External refereed essays

Revisiting Friendship Networks

We extend the model of friendship networks developed by Brueckner (2006) in two ways. First, we extend the level of indirect benefits by incorporating benefits from up to three links and explore its implication for the socially optimal and individual effort levels. Next, we generalize the magnetic agent problem by allowing for more than 3 players by restricting ourselves to regular networks that include ...

Explaining the Hump in Life Cycle Consumption Profiles

This paper documents life cycle (or age) profiles of (log) household income, durable and non-durable consumption for Dutch households after explicitly controlling for time (or business cycle) effects and birth cohort effects. We find that both measures of consumption as well as income is clearly hump shaped over the life cycle. Hence, real consumption per household seems to track income over the life ...

Hysteresis in the Development of Unemployment: The EU and US Experience

We examine hysteresis in EU and US unemployment by panel unit root tests. First generation tests indicate that unemployment is stationary. Second generation tests show mixed results. Idiosyncratic components are stationary in the US. A unit root in the US common component depends on the starting point of the sample. While the common component is nonstationary over the whole period, it is mean-reverting ...

Variable Selection and Oversampling in the Use of Smooth Support Vector Machines for Predicting the Default Risk of Companies

In the era of Basel II a powerful tool for bankruptcy prognosis is vital for banks. The tool must be precise but also easily adaptable to the bank's objectives regarding the relation of false acceptances (Type I error) and false rejections (Type II error). We explore the suitability of smooth support vector machines (SSVM), and investigate how important factors such as the selection of appropriate ...

Voting on Redistribution with Tax Evasion

This paper analyzes voting on a linear income tax whose proceeds are redistributed lump sum to the taxpayers. Individuals can evade taxes, which leads to penalties if evasion is detected. Since preferences satisfy neither single peakedness nor single crossing, a voting equilibrium may not exist. When an equilibrium does exist, there are several possible outcomes. There may be 'conventional' equilibria ...

Zur Entwicklung der Vermögensungleichheit in Deutschland

For a long time, the social policy discussion in Germany has been heavily dominated by income inequality and poverty risk rates, while at the same time the analysis of personal wealth distribution was underdeveloped, last but not least due to a severe lack of appropriate data. Using representative micro data from the German Socio-Economic Panel Study (SOEP), this paper analyzes individual level information ...

Sollen Freiberufler und Landwirte Gewerbesteuer zahlen? Steuersystematische Überlegungen und empirische Wirkungsanalysen

In vielen Ländern gibt es kommunale Unternehmensteuern, in Deutschland hat die Gewerbesteuer ein großes Gewicht bei der Gemeindefinanzierung. Wenn solche kommunalen Unternehmensteuern erhoben werden, gibt es keinen steuer- oder wirtschaftspolitischen Grund für eine Differenzierung zwischen Gewerbebetrieben sowie freien Berufen oder der Land- und Forstwirtschaft. Daher sollten alle Personenunternehmen ...

Natural Gas Vehicles: An Option for Europe

In Europe natural gas vehicles play a minor role. A decisive reason for this is the dependence of most European countries from gas imports. Except for Italy, there is no tradition to use natural gas as fuel. In addition, there is a lack of infrastructure (e.g. fuelling stations). In contrast to Europe, in Latin American and Asian countries natural gas vehicles are widespread. Some countries foster ...

Zum Aufstieg und Niedergang des Normalarbeitsverhältnisses in Deutschland 1800-2010: ein Forschungsprojekt

Measuring State Dependence in Individual Poverty Histories When there Is Feedback to Employment Status and Household Composition

This paper argues that the assumption of strict exogeneity, which is usually invoked in estimating models of state dependence with unobserved heterogeneity, is violated in the poverty context as important variables determining contemporaneous poverty status, in particular employment status and household composition, are likely to be influenced by past poverty outcomes. Therefore, a model of state dependence ...

The Role of Social Networks in Determining Migration and Labour Market Outcomes

This paper empirically examines social network explanations for migration decisions in the context of German reunification. Using longitudinal data from the German Socio-Economic Panel, we first show that the presence of a family in West Germany is an important predictor for the migration hazard rate of East Germans. We then explore whether pre-migration networks have a discernible impact on the economic ...

Demand Side Analysis of Microlending Markets in Germany

In developing and transition economies, microlending has become an effective instrument for providing micro businesses with the necessary financial resources to launch operations. In industrialized countries, with their highly developed banking systems, however, there has been ongoing debate on the question of whether an uncovered demand for microlending services exists. The present pilot study explores ...

Climate Change and Modelling of Extreme Temperatures in Switzerland

This study models maximum temperatures in Switzerland monitored in twelve locations using the generalised extreme value (GEV) distribution. The parameters of the GEV distribution are determined within a Bayesian framework. We find that the parameters of the underlying distribution underwent a substantial change in the beginning of the 1980s. This change is characterised by an increase both in the level ...

Estimating Level Effects in Diffusion of a New Technology: Barcode Scanning at the Checkout Counter

Cross-country or cross-industry studies of technology diffusion typically estimate how independent factors affect diffusion speed or timing, often based on a two-stage approach. In many applications, however, countries (industries) differ most in the saturation level of diffusion. In a single-stage econometric approach to a standard diffusion model, we therefore estimate how the saturation level covaries ...

Narrow Bracketing and Dominated Choices

We show that any decision maker who "narrowly brackets" (evaluates decisions separately) and does not have constant-absolute-risk-averse preferences will make a first-order stochastically dominated combined choice in some simple pair of independent binary decisions. We also characterize the preference-contingent monetary cost from this mistake. Empirically, in a real-stakes laboratory experiment that ...

On Selection of Components for a Diffusion Index Model: It's Not the Size, It's How You Use It

This article suggests a novel approach to pre-selection of the component series of the diffusion index based on their individual forecasting performance. It is shown that this targeted selection allows substantially improving the forecasting ability compared to the diffusion index models that are based on the largest available data set.

Is Flow Velocity a Significant Parameter in Flood Damage Modelling?

Flow velocity is generally presumed to influence flood damage. However, this influence is hardly quantified and virtually no damage models take it into account. Therefore, the influences of flow velocity, water depth and combinations of these two impact parameters on various types of flood damage were investigated in five communities affected by the Elbe catchment flood in Germany in 2002. 2-D hydraulic ...

Assessing the Impact of the ECB's Monetary Policy on the Stock Markets: A Sectoral View

This paper shows that the ECB's monetary policy has a heterogeneous impact on the sectoral stock market indexes in the Euro Area. We show that the heteroskedasticity based approach of Rigobon (2003) should be preferred to the event study approach.

Bildungsungleichheiten und blockierte Lernpotenziale: welche Bedeutung hat die Persönlichkeitsstruktur für diesen Zusammenhang?

This paper examines the impact of underachievement on inequality of educational opportunities. It also investigates whether personality traits are a mediating mechanism between social origin and underachievement. Underachievement is defined as achieving a school attainment that is below the individual cognitive learning potential, measured by tests of fluid intelligence. The paper develops a definition ...

25 Jahre Sozio-oekonomisches Panel - ein Infrastrukturprojekt der empirischen Sozial- und Wirtschaftsforschung in Deutschland: Einleitung in das Themenheft

The longitudinal German Socio-Economic Panel (SOEP) study has been providing microdata for social, behavioral, and economic research for over 25 years. This paper presents an overview of this nationally and internationally important infrastructural facility for empirical social research, and shows that SOEP data are of key sociological interest in two respects. First, they allow for annual representative ...