nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2014‒01‒17
twenty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Convergence in Health Care Expenditure of 14 EU Countries: New Evidence from Non-linear Panel Unit Root Test By Lau, Marco Chi Keung; Fung, Ka Wai Terence
  2. Transitions in labour market status in the European Union By Melanie Ward-Warmedinger; Corrado Macchiarelli
  3. Does Retirement Induced through Social Security Pension Eligibility Influence Subjective Well-being? A Cross-Country Comparison By Arie Kapteyn; Jinkook Lee; Gema Zamarro
  4. Induced Transnational Preference Change: Fukushima and Nuclear Power in Europe By Heinz Welsch; Philipp Biermann
  5. Energy Efficiency and Industrial Output: The Case of the Iron and Steel Industry By Florens Flues; Dirk Rübbelke; Stefan Vögele
  6. Origin of FDI and domestic productivity spillovers: does European FDI have a ‘productivity advantage’ in the ENP countries? By Vassilis Monastiriotis
  7. Globalized Market for Talents and Inequality: What Can Be Learnt from European Football? By Chrysovalantis VASILAKIS
  8. Properties of knowledge base and firm survival: Evidence from a sample of French manufacturing firms By Alessandra Colombelli; Jackie Krafft; Francesco Quatraro
  9. Inter-format competition among retailers: The role of private label products in market delineation By Haucap, Justus; Heimeshoff, Ulrich; Klein, Gordon J.; Rickert, Dennis; Wey, Christian
  10. Innovation Complementarity and Environmental Productivity Effects: Reality or Delusion? Evidence from the EU By Marianna Gilli; Susanna Mancinelli; Massimiliano Mazzanti
  11. Introducing activity-based payment in the hospital industry: Evidence from French data By P. CHONÉ; F. EVAIN; L. WILNER; E. YILMAZ
  12. CROSS-COUNTRY EVIDENCE ON THE CAUSAL RELATIONSHIP BETWEEN POLICY UNCERTAINTY AND HOUSE PRICES By Ghassen El Montasser; Ahdi N. Ajmi; Tsangyao Chang; Beatrice D. Simo-Kengne; Christophe Andre; Rangan Gupta
  13. Housing wealth accumulation : The role of public housing By Florence Goffette-Nagot; Modibo Sidibé
  14. Does the cost of child care affect female labor market participation? An evaluation of a French reform of childcare subsidies By P. GIVORD; C. MARBOT
  15. A Quantitative Assessment of the Implications of Including non-CO2 Emissions in the European ETS By Carlo Orecchia; Ramiro Parrado
  16. The Effect of Within-Sector, Upstream and Downstream Energy Taxes on Innovation and Productivity By Chiara Franco; Giovanni Marin
  17. The impact of venture capital investment duration on the survival of French IPOs By Sophie Pommet
  18. Evaluating a decade of mobile termination rate regulation By Christos Genakos; Tommaso Valletti
  19. Wages and Labour Productivity: the role of performance-related pay in Italian firms By Mirella Damiani; Fabrizio Pompei; Andrea Ricci
  20. Luck vs Skill in Gambling over the Recession. Evidence from Italy By S. Capacci; E. Randon; A. E. Scorcu

  1. By: Lau, Marco Chi Keung; Fung, Ka Wai Terence
    Abstract: This paper attempts to examine the convergence hypothesis of health care expenditure per capita of 14 European Union (EU) countries during the 1975–2008 period by applying the Cerrato et al., (2009) nonlinear panel unit root test. Although the conventional linear panel unit root tests reject the null uniformly, the Cerrato et al., (2009) test shows evidence that one cannot reject the null hypothesis of unit root for health care expenditures of each country relative to the EU average, after taking nonlinearity into account. Our results are robust using different reference countries. The empirical findings imply that the exisitng “ EU health policy reforms” and “ European law on health care provision” may not able to encourage greater health care convergence in EU.
    Keywords: Health care expenditures, Nonlinear Panel Unit Root Tests, EU Health Reform
    JEL: I0 I18
    Date: 2013
  2. By: Melanie Ward-Warmedinger; Corrado Macchiarelli
    Abstract: This paper presents information on labour market mobility in 23 EU countries, using Eurostat’s Labour Force Survey (LFS) data over the period 1998-2008. More specifically, it discusses alternative measures of labour market churning; including the ease with which individuals can move between employment, unemployment and inactivity over time. The results suggest that the probability of remaining in the same labour market status between two consecutive periods is high for all countries. Nonetheless, transitions from unemployment and inactivity back into the labour market are relatively weak in the euro area and central eastern European EU (CEE EU) countries compared to Denmark and, particularly, Sweden. Moreover, comparisons of transition probabilities over time suggest that – until the onset of the financial crisis – the probability of remaining in unemployment over two consecutive periods decreased in Sweden, the euro area, and, to a lesser extent, Denmark, while it increased in the average CEE EU countries. At the same time, however, successful labour market entries (from outside the labour market) increased in the average CEE EU countries, Denmark and Sweden. On the basis of an index for labour markets turnover used in the paper (Shorrocks, 1987), labour markets in Spain, Luxemburg, the Netherlands, Denmark and Sweden are the most mobile on average, with these results mainly reflecting higher mobility of people below the age of 29, highly educated and female workers. We also find that mobility of all worker groups has generally increased over time in the euro area, Denmark and Sweden. Finally, we ask whether some of the observed changes in mobility can be broadly restraint to some “macro” explanatory factors, including part time and temporary employment, unemployment and structure indicators. The results provide a mixed picture, suggesting that the sense of mobility strongly varies across countries.
    Keywords: Transition probabilities, labour market mobility, LFS micro data, EU countries
    JEL: J21 J60 J82 E24
    Date: 2013–11
  3. By: Arie Kapteyn (University of Southern California, Dornsife Center for Economic and Social Research); Jinkook Lee (RAND); Gema Zamarro (University of Southern California, Dornsife Center for Economic and Social Research)
    Abstract: How does retirement influence subjective well-being? Some studies suggest retirement does not affect subjective well-being or may improve it. Others suggest it adversely affects it. This paper aims at advancing our understanding of the effect of retirement on subjective well-being by (1) using longitudinal data to tease out the retirement effect from age and cohort differences; (2) using instrumental variables to address potential reverse causation of subjective well-being on retirement decisions; and (3) conducting cross-country analyses, exploiting differences in eligibility ages for retirement benefits across countries and within countries. We use panel data from the US Health and Retirement Study and the Survey of Health, Ageing, and Retirement in Europe. This allows us to use a quasi-experimental approach where variations in public pension eligibility due to country and cohort specific retirement ages help identify retirement effects. For both the U.S. and Europe we find that retirement is associated with higher levels of depression. However, when we use instrumental variables we find the opposite result. Retirement induced through Social Security pension eligibility is found to have a positive effect, reducing depression symptoms, although only marginally significant for the U.S. when considering the depression indicator. Retirement is not found to have a significant effect on life satisfaction measures for either the U.S. or Europe.
    Date: 2013–10
  4. By: Heinz Welsch (University of Oldenburg, Institut für Volkswirtschaftslehre & ZenTra); Philipp Biermann (University of Oldenburg, Institut für Volkswirtschaftslehre)
    Abstract: We test whether the relationship between subjective well-being (SWB) of European citizens and the structure of electricity supply has changed after the Fukushima nuclear accident of March 11, 2011. Survey data for about 124,000 individuals in 23 European countries reveal that while European citizens’ SWB was statistically unrelated to the share of nuclear power before the Fukushima disaster, it was negatively related to the nuclear share after the disaster. Taking the relationship between SWB and the electricity supply structure as an indicator of preference, this suggests the existence of an induced transnational preference change.
    Keywords: transnational preference change; subjective well-being; nuclear power; Fukushima
    JEL: Q42 Q54 I31
    Date: 2013–12
  5. By: Florens Flues (OECD, France, formerly Zentrum für Europäische Wirtschaftsforschung (ZEW), Germany); Dirk Rübbelke (Basque Centre for Climate Change (BC3), and IKERBASQUE – Basque Foundation for Science, Spain); Stefan Vögele (Institute for Energy and Climate Research - Systems Analysis and Technology Evaluation, Forschungszentrum Jülich (IEK-STE), Germany)
    Abstract: The iron and steel industry is one of the most carbon emitting and energy consuming sectors in Europe. At the same time this sector is of high economic importance for the European Union. Therefore, while public environmental and energy policies target this sector, there is political concern that it suffers too much from these policy measures. Various actors fear a policy-induced decline in steel production, and possibly an international reallocation of production plants. This study analyzes the role that input prices and public policies may play in attaining an environmentally more sustainable steel production and how this - in turn - affect total steel output. As we find out for examples of major European steel producing countries, a kind of rebound effect of energy-efficiency improvements in steel production on total steel output may arise.
    Keywords: Energy Efficiency, Iron And Steel Industry, Environmental Protection, Rebound Effect
    JEL: L51 L61 Q43 Q50
    Date: 2013–11
  6. By: Vassilis Monastiriotis
    Abstract: The process of approximation between the EU and its ‘eastern neighbourhood’ has created conditions for deepening economic interactions and market integration, giving to the EU –and to EU businesses– an elevated role in the process of economic modernisation and transition in the neighbourhood countries. This raises the question as to whether European business activity in these countries produces indeed measureable economic advantages both in absolute and in relative terms (e.g., compared to business activity from other parts of the world). Similarly, a question arises as to whether European business activity reduces or amplifies spatial imbalances within the partner countries. This paper examines these issues for the case of capital flows (foreign ownership) and the related productivity spillovers, using firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS) covering 28 transition countries over the period 2002-2009. We estimate the direct and intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), according to the origin of the foreign investor (EU versus non-EU), across geographical scales (pure industry versus regional spillovers) and for different types of locations (capital-city regions versus the rest). Our results suggest that FDI of EU origin plays a distinctive role in the countries concerned helping raise domestic productivity significantly more than investments from outside the EU. However, this process appears to operate in a spatially selective manner, thus enhancing regional disparities and spatial imbalances. This, then, assigns a particular responsibility for EU policy, as it continues to promote economic integration (and FDI flows) to its eastern neighbourhood, to devise interventions that will help redress these problems.
    JEL: Z00
    Date: 2014–01
  7. By: Chrysovalantis VASILAKIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: This paper takes advantage of the availability of rich panel data on the mobility of talented football players, and the performances of national leagues and teams to quantify the effect of the reduction in mobility restrictions, the 1995 Bosman rule, on global efficiency and cross-country inequality in football. I built a micro-founded model endogenizing migration decisions, inequality and training; I estimated its structural parameters; and I used numerical simulations to compare actual data with a counterfactual no-Bosman trajectory. I found that the Bosman rule (i) increased global efficiency in football by 20% (ii) increased cross-leagues inequality in performance by 25% in terms of output, and (iii) decreased inequality across national teams by 70% .Countries from Africa, South (except Argentina and Brazil) and Central America have produced more talents and benefitted from brain-gain type effects. My results also show that this brain-gain mechanism is the major source of efficiency gains. However, it plays only a minor role in explaining the rising inequality.
    Keywords: International Migration, Brain Drain, Globalization, Inequality, European Football
    JEL: F22 J61
    Date: 2014–01–08
  8. By: Alessandra Colombelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS]); Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS]); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS])
    Abstract: The paper analyzes the effects of the properties of firms' knowledge base on the survival likelihood of firms. Drawing upon the analysis of the patterns of co-occurrence of technological classes in patent applications, we derive the coherence, variety and cognitive distance indexes, accounting respectively for technological complementarity, differentiation and dissimilarity in the firms' patent portfolios. The results of our analysis are in line with the previous literature, showing that innovation enhances the survival likelihood of firms. In addition, we show that the search strategies at work in the development of firms' knowledge base matter in reducing the likelihood of a failure event. Knowledge coherence and variety appear to be positively related to firms' survival, while cognitive distance exerts a negative effect. We conclude that firms able to exploit the accumulated technological competences have more chances to be successful in competing durably in the market arena, and derive some policy implications concerning the role of public intervention in the orientation of search efforts in local contexts.
    Keywords: Knowledge coherence; Variety; Cognitive distance; Firms' survival
    Date: 2013–10–01
  9. By: Haucap, Justus; Heimeshoff, Ulrich; Klein, Gordon J.; Rickert, Dennis; Wey, Christian
    Abstract: This paper analyses the extent of inter-format retail competition between supermarkets, discounters and drugstores in Germany, using data from the German market for diapers. We estimate a random coefficient logit model at the individual household level. Based on consumer substitution patterns, we calculate manufacturers' and retailers' estimated marginal costs and margins and, based on these margins, apply standard market delineation techniques which suggest that the strongest substitution patterns are between the leading manufacturer brand and private labels sold at drugstores and discounters. This finding contrasts with recent speculations by competition authorities that private label products may belong to a different antitrust market than manufacturers' brands. --
    Keywords: Discrete Choice,Demand Estimation,Market Delineation,Grocery Retail Markets,Antitrust
    JEL: L1 L4 L8 C5
    Date: 2013
  10. By: Marianna Gilli (University of Ferrara, Italy); Susanna Mancinelli (University of Ferrara, Italy); Massimiliano Mazzanti (University of Ferrara & Ceris Cnr Milan, Italy)
    Abstract: Innovation is a key element behind the achievement of desired environmental and economic performances. Regarding CO2, mitigation strategies would require cuts in emissions of around 80-90% with respect to 1990. We investigate whether complementarity, namely integration, between the adoption of environmental innovation measures and other technological and organizational innovations is a factor that has supported reduction in CO2 emissions per value added, that is environmental productivity. We merge new EU CIS and WIOD meso level data to assess the innovation effects on sector CO2 performances at a wide EU level. We find that jointly adopting different innovations is not a significant factor to increase environmental productivity, neither for the entire economy nor for manufacturing or narrower ETS sectors. The only case where a complementarity arises is for Northern EU manufacturing sectors that integrate eco innovations with product and process innovations to support environmental productivity. We believe that the lack of integrated innovation adoption behind environmental productivity performance is a signal of the current weaknesses economies face in tackling climate change and green economy challenges. Incremental rather than more radical strategies have predominated so far; this is probably insufficient when we look at long-term economic and environmental goals.
    Keywords: Complementarity, Innovation, Climate Change, Sector Performance
    Date: 2013–10
  11. By: P. CHONÉ (Insee); F. EVAIN (Insee); L. WILNER (Insee); E. YILMAZ (Insee)
    Abstract: Many countries have reformed hospital reimbursement policies to provide stronger incentives for quality and cost reduction. The purpose of this work is to show how the effect of such reforms depends on the intensity of local competition. We build a nonprice competition model to examine the effect of a shift from global budget to patient-based payment for public hospitals in France. We predict that the number of patient admissions should increase in public hospitals by more than in private clinics and that the increase in admissions should be stronger in public hospitals that are more exposed to competitive pressure from private clinics. Considering the reform implemented in France between 2005 and 2008, we find empirical evidence supporting these predictions: the activity increased up to 10% in public hospitals more exposed to competitive pressure from private clinics while it hardly raised by 4% in public hospitals less exposed to such a competitive pressure, in comparison with private clinics.
    Keywords: Health care markets, prospective payment system, local competition, not-for-profit hospitals
    JEL: I11 I18 L33
    Date: 2013
  12. By: Ghassen El Montasser (École Supérieure de Commerce de Tunis, Université de la Manouba); Ahdi N. Ajmi (College of Science and Humanities in Slayel, Salman bin Abdulaziz University, Kingdom of Saudi Arabia); Tsangyao Chang (Department of Finance, Feng Chia University, Taichung, Taiwan); Beatrice D. Simo-Kengne (Department of Economics, University of Pretoria); Christophe Andre (Economics Department, Organisation for Economic Co-operation and Development (OECD)); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper empirically examines the causal linkages between policy uncertainty and house prices in a panel of seven advanced countries including Canada, France, Germany, Italy, Spain, the UK and the US. We implement a bootstrap panel causality test on quarterly data from 2001Q1 to 2013Q1, which allows us to circumvent the data limitation as observations are pooled across countries. Empirical results provide evidence of a bi-directional causality between real house prices and policy uncertainty, suggesting that high uncertainty related to future economic fundamentals and policies increases house price volatility, which in turn may amplify financial and business cycles. This finding is consistent with individual results for France and Spain, while contrasting with the unidirectional causality reported in the remaining countries. Particularly, support for a unidirectional causality running from policy uncertainty to real house prices is found in Canada, Germany and Italy, while a unidirectional causality running from real house prices to policy uncertainty prevails in the UK and the US.
    Keywords: House prices, Uncertainty, Cross-section Dependence and Heterogeneity, Panel Causality Test
    JEL: C32 C33 G18 R31
    Date: 2013–12
  13. By: Florence Goffette-Nagot (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Modibo Sidibé (Duke University, Department of Economics, Duke University, United States)
    Abstract: The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise. In this paper, we analyze the e-ffect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the speci-cities of the local housing market, to derive individual tenure transitions from multiple cross-sections data. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before -first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France, the public housing policy provides an important pathway to homeownership.
    Keywords: Homeownership, Public housing, Tenure choice, Duration model, Unobserved heterogeneity
    JEL: R21 R31 R38 C41
    Date: 2013
  14. By: P. GIVORD (Insee); C. MARBOT (Insee)
    Abstract: This study evaluates the impact of an increase in childcare subsidies on the use of paid childcare and the participation rate of mothers of preschool children. We use a natural experiment provided by the PAJE, a French reform in family allowances introduced in 2004. This reform temporarily created discrepancies in the childcare subsidies family received according to the year of birth of the children. We apply a difference-in-differences strategy on exhaustive French fiscal data that provide information on gross income as well as on the use of paid childcare services between 2005 and 2008. We find that the new policy resulted in a significant increase in the use of paid childcare services. The effect on the mothers' labour participation is significant but of a smaller magnitude. This suggests that part of the policy resulted in a substitution of informal childcare by formal ones.
    Keywords: Mother's labour supply, Child care subsidy, Difference-in-Differences
    JEL: D13 H24 H31
    Date: 2013
  15. By: Carlo Orecchia; Ramiro Parrado (Fondazione Eni Enrico Mattei (FEEM), and Euro-Mediterranean Center on Climate Change (CMCC), Italy)
    Abstract: Although CO2 emissions stand for most of greenhouse gas (GHG) emissions, the contribution of mitigation efforts based on non-CO2 emissions is still a field that needs to be explored more thoroughly. Extending abatement opportunities to non-CO2 could reduce overall mitigation costs but it could also exert a negative pressure on agricultural output. This paper offers insights about the first effect while provides a preliminary discussion for the second. We investigate the role of non-CO2 GHGs in climate change mitigation in Europe using a computable general equilibrium (CGE) model. We develop a specific modelling framework extending the model with non-CO2 GHGs as an additional mitigation alternative. These modifications allow us to analyse the implications for the European Union (EU) of including non-CO2 GHG emissions in its cap and trade system. We distinguish two targets on all GHG emissions for 2020, a reduction by 20% and 30% with respect to 1990 levels. Within each reduction cap, we consider two mitigation opportunities by means of a carbon tax levied on: 1) CO2 emissions only, and 2) All GHGs emissions (both CO2 and non-CO2 GHG). Results show that a multi-gas mitigation policy would slightly decrease policy costs compared to the CO2 only alternative.
    Keywords: CGE, Greenhouse gas emissions, Cap-and-trade system, Agriculture, Non-CO2 emissions, European Union, Effort Sharing Decision
    JEL: Q5 Q58
    Date: 2013–11
  16. By: Chiara Franco (Catholic University); Giovanni Marin (Ceris-CNR, Institute for Economic Research on Firms and Growth, National Research Council of Italy)
    Abstract: The aim of the paper is to investigate the effect of environmental stringency on innovation and productivity using a cross-country panel made up of 7 European countries for 13 manufacturing sectors over the years 2001-2007. This research topic goes under the heading of Porter Hypothesis (PH) of which different versions have been tested. We take into consideration both the strong and the weak versions while adding some peculiarities to the analysis. Firstly, we assess the role played by a specific environmental regulation, that is energy taxes, that have rarely been empirically tested as factors that can favour PH hypothesis to be verified. Secondly, we do not consider, within the same framework, only the effect of energy taxes in the same sector (within-sector), but also the role played by energy taxes in upstream and downstream sectors in terms of input-output relationship. Thirdly, we test these relationships also “indirectly” by verifying whether innovation can be one of the channels through which higher sectoral productivity can be reached. The main findings suggest that downstream stringency is the most relevant driver for innovation and that most of the effect of regulation on productivity is direct, while the part of the effect mediated by induced innovation is not statistically significant.
    Keywords: Energy Taxes, Porter Hypothesis, Upstream, Downstream
    JEL: L6 O13 Q55
    Date: 2013–12
  17. By: Sophie Pommet (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS])
    Abstract: Using a sample of 212 IPOs, this paper analyzes the impact of venture capital involvement on the survival time of French IPOs. We find that the ability of venture capitalists to improve the survival of companies is related to the duration of their investment. We show that venture capitalists do not create additional value if investment duration is too short while longer duration allows venture capitalists to monitor the firm efficiently. Our paper provides some interesting results that qualify the findings from empirical studies that highlight the absence of a positive effect of this financing on firm performance in France.
    Keywords: Venture Capital, IPO, Survival, France
    Date: 2013
  18. By: Christos Genakos (Athens University of Economics and Business); Tommaso Valletti (University of Rome Tor Vergata, Imperial College and CEPR)
    Abstract: We re-consider the impact that regulation of call termination on mobile phones has had on mobile customers’ bills. Using a large panel covering 27 countries, we find that the “waterbed” phenomenon, initially observed until early 2006, has disappeared over the 10-year period, 2002-2011. We argue that this is due to the changing nature of the industry, whereby mobile-to-mobile traffic now plays a much bigger role compared to fixed-to-mobile calls in earlier periods. This implies that regulation does not have unintended consequences anymore. Over the same decade, there is no evidence that regulation caused a reduction in mobile operators’ profits and investments.
    Keywords: regulation, telephony, termination rates, waterbed effect
    JEL: L4 L9
    Date: 2014–01–10
  19. By: Mirella Damiani; Fabrizio Pompei; Andrea Ricci
    Abstract: This paper analyses the role of Performance Related Pay (PRP) agreements on labour productivity and wages. Its main contribution is thus to investigate the effects of PRP on both dimensions, i.e. productivity and distribution, whereas most of the studies of related literature are restricted to one of those aspects. All estimates are performed for a large sample of manufacturing and service Italian firms with more than five employees and a restricted sample including only unionised firms. It allows us to focus on a relevant feature of industrial relations represented by worker representation and its role in local wage setting in the Italian economy. The expected positive link between PRP and firm performance has been confirmed in all estimates, also controlling for a rich set of covariates. Furthermore, the comparison of productivity estimates with those for wages allows us to ascertain that payments by results might be not only rent-sharing devices, but schemes that substantially lead to efficiency enhancements. These findings have been validated by a number of robustness checks, also taking into account endogen eity by using instrumental variables and the treatments of 3SLS. The paper argues that well designed policies, that circumvent the limited implementation of PRP practices, would guarantee productivity improvement. The real effectiveness of these measures would not be weakened under union governance.
    Keywords: Efficiency, Wages, Performance–related pay, unions.
    JEL: D24 J31 J33 J51
    Date: 2013–11–18
  20. By: S. Capacci; E. Randon; A. E. Scorcu
    Abstract: We perform an econometric analysis of the gambling market in Italy over the recession (2009-2012), observing the consumption patterns in "luck" and "skill" games. We find a different effect between the early and late period of the crisis. Whereas gambling initially behaves as normal good, in the long run luck games increase with the worsening of economic conditions. Moreover, skill games are more persistent and influence luck games, but not the opposite. Skill players choose simple lottery games, but luck players cannot handle complex games. Our results provide insights on investment choices in financial markets among expert and naïve buyers.
    JEL: D12 L83 G01
    Date: 2014–01

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