RePEc: Research Papers in Economics
Research Papers in Economics is a collaborative effort of hundreds of volunteers in many countries to enhance the dissemination of research in economics.
School of Economics and Finance Discussion Papers and Working Papers Series
2008
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#240Download full text
- JEL-Codes:
- I12; I20; O5
- Keywords:
- health; inequality; political economy; income distribution dynamics
Public and Private Expenditures on Health in the Presence of Inequality and Endogenous Mortality: A Political Economy Perspective
In this paper we study an overlapping-generations model in which agents� mortality risks, and consequently impatience, are endogenously determined by private and public investment in health care. The proportion of revenues allocated for public health care is also endogenous, determined as the outcome of a voting process. Higher substitutability between public and private health is associated with a �crowding-out� effect which leads to lower public expenditures on health care in the political equilibrium. This in turn impacts on mortality risks and impatience leading to a greater persistence in inequality and long run distributions of wealth that are bimodal.
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#239
A New Structure for Regulated Bank Lending in a Cyclical Downturn
This paper outlines a new structure for lending by regulated banks, under which the Tier 1 capital required to support a new loan is provided by the borrower�s own equity-holders. In a downturn cyclical environment this would secure a new, motivated and informed class of bank capital provider to counter the pro-cyclicality of bank lending. The new structure would be competitive in terms of cost to borrowers, nondilutive of existing bank capital and credit risk neutral. It also has the potential to be an effective instrument of market discipline in economic upcycles and regulators might consider adopting it as a pillar in any revised bank capital regime.
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#238Download full text
- JEL-Codes:
- D11, H41, H26, H73, D64
- Keywords:
- environmental participation, environmental motivation, environmental morale, pro-environmental attitudes, social capital
Environmental Participation and Environmental Motivation
We explore whether environmental motivation affects environmental behavior by focusing on volunteering. The paper first introduces a theoretical model of volunteering in environmental organizations. In a next step, it tests the hypothesis working a large micro data set covering 32 countries from both Western and Eastern Europe using several different proxies to measure environmental motivation. As a robustness test we also explore the relationship at the macro level extending the number of countries investigated. Our results indicate a strong positive relationship between environmental motivation and individuals� voluntary engagement in environmental organizations.
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#237Download full text
- JEL-Codes:
- D63; D64; D71; D81
- Keywords:
- Decision under Pressure, Altruism, Social Norms, Interdependent Preferences, Excess of Demand
Noblesse Oblige? Determinants of Survival in a Life and Death Situation
This paper explored the determinants of survival in a life and death situation created by an external and unpredictable shock. We are interested to see whether pro-social behaviour matters in such extreme situations. We therefore focus on the sinking of the RMS Titanic as a quasi-natural experiment do provide behavioural evidence which is rare in such a controlled and life threatening event. The empirical results support that social norm such as �women and children first� survive in such an environment. We also observe that women of reproductive age have a higher probability of surviving among women. On the other hand, we observe that crew members used their information advantage and their better access to resources (e.g. lifeboats) to generate a higher probability of surviving. The paper also finds that passenger class, fitness, group size, and cultural background matter.
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#236Download full text
- JEL-Codes:
- D000, D600, L830
- Keywords:
- Crowding-out, relative income, positional concerns, motivation
A Crowding-Out Effect for Relative Income
The risk of external interventions crowding-out intrinsic motivation has long been established in economics. This paper introduces a new dimension by arguing that a crowding-out effect does become possible if individuals receive higher relative compensation. Using a unique, large data set that focuses on 26 seasons in basketball (NBA) we find empirical support for a relative crowding-out effect. Performance is reduced as a reaction to a relative income advantage.
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#234
Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons
It is generally understood that people care about their absolute income position, and several studies have in fact moved beyond this, showing that people also place considerable significance on their relative income position. However, empirical evidence about the behavioural consequences is scarce. We address this shortcoming by exploring the relative income effect in a (controlled) sporting contest environment. Specifically, we look at the pay-performance relationship by working with a large panel data set consisting of 26 NBA seasons. We explore how closeness affects positional concerns exploring in detail several potential reference groups. This allows checking of their relevance and of the scope of comparisons, a critical aspect in the literature that requires further investigation.
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#233Download full text
- JEL-Codes:
- H260, H730, D640
- Keywords:
- littering, environmental participation, environmental preferences, environmental outcomes
Justifiability of Littering: An Empirical Investigation
The paper investigates the relationship between environmental participation and littering. Previous empirical work in the area of littering is scarce as is evidence regarding the determinants of littering behavior. We address these deficiencies, demonstrating a strong empirical link between environmental participation and reduced public littering using European Values Survey (EVS) data for 30 Western and Eastern European countries. The results suggest that membership in environmental organizations strengthens commitment to anti-littering behaviour, thereby supporting improved environmental quality.
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#232Download full text
- JEL-Codes:
- H26, H73, D78, C93
- Keywords:
- Tax Morale, Social Learning, Conformity, Convergence Process, Deterrence, Quasi-Natural Experiment
Coming Closer? Tax Morale, Deterrence and Social Learning after German Unification
The paper explores whether a social learning model helps explain the observed conformity and compliance with social norms after the unification of Germany. We compare tax morale, (the willingness to pay taxes), between inhabitants of East and West Germany during the post-unification period, using three World Values Survey/European Values Survey waves between 1990 and 1999. German unification is of particular interest in analysing tax morale since it is close to a quasi-natural experiment. Factors such as a common language, similar education systems and a shared cultural and political history prior to the separation after the Second World War can be controlled because they are similar. Our findings indicate that the social learning model employed in this study helps to predict the development of tax morale over time. It is clear that tax morale values converged within a mere nine years after unification, due largely to a strong change in the level of tax morale in the East. Thus, the paper contributes to the literature that attempts to explain how norms arise, how they are maintained and how they are changed.
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#231Download full text
- JEL-Codes:
- D000, D600, L830
- Keywords:
- Relative income, positional concerns, envy, social comparison, relative derivation, performance
(Working Paper)Do Employees Care About Their Relative Position? Behavioural Evidence Focusing on Performance.
Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times.
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#230Download full text
- JEL-Codes:
- D000; D600; L830
- Keywords:
- Inequity aversion, relative income, positional concerns, envy, social comparison, performance, interdependent preferences
Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field
The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis, testing the model of inequity aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequity aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives.
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#229Download full text
- JEL-Codes:
- K420, D720, O170, J240
- Keywords:
- Corruption; Political Interest, Social Norms
Corruption and Political Interest: Empirical Evidence at the Micro Level
The topic of corruption has recently attracted a great deal of attention, yet there is still a lack of micro level empirical evidence regarding the determinants of corruption. Furthermore, the present literature has not investigated the effects of political interest on corruption despite the interesting potential of this link. We address these deficiencies by analyzing a cross-section of individuals, using the World Values Survey. We explore the determinants of corruption through two dependent variables (perceived corruption and the justifiability of corruption). The impact of political interest on corruption is explored through three different proxies, presenting empirical evidence at both the cross-country level and the within-country level. The results of the multivariate analysis suggest that political interest has an impact on corruption controlling for a large number of factors.
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#227Download full text
- JEL-Codes:
- H260; H730; D640
- Keywords:
- environmental preferences, environmental morale, gender, age, children
Differences in Preferences Towards the Environment: The Impact of a Gender, Age and Parental Effect
The paper investigates empirically the differences in preferences towards protection of the environment. Using seven different dependent variables to focus on the impact of age, gender and children we use a large micro data set covering data from 33 Western and Eastern European countries. The results indicate that women have both a stronger preference towards the environment and a stronger willingness to contribute. Moreover, we observe the tendency of a negative correlation between age and environmental preferences. However, a positive effect is visible once we focus on the impact of age on social norms (environmental morale). Finally, we were not able to observe that having children is positively correlated with a stronger preference towards the environment.
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#226Download full text
- JEL-Codes:
- H230; H530; I310
- Keywords:
- redistribution, inequality, welfare state, social capital, regional conditions
More Income Equality or Not? An Empirical Analysis of Individuals' Preferences for Redistribution
Do people prefer a society with an extensive social welfare system with high taxes, or low taxes but lax redistributive policies? Although economists have for a long time investigated the trade-off mechanism between equity and efficiency, surprisingly little information is available about citizens’ preferences over the distribution of income in a society. The aim of this paper is reduce this shortcoming, investigating in an empirical study working with World Values Survey, what shapes individuals' preferences for income equality in Spain. We present evidence that not only traditional economic variables are relevant to be considered, but also factors such as ideology, political interest, fairness perception about others or trust in institutions, are key determinants to understand preferences towards redistribution and equality. Furthermore, we also find that regional conditions affect the citizens’ preferences for income equality. Higher income inequality leads to stronger preferences for equality. On the other hand, there is the tendency that higher social expenditures reduce the preferences for income equality.