External refereed essays

A State Space Model for Berlin House Prices: Estimation and Economic Interpretation

Hedonic regression has become the standard approach for modeling the behavior of house prices. Usually, the common price component is modeled via dummy variables. Based on an approximation for the present value, we deliver an economic interpretation of the common price component. This allows to include explanatory factors like inflation rates, mortgage rates and building permissions. The notional rents ...

The Impact of Fiscal Policy and Deregulation on Shadow Economics in Transition Countries: The Case of Ukraine

A model of Ukrainian shadow economy money demand is estimated that includes new regulatory burden, tax complexity, andsoft-budget constraint variables. This model is analyzed to determine the causes and dynamics of the Ukrainian shadow economy and to assess the effectiveness of state measures undertaken to reduce itssize. The direct tax burden, the broadly defined regulatory burden, the complexity ...

The Political Economy of Intergovernmental Grants

We study the effect of politics on the distribution of intergovernmental grants. We consider a model where local government officials lobby the central government who in turn distributes grants based on the local governments' lobbying efforts. We argue that the marginal costs of lobbying increase with the geographical and "political" distance from the central government capital. Hence, in equilibrium, ...

Design Characteristics of National Travel Surveys: International Comparison for Ten Countries

In Germany a national travel survey (NTS) was planned for 2002 and was preceded by a pilot study in 2001. As part of this pilot study the state of the practice for NTS in several countries was examined through contact with relevant institutions and persons via the Internet. A structured questionnaire was used for these consultations. The participants in nine countries provided the relevant information ...

Policy Reforms and Productivity Growth in India's Energy Intensive Industries

India had a highly restrictive industrial and trade policy regime until the end of the1960s. This regime while succeeding to some extent in creating a diversified industrial base introduced gross inefficiencies in many sectors of the economy. Beginning in the early 1970s, Indian economic policies have been marked by deregulation, decontrol and progressive liberalization. In this paper, we assess the ...

A Forgotten Issue: Distributional Effects of Day Care Subsidies in Germany

In general, day care subsidies are accepted as a means of creating equal chances for both children and mothers in the labour market. Although there is a broad consensus that the use of children's day care should be publicly supported, there is no consensus on how this should be done. Moreover, there is little knowledge on the distributional effects of day care subsidies. In order to assess whether ...

Berlin: Economic and Spatial Change

This paper discusses the past and future economic situation of Berlin in the German city system. Comparing the shares of employment in various service sectors of total employment in Germany from 1939 to 1997 shows the significant changes in the role as a metropolis. Berlin has lost its dominant position as a consequence of isolation from international development for 40 years. Despite successful expansion ...

Rolf Krengel in memoriam

A Nation-Wide Laboratory: Examining Trust and Trustworthiness by Integrating Behavioral Experiments into Representative Surveys

Die experimentelle Ökonomie führt typischerweise Labor-Untersuchungen durch, die mit homogenen und selektiven Versuchspersonen arbeiten. Repräsentative Surveys leiden hingegen unter Messfehlern und der Frage, ob hypothetisches Verhalten, das erhoben wird, mit tatsächlichem Verhalten korrespondiert. Deswegen präsentieren wir eine Methode, mit der man die Schwächen beider Ansätze überwindet, indem man ...

Unemployment and Productivity Growth: An Empirical Analysis within an Augmented Solow Model

Does a country's level of unemployment have an impact on the long-run growth rate? Incorporating unemployment into a generalised Solow-type growth model yields some answers. In the traditional Solow model, unemployment has no long-run influence on the growth rate and the level of productivity. The long-run level of productivity is reduced if higher unemployment leads to less formal education or to ...

Declining Fertility in East Germany after Unification: A Demographic Response to Socioeconomic Change

Einstellungen zur sozialen Sicherung im Vergleich der Generationen

Verteilungspolitische Probleme der Alterssicherung

The ongoing change of demographic and economic structures does not undermine employment (as many believe), but this change indeed induces problems with the mandatory old-age security system in Germany. This paper discusses some popular reform proposals and concludes with another proposal which takes into account economic incentives. Especially the gerontological aim of a longer lifetime employment ...

Zur Ökonomik grundfinanzierter wirtschafts- und sozialwissenschaftlicher Forschung

Mit Argumenten aus der "Theorie des Marktversagens" und der "Neuen Politischen Ökonomie" kann gezeigt werden, daß Universitäten und Forschungsinstitute spezielle "Öffentliche Güter" produzieren, die eine Grundfinanzierung durch den Staat unter Effizienzgesichtspunkten rechtfertigen. Allerdings wäre die Produktion solcher wirtschafts- und sozialwissenschaftlicher Forschungsergebnisse durch einen einzigen ...

Coordination Failure with Multiple-Source Lending: The Cost of Protection against a Powerful Lender

We analyze how a firm might protect quasirents in an environment of imperfect capital markets, where switching lenders is costly to the borrower, and contracts are incomplete. As switching costs make the firm vulnerable to ex post exploitation, it may want to diversify lending. Multiple-source lending, however, suffers from coordination failure. An uncoordinated withdrawal of funds will force a financially ...

Sport as a Common Property Resource: A Solution to the Dilemmas of Doping

The use of drugs in high-performance sports (doping) is a common pool resource (CPR) dilemma: regardless of the number of other athletes who dope, the athlete with strong tastes for victory will find doping optimal; yet if all athletes dope, they all bear negative health consequences, although each one's odds of victory are not greatly changed. The current regulatory approach relies entirely on centralized ...

Jurisdiction Size, Political Participation, and the Allocation of Resources

This paper analyzes the effect of population size on politicalparticipation and allocative efficiency. Increasing populationis generally found to reduce political participation. However,since participation is not evenly spread throughout thepopulation, this will have consequences for allocation.Namely, we argue that increasing population size shifts powerto the rich. We discuss the consequences for ...

Restructuring Know-How and Collateral

Tax Liability-Side Equivalence in Experimental Posted-Offer Markets

In theory, the incidence of a tax should be independent of the side of the market on which it is levied. This principle of liability-side equivalence underlies virtually all theories of tax incidence. Policy discussions, however, tend to place great emphasis on the legal division of tax payments. We use computerized experimental posted-offer markets to test liability-side equivalence. We find that ...

Post-Soviet Gas Sector Restructuring in the CIS: a Political Economy Approach

This paper analyses progress and obstacles to gas sector reform in the most important CIS-countries (Russia, Turkmenistan, Ukraine, Uzbekistan), taking a political economy perspective. This reform process is embedded in a very specific post-Soviet institutional framework stemming from the legacy of socialism. Firstly, we review the evolution of the gas sector for the period 1992-1998. The paper then ...