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on Investment |
| By: | Obermeier, Tim |
| Abstract: | How accurately does household income reflect the well-being of the individuals living within the household? Looking at household income does not take unequal consumption sharing within families, the value of time use (leisure and housework) and preference heterogeneity into account. I build a model of family decision-making and the marriage market which jointly captures these aspects and estimate the model based on British time use data. I use the estimated model to study poverty and inequality based on the individual-level Money-Metric Welfare Index (MMWI). The main result is that only 59% of individuals who are poor in terms of the MMWI ('welfare-poor') are also income-poor, suggesting that the conventional focus on income misses a substantial fraction of the welfare-poor. I find that accounting for unobserved preference heterogeneity is an important factor in assessing individual welfare. From an aggregate perspective, inequality within families accounts for 18% of overall welfare inequality, and heterogeneity in economies of scale across households account for 23% of welfare inequality. Finally, to illustrate the policy relevance of individual welfare measures, I study how minimum wage increases affect welfare-poverty in this framework. |
| Keywords: | individual welfare; preference heterogeneity; inequality; marriage market; intra-household inequality; minimum wage |
| JEL: | E21 I32 D13 D63 |
| Date: | 2023–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121303&r=inv |
| By: | Jang, Won-Joon (Korea Institute for Industrial Economics and Trade); Park, Hea Ji (Korea Institute for Industrial Economics and Trade) |
| Abstract: | As of this writing, one and a half years have passed since Russia’s sudden invasion of Ukraine on February 24, 2022. Despite early prospects of a unilateral victory for Russia, which has the world’s second-most powerful military according to the Global Firepower Index (GFI), Ukraine (No. 22 by GFI) has stopped Russian progress thanks to full-fledged defense support from the United States, NATO and other global allies. As of December 2023, Russia and Ukraine continue to fight on the southeastern border of the country and around Crimea, and the war is expected to continue for the time being. The global defense market is in flux due to the prolonged Russia-Ukraine war. Major think tanks in advanced countries, such as the Center for Strategic and International Studies (CSIS), the Stockholm International Peace Research Institute (SIPRI), and Janes Information Services (Janes), are scrambling to analyze changes and describe the prospects of the global defense market as defense budgets in major countries began to surge following the outbreak of the Russia-Ukraine War. Indeed, the performance of the global defense market before and after the February 2022 has been diametrical. Exploring this phenomenon, this paper analyzes the recent trends and prospects of the global defense market after the outbreak of war in Ukraine, and identifies the implications carried by the analysis. It concludes by offering a suite of policy suggestions with the defense industry in mind. |
| Keywords: | defense; national security; defense industry; weapons development; weapons systems; arms exports; Russia-Ukraine war; defense R&D; defense spending; military budgets; defense technology; weapons technology; Korea; KIET |
| JEL: | F51 F52 H56 L64 |
| Date: | 2023–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2023_028&r=inv |
| By: | M. Utku Özmen (TOBB University of Economics and Technology); Belgi Turan (TOBB University of Economics and Technology) |
| Abstract: | This paper investigates the effect of an exogenous and sizable increase in minimum wage on child labor outcomes in Turkey. Using data from the 2012 and 2019 Child Labor Surveys, we employ a difference-in-differences method to compare the impact of minimum wage increases on children from minimum wage-earning families with children from other households. We find that minimum wage policies, which are set to alleviate poverty by increasing household income, can also reduce the prevalence of child labor. The results demonstrate the favorable impact of parental income on reducing the incidence of child labor, which constitutes an important part of the policy toolkit for combating child labor. |
| Date: | 2023–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1682&r=inv |
| By: | Michelle Sovinsky; Liana Jacobi; Alessandra Allocca; Tao Sun |
| Abstract: | As illicit substances move into the legal product space, substitution patterns with legal products become more salient. In particular, marijuana legalization may have implications for the use of other legal “sin” goods. We estimate a structural model of multi-product use of illegal and legal substances considering joint use, limited access to illicit products, and persistence in use. We focus on a young person’s choice to consume marijuana, alcohol or cigarettes (and possible combinations), and we find that sin goods are complements. Furthermore, our findings emphasize the necessity of accounting for joint consumption and access to obtain correct price sensitivity estimates. Post-legalization, youth marijuana use would increase from 25% to 37%. However, counterfactual results show that a combination of (reasonable) tax increases on all goods along with enforcement against illegal use can potentially revert use to pre-legalization levels. The earlier the tax increases are implemented the more effective they are at curbing future use. Our results inform the policy debate regarding the impact of marijuana legalization on the long-term use of sin goods. |
| Keywords: | complementarity, marijuana legalization, limited choice sets, data restrictions, discrete choice models |
| JEL: | C11 D12 L15 K42 H2 L66 C35 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_501&r=inv |
| By: | Dienes, Christian; Schneck, Stefan; Wolter, Hans-Jürgen |
| Abstract: | This research note examines the relationship between start-up rates and GDP per capita growth in urban and rural regions in Germany. Hereby, we take into account that urban and rural areas differ markedly in their resource endowment for entrepreneurship, which might be responsible for different effects of start-up activity on regional development. Therefore, we examine the growth implications rural entrepreneurship might have on the local economy. Our results suggest that new business formation is positively associated with economic growth in rural areas. In urban districts, however, the effect of start-up activity is insignificant. Therefore, regional development is less dependent on the emergence of new businesses in urban counties. The results also unveil that the often-cited inverse U-shaped relationship between entrepreneurship and GDP growth is mainly evident in rural areas. |
| Keywords: | Regional growth, entrepreneurship, start-up rate |
| JEL: | L26 O18 O47 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:281788&r=inv |
| By: | Quentin Hoarau (SONDRA - Sondra, CentraleSupélec, Université Paris-Saclay - ONERA - CentraleSupélec - Université Paris-Saclay); Etienne Lorang (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres) |
| Abstract: | This paper investigates the design of a recent regulatory proposal aimed at favoring the emergence of a battery recycling industry in Europe. Electric mobility is deemed necessary to cut CO2 emissions in the transport sector but the industrial and environmental impacts of lithium-ion battery manufacturing are controversial. A recent regulatory proposal from the European Commission introduces the obligation to attain a series of minimum thresholds of recycled materials for the new batteries to be manufactured after 2030. This paper discusses the conditions required for that obligation to be fulfilled. It develops a material flow model that projects battery wastes and their recycling potential. Our findings indicate that the feasibility of proposed thresholds is not very sensitive to changes of material intensities from battery technology shifts, recycling efficiencies, or the faster uptake of demand. On the contrary, battery lifetimes are the most crucial parameters for recycling potential. We believe that this result could jeopardize avenues for extending battery lifetimes such as second-battery usage. Our policy recommendations are twofold. First, we recommend lower thresholds to improve the regulation credibility. Second, the regulation should integrate other objectives that address the lifetime of batteries. |
| Keywords: | Recycling, Lithium-ion batteries, Electric vehicles, Environmental policy |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03727762&r=inv |
| By: | Juan, Benavides (FEDESARROLLO); Sergio, Cabrales (FEDESARROLLO) |
| Abstract: | Este documento amplía la argumentación efectuada por Benavides, Cabrales y Delgado (2022), artículo que argumentó la importancia del gas natural y cuantificó los costos de desmontar el gas natural y el carbón de la generación eléctrica en Colombia entre 2023 y 2035. En esta ocasión se presentan cifras de orden de magnitud sobre densidad energética y los altos costos de la electricidad producida con fuentes no convencionales y baterías, para reforzar la necesidad de una transición a una velocidad que no lesione la economía del país; y se amplía el universo de cálculo de costos directos asociados a las restricciones en oferta de gas, incluyendo los principales sectores de consumo como el residencial, la generación térmica a gas y la industria (por fuera de coquería y refinación). La cuantificación utiliza la mejor información disponible en fuentes públicas.***** Abstract This document expands the argument made by Benavides, Cabrales and Delgado (2022), an article that argued the importance of natural gas and quantified the costs of removing natural gas and coal from electricity generation in Colombia between 2023 and 2035. It introduces figures on energy density and the high costs of electricity produced with non-conventional sources of energy and batteries are presented, to reinforce the need for a transition at a speed that does not harm the country's economy. In addition, it presents the direct costs associated with gas supply restrictions, including the main consumer sectors such as residential, gas-fired thermal generation and industry (apart from coking and refining). Quantification uses the best information available from public sources. |
| Keywords: | Gas; Exploración; Transición Energética; Gas; Exploration; Energy Transition Energy Transition |
| JEL: | L72 L95 O13 Q41 |
| Date: | 2023–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:col:000124:021021&r=inv |
| By: | Agrar Walid (Ecole Nationale de Commerce et de Gestion Oujda - ENCG Oujda); Laroussi Ahlam (Université Mohammed Premier [Oujda]) |
| Abstract: | Football is a sport that arouses enormous enthusiasm, transaction figures are increasingly exorbitant, European football clubs have a particular economic model, whose owners expectations are atypical. In this article we carry out an analysis of the income and expenses of the first division clubs of England, Spain, France, Germany and Italy, as well as a stock market analysis for a sample of four clubs belonging to these championships which are Manchester United, Olympique Lyonnais, Borussia Dortmund and Juventus which are clubs listed on the stock exchange. Financial performance is not always the ultimate goal of football investors; they may be motivated by other emotional factors that justify their spending. Only the leading clubs in the five major European championships, regular in the Champions League, achieve significant income which is ensured mainly by audiovisual rights. These clubs recruit the best players in the world and offer very high salaries. |
| Abstract: | Le football est un sport qui suscite énormément d'engouement, les chiffres des transactions sont de plus en plus exorbitants, les clubs européens de football ont un modèle économique particulier, dont les attentes des propriétaires sont atypiques. Dans le présent article nous procédons à une analyse des revenus et des dépenses des clubs de première division de l'Angleterre, l'Espagne, la France, l'Allemagne et l'Italie, ainsi qu'une analyse boursière pour un échantillon de quatre clubs appartenant à ces championnats qui sont Manchester United, l'Olympique Lyonnais, Borussia Dortmund et la Juventus qui sont des clubs cotés en bourse. La performance financière n'est pas toujours le but ultime des investisseurs dans le football, ceux-ci peuvent être motivés par d'autres facteurs émotionnels qui justifient leurs dépenses. Seulement les clubs leaders dans les cinq grands championnats européens, réguliers en Ligue des champions réalisent des revenus importants qui sont assurés surtout par les droits audiovisuels. Ces clubs recrutent les meilleurs joueurs mondiaux et offrent des salaires très élevés. |
| Keywords: | Financial analysis, competitions, finance, football, financial performance, performance financière, Analyse financière, compétitions |
| Date: | 2023–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04381549&r=inv |
| By: | Mitra, Manipushpak (Economic Research Unit, Indian Statistical Institute); Ray, Indrajit (Cardiff Business School, Cardiff University); Roy, Souvik (Applied Statistics Unit, Indian Statistical Institute) |
| Abstract: | For a strategic market game (as introduced by Shapley and Shubik), following Dubey and Rogawski (1990), we provide a full explicit characterisation of the set of trading equilibria (in which all goods are traded at a positive price), for both the “buy and sell†and the “buy or sell†versions of this model under standard assumptions on the utility functions. We interpret and illustrate our equilibrium-characterising conditions; we also provide simple examples of trading equilibria, including those of non-interior strategy profiles (in which at least one trader is using the whole endowment in at least one good or money). |
| Keywords: | strategic market game ; trading equilibrium ; interior profile ; buy and sell ; buy or sell JEL codes: C72 ; D44 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wcreta:83&r=inv |
| By: | Ropponen, Olli; Koski, Heli; Kässi, Otto; Valmari, Nelli; Ylhäinen, Ilkka; Hirvonen, Johannes |
| Abstract: | Abstract This study examines the allocation of business subsidies introduced due to the COVID-19 pandemic to different types of companies. The results show that most of the supported companies would not have needed the subsidy, as they would have remained profitable also in the absence of it. Furthermore, companies incurring losses before the pandemic (zombie companies) received COVID-19 subsidies more often than other companies. The subsidies also directed more often to companies with productivity lower than the median productivity. The targeting of subsidies to low-productivity companies slows down future productivity development and economic growth, as labor and capital are more likely to remain in less productive businesses. The study also includes a literature review of the economic literature related to business subsidies during the COVID-19 pandemic. |
| Keywords: | Corporate subsidies, Covid-19 pandemic, Subsidy allocation, Covid-subsidy literature |
| JEL: | H22 H25 H32 |
| Date: | 2024–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:145&r=inv |
| By: | Drott, Constantin; Goldbach, Stefan; Nitsch, Volker |
| Abstract: | This paper examines the effect of financial sanctions at the most disaggregated level possible, individual bank accounts. Using data from the Eurosystem’s real-time gross settlement system TARGET2, we provide empirical evidence that sanctions imposed by the European Union on Russian banks following Russia’s aggression against Ukraine in 2014 and 2022 have sizably reduced financial transactions with sanctioned Russian bank accounts, both along the extensive and intensive margins. Among the various sanction measures taken, exclusion from SWIFT, a global provider of secure financial messaging services, turns out to have the largest effects. |
| Date: | 2024–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:142468&r=inv |
| By: | Dang, Hai-Anh H.; Pullinger, John; Serajuddin, Umar; Stacy, Brian |
| Abstract: | Country statistical capacity is increasingly recognized as crucial for development, but no academic study exists that reviews the available assessment tools. We offer the first review study that fills this gap, paying particular attention to data and practical measurement challenges. We compare the World Bank's recently developed Statistical Performance Indicators and Index (SPI) with other widely used indexes such as the Open Data Inventory index (ODIN), the Global Data Barometer index (GDB), and other regional and self-assessment tools. We find that the indexes bring their own advantages regarding their data sources, number of indicators, measurement focus, coverage of country and time periods, and correlation with common development indexes. Specifically, the ODIN covers most countries, the GDB collects data through its surveys, and the SPI offers clearer mathematical foundations and somewhat stronger correlation with Sustainable Development Goals indicators. We offer further thoughts on the potential mechanisms through which these tools can bring positive impacts on economic activities and some political economy concerns, as well as future directions of development. |
| Keywords: | statistical capacity, statistical performance, statistical indicators, statistical capacity index, national statistical system |
| JEL: | C8 H00 I00 O1 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1383&r=inv |
| By: | Klas Markstr\"om; S{\o}ren Riis; Bei Zhou |
| Abstract: | In this paper we extend the study of Arrow's generalisation of Black's single-peaked domain and connect this to domains where voting rules satisfy different versions of independence of irrelevant alternatives. First we report on a computational generation of all non-isomorphic Arrow's single-peaked domains on $n\leq 9$ alternatives. Next, we introduce a quantitative measure of richness for domains, as the largest number $r$ such that every alternative is given every rank between 1 and $r$ by the orders in the domain. We investigate the richness of Arrow's single-peaked domains and prove that Black's single-peaked domain has the highest possible richness, but it is not the only domain which attains the maximum. After this we connect Arrow's single-peaked domains to the discussion by Dasgupta, Maskin and others of domains on which plurality and the Borda count satisfy different versions of Independence of Irrelevant alternatives (IIA). For Nash's version of IIA and plurality, it turns out the domains are exactly the duals of Arrow's single-peaked domains. As a consequence there can be at most two alternatives which are ranked first in any such domain. For the Borda count both Arrow's and Nash's versions of IIA lead to a maximum domain size which is exponentially smaller than $2^{n-1}$, the size of Black's single-peaked domain. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.12547&r=inv |
| By: | Julie Y. Cai (Center for Economic and Policy Research.) |
| Abstract: | One emerging but underexplored factor that is likely to contribute to group racial earnings disparity is unstable work schedules. This is often detrimental for hourly workers when volatility is frequent, involuntary, or unanticipated. Using data from 2005-2022 monthly Current Population Survey and its panel design, this study follows a group of hourly workers across a four-month period to assess whether labor market volatility relates to their financial well-being, focusing on low-wage care and service occupations as well as female workers and workers of color. The findings are threefold: In general, during economic expansion periods, nonwhite workers often benefit more in terms of wage growth compared to their white counterparts. Second, net of other characteristics, on average, greater volatility is associated with lower earnings, and this is mostly driven by those holding jobs in low-wage service sectors and health care support roles. Last, the earnings consequences of volatility vary significantly by the type of low-wage jobs a worker holds and their gender and race, but this is only true when volatility happens in a job. Specifically, when working within the same employment spell, female workers, particularly those of color and those working in low-wage service and care jobs, earn significantly less when facing greater volatility than their male counterparts or those working in non-service, non-care occupations. |
| Keywords: | earnings inequality, unstable work schedules, racial discrimination, precarious work |
| JEL: | J01 J70 E24 |
| Date: | 2024–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp217&r=inv |
| By: | Osiris Jorge Parcero |
| Abstract: | This paper looks at a country's optimal central-government optimal policy in a setting where its two identical local jurisdictions compete to attract footloose multinationals to their sites, and where the considered multinationals strictly prefer this country to the rest of the world. For the sake of realism the model allows the local jurisdictions to choose between firm-specific and non-firm-specific policies. We show that the implementation of the jurisdictional firm-specific policy is weakly welfare dominant. Hence the frequent calls for the central government to ban the former type of policies go against the advice of this paper. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2401.04243&r=inv |
| By: | Nora Lustig (Tulane University); Valentina Martinez Pabon (Yale University); Carola Pessino (IDB) |
| Abstract: | This paper uses standard fiscal incidence analysis to study how much income redistribution and poverty reduction are accomplished through the fiscal system in eighteen Latin American and Caribbean (LAC) countries. We show there is considerable heterogeneity in the income inequality and poverty-reducing power of LAC fiscal systems. While all LAC fiscal systems reduce income inequality, fiscal systems in nine LAC countries are poverty-increasing, and this startling characteristic has not improved over time. When analyzing specific fiscal elements, we find that direct taxes, direct transfers, and in-kind transfers are all equalizing, and spending on education and health is often pro-poor. Moreover, contrary to expectations, indirect taxes and subsidies are more frequently equalizing than unequalizing. |
| Keywords: | Fiscal policy, inequality, poverty, Latin America |
| JEL: | D31 D6 E62 H22 I32 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:2402&r=inv |