Suchergebnisse

This paper considers trade agreements in a sufficiently general framework to encompass both imperfectly competitive market structures and income effects in government objectives. We show that governments choose globally efficient policies if they act as if they do not value the impact of their policies on their terms of trade. The results confirm that additional international externalities that arise in imperfectly competitive settings are the result of government failure to equate markups between sectors with domestic policies, not demandside factors.

I generalize the workhorse model of network competition to include income effects in demand. Empirical work has shown income effects to be positive and statistically significant. Income effects deliver theoretical results consistent with regulatory concern about excessive termination rates: unregulated network operators competing in nondiscriminatory retail contracts negotiate termination rates above cost for any positive income effect. This also holds when operators discriminate between on‐net and off‐net calls if networks are differentiated. Operators profit from increasing termination rates above cost under second‐degree price discrimination if a sufficient share of consumers prefer on‐net/off‐net contracts and their subscription demand is relatively inelastic.

We consider situations where a society tries to efficiently allocate several homogeneous and indivisible goods among agents. Each agent receives at most one unit of the good. For example, suppose that a government wishes to allocate a fixed number of licenses to operate in its country to private companies with highest abilities to utilize the licenses. Usually companies with higher abilities can make more profits by licenses and are willing to pay higher prices for them. Thus, auction mechanisms are often employed to extract the information on companies' abilities and to allocate licenses efficiently. However, if prices are too high, they may damage companies' abilities to operate. Generally high prices may change the benefits agents obtain from the goods unless agents' preferences are quasi-linear, and we call it 'income effect'. In this paper, we establish that on domains including nonquasi-linear preferences, that is, preferences exhibiting income effect, an allocation rule which satisfies Pareto-efficiency, strategy-proofness, individual rationality, and nonnegative payment uniquely exists and it is the Vickrey allocation rule.

We study the impact of stricter and more harmonized banking regulation along the income distribution using household survey data for 25 EU countries. Exploiting country-level heterogeneity in the implementation of European Banking Union directives allows us to control for confounders and identify effects. Our results show that these regulatory reforms aimed at increasing financial system resilience affected households heterogeneously. More stringent regulation reduces income growth for low-income households due to employment exits. Yet it tends to increase growth rates at the top of the distribution both for employee and self-employed income.

"Studies of the consumption-smoothing benefits of unemployment insurance (UI) have found that the optimal benefit level is very small, perhaps even 0, for conventional levels of risk aversion. In this paper, I derive a formula for the optimal benefit rate in terms of income and price elasticities of unemployment durations, directly inferring risk aversion for the unemployed from their behavioral responses to UI benefits. The optimal rate of social insurance is shown to depend positively on the size of the income elasticity and negatively on the size of the substitution elasticity. I estimate these elasticities using semi-parametric hazard models and variation in UI laws across states and over time. The estimates indicate that income effects account for 70% of the effect of UI on unemployment durations, and yield an optimal replacement rate around 50% of pre-unemployment wages. These results challenge the prevailing view that social safety nets provide minimal welfare gains at a large efficiency cost"--National Bureau of Economic Research web site

Previous research has confirmed a positive association between income and health, but there are still a lot of inconsistencies on how income affects health. Indeed, this impact is caused by overlaying of absolute income and relative income effects, and only by decomposing and comparing their relative importance within an integrated framework can suggestions be made for health inequalities and health intervention. To deal with this issue, using the panel data from the 2011, 2014, and 2017 waves of the Chinese Longitudinal Healthy Longevity Survey (CLHLS), a well-designed research model is established to decompose and explore the impact. Our results indicate that relative income, rather than absolute income, has a significant negative impact on health performance, and that these associations may be causal in nature. The health inequity persists throughout the life cycle, but it remains relatively stable, without significant expansion or convergence. To some extent, the research-proposed models enrich the related literature on associations between income and health, and the empirical results suggest that as China moves to the stage of higher incomes and accelerated aging, the Chinese government should pay more attention to income inequality and be alert to the risks of "income-healthy poverty" traps.