Felix Groba, Joe Indvik, Steffen Jenner
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DIW Discussion Papers 1175 / 2011
In this paper we empirically derive the welfare effects of a shift from joint taxation with full income splitting to a revenue neutral system of individual taxation in Germany. For the empirical welfare evaluation we estimate the preference heterogeneity in the population and use normative welfare concepts proposed in Fleurbaey (2006) to solve the difficulties of comparison between, and aggregation ...
2011| André Decoster, Peter Haan
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DIW Discussion Papers 1174 / 2011
The financial crisis in 2008/2009 substantially influenced the everyday social and economic life of many Tajik people, including their behavior in the labor market. However, not much is known about the dynamics of the labor markets of the transition economies, especially in the context of the current financial crisis. Arguably, this is mainly due to paucity of panel data. In this paper, we aim to study ...
2011| Antje Kröger, Kristina Meier
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DIW Discussion Papers 1173 / 2011
We evaluate the informational content of ex post and ex ante predictors of periods of excess stock (market) valuation. For a cross section comprising 10 OECD economies and a time span of at most 40 years alternative binary chronologies of price bubble periods are determined. Using these chronologies as dependent processes and a set of macroeconomic and financial variables as explanatory variables, ...
2011| Helmut Herwartz, Konstantin A. Kholodilin
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DIW Discussion Papers 1172 / 2011
In this paper a mixed-frequency VAR à la Mariano & Murasawa (2004) with Markov regime switching in the parameters is estimated by Bayesian inference. Unlike earlier studies, that used the pseuo-EM algorithm of Dempster, Laird & Rubin (1977) to estimate the model, this paper describes how to make use of recent advances in Bayesian inference on mixture models. This way, one is able to surmount some well-known ...
2011| Paul Viefers
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DIW Discussion Papers 1171 / 2011
This research presents an application of the Hogan, Rosellón and Vogelsang (2010) (HRV) mechanism to promote electricity transmission network expansion in the Peruvian electricity transmission system known as SEIN (Sistema Eléctrico Interconectado Nacional). The HRV mechanism combines the merchant and regulatory approaches to promote investment into transmission grids. This mechanism gives incentives ...
2011| Erix Ruiz, Juan Rosellón
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DIW Discussion Papers 1170 / 2011
The Kyrgyz Republic is one of the largest recipients of international remittances in the world; from a Balance of Payments measure of remittances, it ranked tenth in the world in 2008 in the ratio of remittances to GDP, a rapid increase from 30th place in 2004. Remittances can be used to maintain the household's standard of living by providing income to families with unemployed and underemployed adult ...
2011| Antje Kröger, Kathryn Anderson
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DIW Discussion Papers 1169 / 2011
This paper presents an empirical framework for the analysis of mothers' labor supply and child care choices, explicitly taking into account access restrictions to subsidized child care. This is particularly important for countries such as Germany, where subsidized child care is rationed and private child care is only available at considerably higher cost. I use a discrete choice panel data model controlling ...
2011| Katharina Wrohlich
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DIW Discussion Papers 1168 / 2011
In this paper, we propose an indicator of the homeownership rate based on Internet ads offering the housing for rent and sale. We constructed the HOR estimate using the number of ads in four different markets (flats for rent, flats for sale, houses for rent, and houses for sale). Our HOR indicator was tested using data of German NUTS1 and planning (ROR) regions. The correlation between our estimate ...
2011| Konstantin A. Kholodilin, Andreas Mense
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DIW Discussion Papers 1167 / 2011
This paper extends the idea of using ex-ante risk measures in a model of precautionary savings by explicitly simulating future net-income risks. The uncertainty measure takes into account the interdependency of labour market status and health. The model is estimated for prime age males using the German Socio-Economic Panel Study for years 2001-2007. The empirical analysis is conducted using a measure ...
2011| Johannes Geyer
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DIW Discussion Papers 1166 / 2011
Integrating large quantities of supply-driven renewable electricity generation remains a political and operational challenge. One of the main obstacles in Europe to installing at least 200 GWs of power from variable renewable sources is how to deal with the insufficient network capacity and the congestion that will result from new flow patterns. We model the current methodology for controlling congestion ...
2011| Karsten Neuhoff, Rodney Boyd, Thilo Grau, Julian Barquin, Francisco Echavarren, Janusz Bialek, Chris Dent, Christian von Hirschhausen, Benjamin Hobbs, Friedrich Kunz, Hannes Weigt, Christian Nabe, Georgios Papaefthymiou, Christoph Weber
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DIW Discussion Papers 1165 / 2011
This paper analyses two well-known features of interest rates, namely their time dependence and their cyclical structure. Specifically, it focuses on the monthly Euribor rate, using monthly data from January 1994 to May 2011. Models based on fractional integration at the long run or zero frequency, although adequately describing the persistent behaviour of the series, do not take into account its cyclical ...
2011| Guglielmo Maria Caporale, Luis A. Gil-Alana
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DIW Discussion Papers 1164 / 2011
This paper analyses the dynamic effects of fiscal imbalances in a given EMU member state on the borrowing costs of other countries in the euro area. The estimation of a multivariate, multi-country time series model (specifically a Global VAR, or GVAR) using quarterly data for the EMU period suggests that euro-denominated government yields are strongly linked with each other. However, financial markets ...
2011| Guglielmo Maria Caporale, Alessandro Girardi
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DIW Discussion Papers 1163 / 2011
Studies analyzing renewable energy market development usually investigate additional capacity or investment. Characteristics, roles and determinants of cross border trade with renewable energy system components remain blurred. Environmental regulation and renewable energy policies are important in promoting renewable energy use. Yet, the effect of respective policies on determining exports remains ...
2011| Felix Groba
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DIW Discussion Papers 1162 / 2011
EU Member States increase deployment of intermittent renewable energy sources to deliver the 20% renewable target formulated in the European Renewables Directive of 2008. To incorporate these intermittent sources, a power market needs to be flexible enough to accommodate short-term forecasts and quick turn transactions. This flexibility is particularly valuable with respect to wind energy, where wind ...
2011| Frieder Borggrefe, Karsten Neuhoff
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DIW Discussion Papers 1161 / 2011
EU Member States are pursuing large scale investment in renewable generation in order to meet a 2020 target to source 20% of total energy sources by renewables. As the location for this new generation differs from the location of existing generation sources, and is often on the extremities of the electricity network, it will create new flow patterns and transmission needs. While congestion exists between ...
2011| Karsten Neuhoff, Benjamin F. Hobbs, David Newbery
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DIW Discussion Papers 1160 / 2011
This paper documents the magnitude, pattern, and evolution of lifetime earnings inequality in Germany. Based on a large sample of earning biographies from social security records, we show that the intra-generational distribution of lifetime earnings of male workers has a Gini coefficient around .2 for cohorts born in the late 1930s and early 1940s; this amounts to about 2/3 of the value of the Gini ...
2011| Timm Bönke, Giacomo Corneo, Holger Lüthen
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DIW Discussion Papers 1159 / 2011
In this paper, we show, using the consumer's budget constraint, that the residuals of the trend relationship among consumption, aggregate wealth, and labour income should predict both stock returns and housing returns. We use quarterly data for a panel of 31 emerging economies and find that, when agents expect future stock returns to be higher, they will temporarily allow consumption to rise. Regarding ...
2011| Guglielmo Maria Caporale, Ricardo M. Souza
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DIW Discussion Papers 1158 / 2011
In this paper we use a representative consumer model to analyse the equilibrium relation between the transitory deviations from the common trend among consumption, aggregate wealth, and labour income, cay, and focus on the implications for both stock returns and housing returns. The evidence based on data for 15 OECD countries shows that when agents expect future stock returns to be higher, they will ...
2011| Guglielmo Maria Caporale, Ricardo M. Souza