External refereed essays

Existence of Nash Networks in One-Way Flow Models

This paper addresses the existence of Nash equilibria in one-way flow models in a number of different settings. In these models players form costly links with other players and obtain resources from them through the directed path connecting them. We find that heterogeneity in the costs of establishing links plays a crucial role for the existence of Nash networks. The paper also provides conditions ...

Competition Policy in a Concentrated and Globalized Retail Industry

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper, we examine whether there are overlapping trends of regional development in the EU: overall convergence, on the one hand, and persistent or even increasing spatial concentration (agglomeration), on the other. Kernel density estimation, Markov chain analysis and ...

An Economic Analysis of China's Credit Information Monopoly

The Chinese government is building the largest public credit information database on earth. The Credit Registry Center of the People's Bank of China registers more than 600 million consumers of which 110 million have a credit relationship with a financial institution. The Center is a public utility monopoly which collects information from banks and non-bank institutions - a unique approach developed ...

Reforming the German Local Business Tax: Lessons from an International Comparison and a Microsimulation Analysis

The local business tax as the main revenue source of local governments in Germany has been under extensive debate for decades. Proposals for reform range from a pure profit tax to an origin-based value-added tax. Local business taxation systems in OECD countries actually represent the whole spectrum between these two extremes. We use a newly developed microsimulation model for the business sector in ...

Only the Congruent Survive: Personality Similarities in Couples

Numerous studies proved that people tend to select partners that are similar to them with regard to many social and psychological variables. Even though this effect was also found for personality, results are inconsistent and reveal convergence coefficients ranging from negative over zero- to positive correlations. The present study thus aims to investigate personality congruence between spouses and ...

Early Childhood Education and Care in Germany: The Status Quo and Reform Proposals

The Dynamics of European Inflation Expectations

We investigate the relevance of Carroll's sticky information model of inflation expectations for four major European economies (France, Germany, Italy and the United Kingdom). In contrast to the most rational expectation models, households in the sticky information environment update their expectations occasionally rather than instantaneously due to the costs of acquiring and processing information. ...

Städtebaulicher Investitions- und Förderbedarf 2007 bis 2013 in Deutschland

Redistributive Impacts of Government and Private Household Activities: Trends in Equivalized Household Net Incomes and Intra-household Earnings in Germany, 1985-2005

A Complementarity Model for the European Natural Gas Market

In this paper, we present a detailed and comprehensive complementarity model for computing market equilibrium values in the European natural gas system. Market players include producers and their marketing arms which we call "traders", pipeline and storage operators, marketers, LNG liquefiers, regasifiers, tankers, and three end-use consumption sectors. The economic behavior of producers, traders, ...

Human Capital Externalities: Evidence from the Transition Economy of Russia

The paper tests for the existence of human capital externalities using a micro-level approach: the Mincerian wage regression augmented with the average level of education in cities. To solve identification problems arising from the endogeneity of average education, the study exploits a natural experiment provided by the process of economic transition: average education at the end of communism can be ...

Political Patronage in Ukrainian Banking

This paper empirically investigates the link between political patronage and bank performance for Ukraine during 2003Q3-2005Q2. We find significant differences between politically affiliated and non-affiliated banks. The data suggest that affiliated banks have significantly lower interest rate margins and increase their capitalization. Furthermore, we show that the level of activity of affiliated deputies ...

Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach

Using representative micro data from the German Socio-Economic Panel Study (SOEP), this paper delivers new insights into the development of income inequality and regional stratification in Germany after unification. This paper applies a new method for detecting social stratification by a decomposition of the Gini index that yields the obligatory between- and within-group components as well as an 'overlapping' ...

Electricity Wholesale Market Prices in Europe: Convergence?

This paper tests the hypothesis that the ongoing restructuring process in the European electricity sector has led to a common European market for electricity. Based on a Principal Component Analysis (PCA) of wholesale electricity prices in 2002-2006, we reject the assumption of full market integration. For several pairs of countries, the weaker hypothesis of (bilateral) convergence is accepted based ...

Voting, Inequality and Redistribution

This paper surveys models of voting on redistribution. Under reasonable assumptions, the baseline model produces an equilibrium with the extent of redistributive taxation chosen by the median income earner. If the median is poorer than average, redistribution is from rich to poor, and increasing inequality increases redistribution. However, under different assumptions about the economic environment, ...

On the Choice of Public Pensions When Income and Life Expectancy Are Correlated

The paper presents a model where public pensions are determined by majority voting. Voters differ by age and income. Moreover, life expectancy increases with income. Depending on the strength of the link between contributions and benefits, and the relationship between income and life expectancy, individually optimal tax rates may increase or decrease with income. If they decrease, high tax rates are ...

Central versus Local Education Finance: A Political Economy Approach

This paper models voters' preferences over central versus local education policies when there are private alternatives. Education is financed by income taxes and individuals are mobile between communities. Public education levels are chosen by majority vote. Contrary to conventional wisdom, centralisation may benefit the rich and poor, while the middle class prefer decentralised education. The model ...

Measuring Ethnic Identity and Its Impact on Economic Behavior

This article advocates for a new measure of the ethnic identity of migrants, models its determinants, and explores its explanatory power for economic performance. The ethnosizer, a measure of the intensity of a person's ethnic identity, is constructed from information on the following elements: language, media, ethnic self-identification, ethnic networks, and residency plans. The two-dimensional concept ...

Life Satisfaction Shows Terminal Decline in Old Age: Longitudinal Evidence from the German Socio-Economic Panel Study (SOEP)

Longitudinal data spanning 22 years, obtained from deceased participants of the German Socio-Economic Panel Study (SOEP; N = 1,637; 70- to 100-year-olds), were used to examine if and how life satisfaction exhibits terminal decline at the end of life. Changes in life satisfaction were more strongly associated with distance to death than with distance from birth (chronological age). Multiphase growth ...