nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2015‒12‒20
nineteen papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Homeownership of immigrants in France: selection effects related to international migration flows By Gobillon, Laurent; Solignac, Matthieu
  2. Price Changes in Regulated Healthcare Markets: Do Public Hospitals Respond and How? By R. Verzulli; G. Fiorentini; M. Lippi Bruni; C. Ugolini
  3. The youngest Get the Pill: ADHD Misdiagnosis and the Production of Education in Germany By Hannes Schwandt; Amelie Wuppermann
  4. Environmental Policies, Innovation and Productivity in the EU By Roberta De Santis; Cecilia Jona Lasinio
  5. Government quality and the economic returns of transport infrastructure investment in European regions By Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose
  6. Biased Judges: Evidence from French Environmental Cases By Pierre Bentata; Yolande Hiriart
  7. Time dedicated by consumers to cultural goods: Determinants for Spain By Molina, Jose Alberto; Campaña, Juan Carlos; Ortega, Raquel
  8. European Union gas market development By Tobias Baltensperger; Rudolf M. F\"uchslin; Pius Kr\"utli; John Lygeros
  9. Competitive Equilibrium in the Italian Wholesale Electricity Market By Simona BIGERNA; Carlo Andrea BOLLINO; Maria Chiara D'ERRICO; Paolo POLINORI
  10. European Identity and Redistributive Preferences By Joan Costa-i-Font; Frank Cowell
  11. Does the Extent of Per-Case Payment System Affect Hospital Efficiency? Evidence from the Italian NHS By Cavalieri, M.;; Guccio, C.;; Lisi, D.;; Pignataro, G.;
  12. R&D Spending and Investment Decision: Evidence from European Firms By O.A. Carboni; G. Medda
  13. A network-based analysis of the European Emission Market By Andreas Karpf; Antoine Mandel; Stefano Battiston
  14. Disability Benefit Generosity and Labor Force Withdrawal By Mullen, Kathleen J.; Staubli, Stefan
  15. Do you have to win it to fix it? A longitudinal study of lottery winners and their health care demand By Cheng,T.C.;; Costa-i-Font, J.;; Powdthavee, N.;
  16. Evolution and Determinants of Rent Burdens in Germany By Teresa Backhaus; Kathrin Gebers; Carsten Schröder
  17. Drivers of wealth inequality in euro area countries By Sebastian Leitner
  18. Dynamic Connectedness of UK Regional Property Prices By Antonakakis, Nikolaos; Chatziantoniou, Ioannis; Floros, Christos
  19. Measuring and Assessing Job Quality: The OECD Job Quality Framework By Sandrine Cazes; Alexander Hijzen; Anne Saint-Martin

  1. By: Gobillon, Laurent; Solignac, Matthieu
    Abstract: We investigate the difference in homeownership rates between natives and first-generation immigrants in France, and how this difference evolves over the 1975-1999 period, by using a large longitudinal dataset. We find that the homeownership gap is large and has increased. Entries into the territory have a large negative effect on the evolution of homeownership rates for immigrants. Although entrants have on average better education than people staying in the territory for the entire period (i.e. stayers), they are younger and thus at an earlier stage in the wealth accumulation process. They are also located in large cities, where the homeownership rate is lower, and the returns to their characteristics are lower than those for stayers. Leavers have a positive effect on the evolution of homeownership rates for immigrants because they have a low access to homeownership and they exit the country. But this effect is only one-third that of entrants. For stayers, we show that returns to characteristics change in favor of immigrants, which is consistent with assimilation theories. However, among stayers who access homeownership, immigrants end up in owned dwellings that are of lesser quality than natives.
    Keywords: homeownership; immigrants; longitudinal data
    JEL: J15 R21
    Date: 2015–12
  2. By: R. Verzulli; G. Fiorentini; M. Lippi Bruni; C. Ugolini
    Abstract: This paper examines the behaviour of public hospitals in response to the average payment incentives created by price changes for patients classified in different Diagnosis Related Groups (DRGs). Using panel data on public hospitals located within the Italian region of Emilia-Romagna, we test whether a one-year increase in DRG prices induced public hospitals to increase their volume of activity, and whether a potential response is associated with changes in waiting times and/or length of stay. We find that public hospitals reacted to the policy change by increasing the number of patients with surgical treatments. This effect was smaller in the two years after the policy change than in later years, and for providers with a lower excess capacity in the pre-policy period, whereas it did not vary significantly across hospitals according to their degree of financial and administrative autonomy. For patients with medical DRGs, instead, there appeared to be no effect on inpatient volumes. Our estimates also suggest that an increase in DRG prices either decreased or had no impact on the proportion of patients waiting more than six months. Finally, we find no evidence of a significant effect on patients’ average length of stay.
    JEL: I11 I12 I18
    Date: 2015–12
  3. By: Hannes Schwandt; Amelie Wuppermann
    Abstract: Attention Deficit/Hyperactivity Disorder (ADHD) is a leading diagnosed health condition among children in many developed countries but the causes underlying these high levels of ADHD remain highly controversial. Recent research for the U.S., Canada and some European countries shows that children who enter school relatively young have higher ADHD rates than their older peers, suggesting that ADHD may be misdiagnosed in the younger children due to their relative immaturity. Using rich administrative health insurance claims data from Germany we study the effects of relative school entry age on ADHD risk in Europe's largest country and relate the effects for Germany to the international evidence. We further analyze different mechanisms that may drive these effects, focusing on physician supply side and demand side factors stemming from the production of education. We find robust evidence for school-entry age related misdiagnosis of ADHD in Germany. Within Germany and internationally, a higher share of misdiagnoses are related to a higher overall ADHD level, suggesting that misdiagnoses may be a driving factor of high ADHD levels. Furthermore, the effects in Germany seem to be driven by teachers and parents in an attempt to facilitate and improve the production of education.
    Keywords: ADHD, misdiagnosis, age cut-off, education
    JEL: I1 I2 J1
    Date: 2015–12
  4. By: Roberta De Santis; Cecilia Jona Lasinio
    Abstract: In this paper we test the weak Porter hypothesis on a sample of European economies in the period 1995-2008. We focus on the channels through which tighter environmental regulation affects productivity and innovation. Our findings suggest that the “weak” Porter hypothesis cannot be rejected and that the choice of policy instruments is not neutral. In particular, market based environmental stringency measures seem to be the most suitable to stimulate innovation and productivity growth. Consistently with the strategic reorientation of environmental policies in the European Union since the end of the eighties, our results indicate that the EU might privilege market based instruments in order to meet more effectively the 2030 targets, especially through the channels of innovation and productivity enhancement.
    Keywords: environmental regulation, productivity, innovation, Porter hypothesis
    JEL: D24 Q50 Q55 O47 O31
    Date: 2015–11
  5. By: Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose
    Abstract: Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, in the case of Europe the relevant literature is increasingly failing to find a clear link between infrastructure investment and economic performance. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in EU regions during the period between 1995 and 2009. The results unveil a strong influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investments in motorways – the preferred option by local governments – yield significantly lower returns than the more humble but possibly more efficient secondary road. Government institutions also affect the returns of transport maintenance investment.
    Keywords: Transport infrastructure, Public capital investment, Economic growth, Institutions, Government quality, Regions, Europe
    JEL: R11 R40 R58
    Date: 2015–11
  6. By: Pierre Bentata (Université de Paris 2, CRED); Yolande Hiriart (Université de Bourgogne Franche-Comté, CRESE, IUF)
    Abstract: Using an original database of 614 judgements in the French supreme courts from 1956 to 2010, we test for possible biases in judges’ decisions in the field of environmental accidents, focusing on a difference in treatment between private parties and the government as litigant. Two separate institutions deal with environmental cases in France, namely the Conseil d’E´tat (Supreme Administrative Tribunal) for public utilities and central and local government, and the Cour de cassation (Supreme Civil Court) for private firms. We run bivariate Probit regressions to explain pro-defendant decisions and reversals of decisions. Overall, courts treat plaintiffs and defendants differently. A pro-defendant decision and a reversal of decision are less likely to occur: (i) when the appeal is initiated by the defendant rather than by the plaintiff; (ii) in the Conseil d’Etat rather than in the Cour de cassation. The Conseil d’Etat is harsher with defendants than the Cour de cassation. These results could be indicative of a bias of the lower administrative tribunals in favor of public utilities and/or the government.
    Keywords: environmental accidents, French cases, litigation, Appellate Courts, judicial review, judicial behavior, biased judges, administrative tribunals
    JEL: K13 K32 K41
    Date: 2015–12
  7. By: Molina, Jose Alberto; Campaña, Juan Carlos; Ortega, Raquel
    Abstract: This paper analyzes the time that consumers dedicate to a range of cultural goods (cinema, theatre, museums, and spectator sports) by estimating a SUR model with information from the Spanish Time Use Survey for 2009-2010. Thus, we bridge the gap in the literature of consumption that has omitted the determinants of the time adults spend on cultural goods. Our main results indicate that age influences the time spent going to cinemas and art exhibitions/museums in different ways. Older individuals spend less time going to cinemas, while younger individuals are less frequent visitors to art galleries and museums, and men spend more time than women at sporting events. A university level of education influences the time dedicated to these four activities in a positive and statistically significant manner, and larger families positively influence the time dedicated to attending sporting events.
    Keywords: Consumers, Cultural goods, Time use
    JEL: D12 J22 Z11
    Date: 2015–12–18
  8. By: Tobias Baltensperger; Rudolf M. F\"uchslin; Pius Kr\"utli; John Lygeros
    Abstract: The recently announced Energy Union by the European Commission is the most recent step in a series of developments aiming at integrating the EU's gas markets to increase social welfare (SW) and security of gas supply. Based on a spatial partial equilibrium model, we analyze the changes in consumption, prices, and SW up to 2022 induced by the infrastructure expansions planned for this period. We find that wholesale prices decrease slightly and converge at Western European levels, the potential of suppliers to exert market power decreases significantly, and consumer surplus increases by 15.9% in the EU. Our results allow us to distinguish three categories of projects: (i) New gas sources developed and brought to the EU markets. These projects decrease prices and increase SW in a large number of countries. The only project in this category is the Trans-Anatolian Gas Pipeline; (ii) Existing gas sources made available to additional countries. This leads to an increase of SW in the newly connected countries, and a decrease everywhere else. These projects mainly involve pipeline and regasification terminal capacity enhancements; (iii) Projects with a marginal effect on the (fully functioning) market. Most storage expansion projects fall into this category, plus the recently announced Turkish Stream. Our results indicate that if all proposed infrastructure projects are realized, the EU's single market will become a reality in 2019. However, we also find that SW can only be increased significantly for the EU as a whole if new gas sources become accessible. Consequently, we suggest that the EU should emphasize on measures to increase the available volumes, in particular once the integration of the market is completed. At the same time, efficiency gains, albeit decreasing SW, help to improve the situation of consumers and decrease the dependency of the EU as a whole on external suppliers.
    Date: 2015–12
  9. By: Simona BIGERNA; Carlo Andrea BOLLINO; Maria Chiara D'ERRICO; Paolo POLINORI
    Abstract: The market power analysis in electricity market is relevant for understanding the competitive development of the industry’s restructuring and the liberalization process. The paper analyzes the market power exercised by power generators in the Italian wholesale electricity market. Following the approach of Wolak (2003, 2009), the extent of market power is measured using the Lerner index computed as the inverse of arc elasticity of the residual demand faced by each Cournot competitors. Then, the market supply curves have been adjusted to entail market power effects and the new market resolutions were derived. The new equilibrium prices are the competitive ones and represent the market clearing price that would have been if the electricity market was competitive and the effects of unilateral market power were removed.
    Keywords: Market Power, Residual demand, Lerner Index, Transmission Congestion
    JEL: D43
    Date: 2015–12–01
  10. By: Joan Costa-i-Font; Frank Cowell
    Abstract: How important is spatial identity in shifting preferences for redistribution? This paper takes advantage of within-country variability in the adoption of a single currency as an instrument to examine the impact of the rescaling of spatial identity in Europe. We draw upon data from the last three decades of waves of the European Values Survey and we examine the impact of joining the single currency on preferences for redistribution. Our instrumentation strategy relies on using the exogenous effect of joining a common currency, alongside a battery of robustness checks and alternative instruments. Our findings suggest that joining the euro has a boosting effect on European identity; an opposite and comparable effect is found for national pride. We find that European identity increases preferences for redistribution, and that national pride exerts an equivalent reduction in preferences for redistribution.
    Keywords: spatial identity, Europe, welfare state support
    JEL: D69 O52 H53
    Date: 2015–09
  11. By: Cavalieri, M.;; Guccio, C.;; Lisi, D.;; Pignataro, G.;
    Abstract: Recently increasing public pressure to contain costs in the healthcare sector has led many national governments to introduce some type of prospective payment system and reduce the scope of global budgeting. This study investigates the extent to which the reimbursement systems of the Italian hospital sector have an impact on hospitals’ technical efficiency. Because of high variation in the financing and provision of healthcare servicesamong regions and hospitals, Italy represents an interesting case study to test these effects. A two-stage Data Envelopment Analysis was employed, in which the efficiency scores of all Italian hospitals were first calculated and then regressed on different environmental variables to capture the role of reimbursement systems. The results found a significant impact of the use of Diagnostic-Related Group-based prospective payment systems on hospitals’ efficiency.
    Keywords: hospital efficiency; Data Envelopment Analysis; prospective payment systems; hospital ownership type;
    JEL: C14 I11 I18
    Date: 2015–12
  12. By: O.A. Carboni; G. Medda
    Abstract: This paper investigates the role of research activity and other micro determinants, on firms' investment behaviour. The empirical analysis is based on a large representative and cross-country comparative sample of manufacturing firms across seven European countries. Given the potential simultaneity between investment decision and R&D spending, we used an instrumental variable procedure to overcome the problem of endogeneity and an instrument was constructed to cope with this issue. We find that R&D positively affects investment decisions. The analysis highlights the importance of financial factors, particularly with respect to firms’ internal resources, and also sensible cross-country effects, in determining the investment level.
    Keywords: r&d, investment, firm behavior, IV model
    JEL: C31 O32
    Date: 2015
  13. By: Andreas Karpf (Centre d'Economie de la Sorbonne - Paris School of Economics); Antoine Mandel (Paris School of Economics - Centre d'Economie de la Sorbonne); Stefano Battiston (University of Zurich - Department of Banking and Finance)
    Abstract: This paper analyses the European Emission Trading System (ETS) from a network perspective. It is shown that the network exhibits a strong core-periphery structure also reflected in the network formation process. Due to a lack of centralized market places, operators of installations which fall under the EU ETS regulations have to resort to local networks or financial intermediaries if they want to participate in the market. This undermines the central idea of the ETS to exploit marginal abatement costs
    Keywords: network; emission market; ETS; network topology
    JEL: L14 D85 Q56
    Date: 2015–11
  14. By: Mullen, Kathleen J.; Staubli, Stefan
    Abstract: A key component for estimating the optimal size and structure of disability insurance (DI) programs is the elasticity of DI claiming with respect to benefit generosity. Yet, in many countries, including the United States, all workers face identical benefit schedules, which are a function of one’s labor market history, making it difficult to separate the effect of the benefit level from the effect of unobserved preferences for work on individuals’ claiming decisions. To circumvent this problem, we exploit exogenous variation in DI benefits in Austria arising from several reforms to its DI and old age pension system in the 1990s and 2000s. We use comprehensive administrative social security records data on the universe of Austrian workers to compute benefit levels under six different regimes, allowing us to identify and precisely estimate the elasticity of DI claiming with respect to benefit generosity. We find that, over this time period, a one percent increase in potential DI benefits was associated with a 1.2 percent increase in DI claiming.
    Keywords: Benefit Generosity; Claiming Elasticity; Disability Insurance; Labor Force Withdrawal
    JEL: H55 J14 J22
    Date: 2015–12
  15. By: Cheng,T.C.;; Costa-i-Font, J.;; Powdthavee, N.;
    Abstract: We exploit lottery wins to investigate the eects of exogenous changes to individuals' income on health care demand in the United Kingdom. This strategy allows us to estimate lottery income elasticities for a range of health care services that are publicly and privately provided. The results indicate that lottery winners with larger wins are more likely to choose private health services than public health services from the National Health Service. The positive eect of wins on the choice of private care is driven largely by winners with medium to large winnings (win category > $500 (or US$750); mean = $1922:5 (US$2,893.5), median = $1058:2 (US$1592.7)). For privately-insured individuals, larger winners are more likely to obtain private care for dental services and for eye, blood pressure, and cervical examinations. For individuals without private insurance, lottery wins have no effect on the choice of public or private care. We find that medium to big winners are more likely to have private medical insurance. Large winners are also more likely to drop coverage earlier, possibly after their winnings have been exhausted. The elasticities with respect to lottery wins are comparable in magnitude to the elasticities of household income from fixed effect models.
    Keywords: lottery wins, health care; income elasticity; public-private
    JEL: H42 I11 D1
    Date: 2015–12
  16. By: Teresa Backhaus; Kathrin Gebers; Carsten Schröder
    Abstract: The affordability of housing has become a major topic of discussion in Germany among both social scientists and the public at large. Using data from the German Socio-Economic Panel (SOEP), we provide rent-income ratios over more than two decades and show how they change with households’ disposable needs-adjusted income. We find a substantial increase in the ratios over the 1990s. In the decade that followed, they remained relatively constant. Moreover we find that rent-income ratios decrease in income at a decreasing rate, suggesting that rising square-meter prices put particular financial pressure on low-income households. Our analysis also indicates economies of scale from shared living space for multi-member households.
    Keywords: home, amenities, and contributions of private households; income, taxes, and social security
    JEL: D1 D3 D6 I3 O18
    Date: 2015
  17. By: Sebastian Leitner
    Keywords: Europäische Union, Vermögensverteilung
    Date: 2015
  18. By: Antonakakis, Nikolaos; Chatziantoniou, Ioannis; Floros, Christos
    Abstract: In this study we examine the network topology of UK regional property prices using a dynamic measure of connectedness developed by Diebold and Yilmaz (2014) over the period 1973Q4-2014Q4. Our findings suggest that the transmission of inter-regional property returns shocks is an important source of regional property return fluctuations in the UK. The UK regions of South West, Outer South East, East Midlands and Northern Ireland seem to be the dominant transmitters of property returns shocks throughout our sample period. Moreover, the results indicate that regional housing markets in the UK are highly interconnected and extreme-economic-event dependent. In addition, the dynamic framework of our analysis provides further insights regarding the ripple effect, while, emphasis is also placed on the fact that London may also act as a net recipient of shocks from other regions. Findings are important for policy makers purporting to alleviate regional imbalances and achieve balanced growth, as well as, investors who formulate portfolio diversification strategies. Our results exhibit robustness to a series of tests.
    Keywords: UK Housing Market Connectedness Vector Autoregression Variance Decomposition Ripple Effect
    JEL: C32 G10 G20
    Date: 2015–12–17
  19. By: Sandrine Cazes; Alexander Hijzen; Anne Saint-Martin
    Abstract: This paper presents the OECD Framework for Measuring and Assessing Job Quality developed jointly by the Employment, Labour and Social Affairs Directorate and the Statistics Directorate of the OECD as part of a broader EU-supported project1 and describes its links to the broader well-being agenda pursued by the OECD. The approach to job quality taken is explicitly multi-dimensional and defined in terms of earnings quality, labour market security and quality of working environment. The paper then discusses measurement choices and indicators selected for each of the three dimensions of job quality, highlighting the main limitations on the data front. Finally, the paper documents job quality across OECD and non OECD countries as well as across socio-economic groups for which data are available.<BR>Ce document présente le nouveau cadre de mesure et d’évaluation de la qualité de l’emploi, développé conjointement par la Direction de l’Emploi, du Travail et des Affaires Sociales et la Direction des Statistiques de l’OCDE. Ce travail s’inscrit dans un projet plus large sur la qualité de l’emploi, financé par l’Union Européenne. La qualité de l’emploi y est décrite en relation avec l’agenda plus global de l’OCDE sur le bien-être. L’approche choisie pour définir la qualité de l’emploi est explicitement multidimensionnelle et retient la qualité des revenus du travail, la sécurité sur le marché du travail et la qualité de l’environnement professionnel comme les trois dimensions fondamentales. Le papier discute ensuite les choix méthodologiques et les indicateurs proposés dans le cadre de mesure, en en soulignant les possibles limites. Enfin, le papier présente un portrait statistique de la qualité de l’emploi, entre pays (OCDE et non OCDE) mais aussi par groupes sociodémographiques.
    JEL: I31 J28 J65 J81
    Date: 2015–12–18

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