Topic Consumers

Income Redistribution, Consumer Credit, and Keeping up with the Riches

In this study, we set up a DSGE model with upward looking consumption comparison and show that consumption externalities are an important driver of consumer credit dynamics. Our model economy is populated by two different household types. Investors, who hold the economy’s capital stock, own the firms and supply credit, and workers, who supply labor and demand credit to finance consumption. Furthermore, ...

Do Default Assignments Increase Savings of the Poor? Empirical Evidence

Although households in developing and emerging countries are relatively poor, there is potential to save. For example, one study estimates that up to 8.1% of a poor household’s budget in such countries is spent on so-called temptation goods, like alcohol, tobacco, and festivals (Banerjee and Duflo, 2007). At the same time, many households are aware of the fact that they do not save enough. They name ...

Health-Related Life Cycle Risks and Public Insurance

Based on a dynamic life cycle model, this study analyzes health-related risks of consumption and old-age poverty. The model allows for health effects on employment risks, on productivity, on longevity, the correlation between health risks, productivity and preferences, and the financial incentives of the German public insurance schemes. The estimation uses data on male employees and an extended expectation-maximization ...

Willingness to Take Risk: The Role of Risk Conception and Optimism

We show that the disposition to focus on favorable or unfavorable outcomes of risky situations affects willingness to take risk as measured by the general risk question. We demonstrate that this disposition, which we call risk conception, is strongly associated with optimism, a stable facet of personality, and that it predicts real-life risk taking. The general risk question captures this disposition ...

Do Demographics Prevent Consumption Aggregates from Reflecting Micro-Level Preferences?

Most simulated micro-founded macro models use solely consumer-demand aggregates in order to estimate preference parameters of a representative consumer, for use in policy evaluation. Focusing on dynamic models with time-separable preferences, we show that aggregation holds if, and only if, momentary utility functions fall in the Identical-Shape Harmonic Absolute-Risk Aversion (ISHARA) utility class, ...

Net Neutrality and CDN Intermediation

We analyze competition between Internet Service Providers (ISPs) where consumers demand heterogeneous content within two Quality-of-Service (QoS) regimes, Net Neutrality and Paid Prioritization, and show that paid prioritization increases the static efficiency compared to a neutral network. We also consider paid prioritization intermediated by Content Delivery Networks (CDNs). While the use of CDNs ...

Social sustainability labels: promises and reality in the example of Fairtrade-coffee

By Pio Baake, Jana Friedrichsen, and Helene Naegele Fairtrade certification is intended to improve both the income and living conditions of producers, thereby creating more fairness in international trade. However, theoretical considerations and empirical studies show that this goal is only achieved to a limited extent, at least for coffee: Faitrade certification leads at best to small increases in ...

Airbnb and Rental Prices: Evidence from Berlin

Retrospective evaluation support study: the Guidelines on Regional State Aid for 2014-2020

In January 2019, the European Commission (“Commission”) launched the evaluation of its State aid rules that were adopted as part of the State aid Modernisation. The evaluation aims to verify if the rules delivered the desired results to European citizens and businesses at a minimum cost and if they are still fit for purpose. Within this process, the Commission entrusted a consortium of...

The 10th Berlin IO Day

The Berlin IO Day is a one-day workshop sponsored by the Berlin Centre for Consumer Policies (BCCP) and supported by the Berlin's leading academic institutions, including DIW Berlin, ESMT Berlin, Humboldt-Universität zu Berlin, Technische Universität Berlin, and WZB which takes place twice a year, in the Fall and in the Spring. The aim is to create an international forum for high quality...