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 ...
How can public pension systems be reformed to ensure fiscal stability in the face of increasing life expectancy? To address this pressing open question in public finance, we estimate a life-cycle model in which the optimal employment, retirement and consumption decisions of forward-looking individuals depend, inter alia, on life expectancy and the design of the public pension system. We calculate that, ...
This paper highlights the strategic role that private quality standards play in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the producers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. The asymmetry is driven by both the retailers.incentive to raise ...
We use a life-cycle model of consumption and portfolio choice to study the effects of social security on the investment decisions of households for the European case. Our model is mainly based on the one developed by Cocco, Gomes, and Maenhout (2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states. In contrast to most models in the ...
Survey-based indicators such as the consumer confidence are widely seen as leading indicators for economic activity, especially for the future path of private consumption. Although they receive high attention in the media, their forecasting power appears to be very limited. Therefore, this paper takes a fresh look on the survey data, which serve as a basis for the consumer confidence indicator (CCI) ...
More than half of German adults are overweight. Those most often affected include the elderly, poor, and individuals with poor education. Yet is overweight an issue that economists should address? Poor nutrition and lack of exercise play a major role in widespread diseases. One third of total health care expenditures are devoted to illnesses related to overweight. This is just one of the reasons why ...
Findings from consumer surveys and studies about nutritional labeling tend to be hard to compare, because the methodologies they use and questions they address are quite varied. Nevertheless, by evaluating these studies, we can obtain a good overview of existing nutritional labeling systems and consumer preferences. The present background article offers an overview of the studies frequently cited in ...
This paper investigates the short-term effects of public smoking bans on individual smoking behavior. In 2007 and 2008, state-level smoking bans were gradually introduced in all of Germany's sixteen federal states. We exploit this variation in the timing of state bans to identify the effect that smoke-free policies had on individuals' smoking propensity and smoking intensity. Using rich longitudinal ...