nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2013‒02‒08
thirteen papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. A spatial competitive analysis: the carbon leakage effect on the cement industry under the European Emissions Trading Scheme By Elisabetta Allevi; Giorgia Oggioni; Rossana Riccardi; Marco Rocco
  2. Explaining regional unemployment differences in Germany: a spatial panel data analysis By Franziska Lottmann
  3. Renewable energy consumption and economic efficiency: Evidence from European countries By Halkos, George; Tzeremes, Nickolaos
  4. Cross-border infrastructure constraints, regulatory measures and economic integration of the Dutch - German gas market By Mulder, Machiel; Kuper, Gerard
  5. The housing wealth of Italian households: a comparison of administrative and survey data By Andrea Neri; Maria Teresa Monteduro
  6. Economic Efficiency, Environmental Effectiveness and Political Feasibility of Energy Efficiency Rebates: The Case of the Spanish Energy Efficiency “Renove†Plan By Ibon Galarraga; Luis M. Abadie; Alberto Ansuategi
  7. Intertemporal remittance behaviour by immigrants in Germany By Giulia Bettin; Riccardo Lucchetti
  8. Why are payment habits so heterogeneous across and within countries? Evidence from European countries and Italian regions By Guerino Ardizzi; Eleonora Iachini
  9. Dynamics of productivity and cost of labor in Italian Manufacturing firms By G. Bottazzi; M. Grazzi
  10. The Tortuous Ways of the Market: Looking at the European Integration of Higher Education from an Economic Perspective By Pedro Teixeira
  11. The History of an Inferior Good: Beer Consumption in Germany By Benjamin Volland
  12. Perceptions of unreported economic activities in Baltic Firms. Individualistic and non-individualistic motives By Jaanika Meriküll; Tairi Rõõm; Karsten Staehr
  13. Comparing Public and Private Sector Pay in Ireland: Size Matters By Kelly Elish; McGuinness Seamus; O'Connell Philip J.

  1. By: Elisabetta Allevi (University of Brescia); Giorgia Oggioni (University of Brescia); Rossana Riccardi (University of Brescia); Marco Rocco (Bank of Italy)
    Abstract: The European Emissions Trading Scheme (ETS) is a cap and trade system to curb CO2 emissions. It has caused both direct costs (CO2 allowances) and indirect costs (higher electricity prices) to energy-intensive industries. Moreover, as there is no global CO2 agreement, the ETS could distort the European economy, prompting energy-intensive industries to relocate production to unregulated countries: the “carbon leakage” effect. This paper investigates the impact of ETS on the cement industry, focusing on Italy, the second European producer, analyzing a Cournot oligopolistic partial equilibrium model with a detailed technological representation of the market. Simulation results show that the European and Italian cement markets are subject to carbon leakage, especially where carbon regulation is more stringent and where plants are located near the seacoast. Further, transportation costs - particularly high in the cement sector - significantly affect the rate of carbon leakage.
    Keywords: carbon leakage, cement sector, ETS, generalized Nash game
    JEL: C60 D43 D58 C61 Q50
    Date: 2013–01
  2. By: Franziska Lottmann
    Abstract: This paper analyzes determinants for regional differences in German unemployment rates. We specify a spatial panel model to avoid biased and inefficient estimates due to spatial dependence. Additionally, we control for temporal dynamics in the data. Our study covers the whole of Germany as well as East andWest Germany separately. We exploit district-level data on 24 possible explanatory variables for the period from 1999 until 2007. Our results suggest that the spatial dynamic panel model is the best model for this analysis. Furthermore, we find that German regional unemployment is of disequilibrium nature, which justifies political interventions.
    Keywords: regional unemployment, spatial dependence, spatial panel models, Germany
    JEL: C23 R12 R23
    Date: 2012–03
  3. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper examines the relationship between renewable energy consumption and economic efficiency. For this reason conditional Data Envelopment Analysis (DEA) estimators alongside with nonparametric regressions are applied in a sample of 25 European countries for the year 2010. Our results reveal that renewable energy consumption has a positive effect on countries’ economic efficiency for lower consumption levels while for higher levels the analysis reveals mixed effects, which are also subject to regional disparities. Finally, it appears that the effect of renewable energy consumption on countries’ economic efficiency depends also on countries’ specific regional characteristics as well as on the environmental policies adopted.
    Keywords: Renewable energy consumption; economic efficiency; data envelopment analysis; nonparametric regression
    JEL: C14 Q40 Q01 Q20 C60 O44
    Date: 2013–02–02
  4. By: Mulder, Machiel; Kuper, Gerard (Groningen University)
    Abstract: We estimate to which extent regulatory measures in the Dutch market have reduced the vulnerability of this market to constraints in the cross-border infrastructure with Germany, which is the largest Dutch neighbouring market. We measure this vulnerability by the degree the markets are integrated, i.e. to which extent the gas prices differ between the Dutch market (Title Transfer Facility or TTF) and the German market (NetConnectGermany or NCG). The constraints are measured through the utilisation of the cross-border infrastructure. We find evidence that the introduction of a market-based balancing regime together with the obligation to deliver all gas on the TTF on 1 April 2011 reduced the impact of the utilisation the Dutch-German cross-border infrastructure on the differences in prices between these countries.
    Date: 2013
  5. By: Andrea Neri (Bank of Italy); Maria Teresa Monteduro (Italian Ministry of Economy and finance)
    Abstract: We study the distribution of housing wealth in Italy using data from a sample survey (the survey on household income and wealth) and from administrative records regarding real estate owners held by the Italian Department of the Treasury. Our results show that owners with either a low or a high number of properties are under-represented in the survey. After adjusting survey data using the information from the administrative records, average housing wealth increases by some 25 per cent (in relation to the survey results). We find no clear evidence of a bias in the estimate of the level of inequality nor in the association between housing wealth and socio-demographic characteristics.
    Keywords: housing wealth, wealth distribution, measurement errors
    JEL: C83 C14 D31
    Date: 2013–01
  6. By: Ibon Galarraga; Luis M. Abadie; Alberto Ansuategi
    Abstract: Energy labels are used to promote the purchase of efficient appliances. Many countries in Europe use subsidies (namely energy efficiency rebates) to support these purchases as it is the case of Spain. A figure ranging from 50 to 105€ subsidy has been granted in the past for the acquisition of the most efficient appliances. This paper first analyses the impact of a 80€ subsidy on the dishwasher market and compares the results with a 40 € tax for non-labelled ones. The results take into account the effects that the policies generate in the market segment that is a close substitute, that is, cross effects. The paper shows that the subsidy is expensive for the Government, generates some welfare losses and it also generates a rebound effect as a consequence of the increase in the total number of appliances sold. The 40 € tax does not cost money to the Government, it generates a lower welfare loss and reduces the energy bill. However, the analysis is extended to go beyond the two extreme scenarios: subsidies without taxes and taxes without subsidies. Different combinations of both instruments are suggested and they are assessed based on their performance regarding economic efficiency, environmental effectiveness and political feasibility.
    Keywords: Energy efficiency rebates, deadweight losses, rebound effect
    Date: 2013–02
  7. By: Giulia Bettin (Hamburg Institute of International Economics (HWWI), Germany); Riccardo Lucchetti (Universit… Politecnica delle Marche, Department of Economics)
    Abstract: In this paper, we use data from the German Socio-Economic Panel (SOEP) in the 1997-2009 period for a large sample of migrants from 84 countries in order to develop an empirical model for the propensity by migrants to remit. Our model takes into full account the intertemporal aspects of the problem, which has been ignored by a large part of the applied literature, despite its theoretical and empirical importance. We find that most results already established in the empirical literature are confirmed; however, the intertemporal nature of the remittance behaviour emerges very clearly, giving rise to individual patterns which are difficult to synthesize by a simple description. Building on our framework, we find also support for theoretical models which predict different remittance time paths between return and permanent migrants.
    Keywords: German Socio Economic Panel, Migration, Remittances
    JEL: F22 F24
    Date: 2012–10
  8. By: Guerino Ardizzi (Bank of Italy); Eleonora Iachini (Bank of Italy)
    Abstract: The aim of this work is to arrive at a better understanding of the underlying reasons for the slow adoption of electronic payment instruments in Italy. Our findings indicate that a pivotal role in explaining Italy’s lag in abandoning cash is played by development factors, such as innovative capability and income per capita. Surprisingly, although the shadow economy is important, it is not decisive in explaining the limited use of electronic retail payment instruments.
    Keywords: payment instruments, cash demand, financial inclusion, retail payments
    JEL: E26 E42 E41
    Date: 2013–01
  9. By: G. Bottazzi; M. Grazzi
    Abstract: This paper studies the impact of size on labor cost and productivity for Italian manufacturing firms. The distributions of both labor cost and productivity display a wide support, even when disaggregated by sector of industrial activity. Further, both labor cost and productivity, when considered alone, are growing with the size of the firm. We investigate this relationship on a new set of data and we are able to show that once accounted for productivity differences among firms, size still retains a positive effect on cost of labor in most of the sectors considered.
    JEL: D21 J31 L11 L60
    Date: 2013–02
  10. By: Pedro Teixeira
    Abstract: European Higher education is facing times of significant change that has been affecting its identity and the political expectations regarding its societal roles. At the European level this has been fostered by a trend that increasingly regarded higher education as a tool for economic and social development. Hence, we have seen a reconfiguration of the sector alongside market rules, often through policy initiatives and government intervention. In this text we reflect about these developments by focusing in the emergence of a more integrated higher education area increasingly shaped by market forces and economic rationales. We reflect about the emerging and potential effects of greater integration in the European Higher Education Area.
    Keywords: EHEA, Markets, Integration, Inequality, Differentiation, Economics
    Date: 2013–01
  11. By: Benjamin Volland
    Abstract: The question whether alcohol in general, and different types of alcoholic beverages in particular (e.g., beer) are normal or inferior goods is a heavily disputed issue within economics and health research. Based on recently developed theories of preference adjustment this paper argues that the answer to this question may not be independent of the level of income itself. It therefore applies a gradual switching regression approach to aggregate beer consumption data in Germany from 1957 to 2007. This method allows elasticities to change over time, without prior specifications of the time and speed of adjustments. Results suggest that an important behavioral change is present in the data, as elasticities of beer demand shifted considerably between 1965 and 2004. In particular, they demonstrate that over this period beer shifted from being a normal to being an inferior good.
    Keywords: Beer demand, Inferior goods, Gradual switching regression
    JEL: D10 C22
    Date: 2013–01–31
  12. By: Jaanika Meriküll; Tairi Rõõm; Karsten Staehr
    Abstract: This paper analyses managerial dishonesty in the form of economic activity not reported to the authorities. We employ data from a survey of Baltic firm managers, who were asked to assess the prevalence of unreported profits, employment and wages in their industry and to give their views on a range of questions related to various reasons for dishonest behaviour. Unreported economic activities are perceived to be widespread, although their extent and composition vary across the three countries. We employ a principal component analysis of the survey answers and identify three clusters capturing both individualistic and nonindividualistic motives for dishonest behaviour: 1) reciprocity towards government; 2) rational choice related motives; and 3) norms towards society as proxied by the tolerance of illegal activities. The econometric analysis indicates that all three motives are related to perceptions of unreported activities in the Baltic countries
    Keywords: unreported economic activity, tax evasion, tax morale, norms, governance, social coherence, Baltic countries
    JEL: E61 F36 F41
    Date: 2013–02–04
  13. By: Kelly Elish; McGuinness Seamus; O'Connell Philip J.
    Keywords: Ireland/qec
    Date: 2013–01

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