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on Law and Economics |
| By: | Brian Bell; Anna Bindler; Stephen Machin |
| Abstract: | Recessions lead to short-term job loss, lower levels of happiness and decreasing income levels. There is growing evidence that workers who first join the labour market during economic downturns suffer from poor job matches that have a sustained detrimental effect on their wages and career progression. This paper uses a range of US and UK data to document a more disturbing long-run effect of recessions: young people who leave school in the midst of recessions are significantly more likely to lead a life of crime than those graduating into a buoyant labour market. These effects are long lasting and substantial. |
| Keywords: | Crime; recessions; unemployment |
| JEL: | J64 K42 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60355&r=law |
| By: | Bueren, Eckart; Smuda, Florian |
| Abstract: | While private actions for damages against price-cartels by direct and indirect customers receive much attention, it is largely unresolved to what extent other groups that are negatively affected may claim compensation. This paper focuses on probably the most important one: suppliers to a downstream sellers' cartel. The paper shows graphically and analytically that cartel suppliers are negatively affected by the conspiracy depending on three effects: a direct quantity, a price and a cost effect. The article then examines whether suppliers are entitled to claim ensuing losses as damages in the US and the EU, with exemplary looks at England and Germany, thereby delineating the boundaries of the right to damages in different legal systems. We find that, while the majority view in the US denies standing, the emerging position in the EU, considering also recent case law and the forthcoming Damages Directive, allows for approving cartel supplier damage claims. We argue that this can indeed be justified in view of the different institutional context and the goals assigned to the right to damages in the EU. The Annex complements our result that supplier damage claims are practically viable by showing how supplier damages can be estimated econometrically with an adjusted residual demand model. |
| Keywords: | competition policy,comparative law,private enforcement,cartels,suppliers,quantification of damages,standing |
| JEL: | L41 K21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13063r2&r=law |
| By: | Niculae, Ioan Alecu; Ciocan, Felix Dimitrie; Mihut, Gabriela Gyongy |
| Abstract: | Similarly to how not knowing the laws and obligations resting upon a person will not exempt that person from liability, consumers not knowing their rights and not using them might place them into a position of inferiority when it comes to the relationships with the producers or distributors of agri-food products. Although, theoretically, such relationships mean that the parties are equal from a legal point of view, having correlative rights and obligations, in fact, given the nature of the products making up the object of the relationship between the producer and consumer, the consumer is place apriori in a position where he has to award maximum diligence, since we are talking about actions that might have consequences upon his health and even life. Returning to the previous state, fixing contingent damages and regaining the mutual respect and trust inherent to a healthy commercial demeanor, in case of conflict, determines the studying of alternative settlement procedures for conflicts, a stand out being the procedure of mediation, a procedure that is an alternative to the court of law. The institution of mediation can be understood through an exhaustive presentation of the framework law in the field, of the related laws, these being different from the European law in the field, the latter being included ope legis into the national framework law, through the ratification process or through undertaking the community acquis. |
| Keywords: | mediation, consumer, agri-food, producer, conflict |
| JEL: | K4 Q0 Q18 |
| Date: | 2014–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61713&r=law |
| By: | Arnaud Chevalier; Olivier Marie |
| Abstract: | We study the link between parental selection and children criminality in a new context. After the fall of the Berlin Wall, East Germany experienced an unprecedented temporary drop in fertility driven by economic uncertainty. We exploit this natural experim ent to estimate that the children from these (smaller) cohorts are 40 percent more likely to commit crimes. We show that women who gave birth at this period were negatively selected. Investigation of the underlying mechanisms reveals that emotional attachment and risk attitudes play important roles in the fertility-crime relationship. Finally, results for siblings support a causal interpretation of our findings. |
| JEL: | J13 K42 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60170&r=law |
| By: | Li, Wenli (Federal Reserve Bank of Philadelphia); Oswald, Florian (University College London) |
| Abstract: | The state of Nevada passed legislation in 2009 that abolished deficiency judgments for purchase mortgage loans made after October 1, 2009, and collateralized by primary single-family homes. In this paper, we study how the law change affected lenders’ decisions to grant mortgages and borrowers’ decisions to apply for them and subsequently default. Using unique mortgage loan-level application and performance data, we find strong evidence that lenders tightened their lending standards for mortgages affected by the new legislation. In particular, lenders reduced approval rates and loan sizes for mortgages after implementation of the law. Borrowers, by contrast, did not delay their mortgage applications until after the law change. Furthermore, the law change did not appear to have affected borrowers’ default decisions. These results cast a cautionary note on the effectiveness of policy recommendations that intend to use deficiency laws to curb mortgage defaults. |
| Keywords: | Deficiency judgment; Default; Foreclosure; Approval; Interest rate; Nevada |
| JEL: | G21 K11 R20 |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-2&r=law |
| By: | Alemanno , Alberto; Sassi , Franco |
| Abstract: | This chapter provides a detailed analysis of the economic, legal and public policy rationales for the application of taxes and other fiscal measures on health-related commodities. The motivation for such taxes has been more often linked to the fiscal revenues generated than to their potential public health benefits. However, especially in more recent times, an increased emphasis has been placed on the latter by many governments, as evidence emerged of the adverse public health, social and economic consequences of the consumption of certain commodities. An increasing number of governments are seeking to expand their use of fiscal measures to promote healthier behaviours, not only by increasing tax rates on commodities such as tobacco products and alcoholic beverages, but also by exploring the scope for taxing selected foods and non-alcoholic beverages as a way to make people’s diets healthier. A number of countries apply different tax rates to certain food categories, and some have specific taxes on foods high in salt, sugar or fat, and on sugary drinks. Only in the past two years, countries such as Denmark, Hungary, Finland and France introduced taxes on various foods and non-alcoholic beverages, and many more have been debating the possible use of similar measures. The key public health rationale for the use of taxes on health-related commodities lies in their ability to change people’s consumption behaviours. Additional health benefits may derive from the role possibly played by taxes as incentives to product reformulation. For instance, in 2012, many beer producers in the United Kingdom decreased the alcohol content of their brands sold in the United Kingdom by 0.2% to avoid an increase in duties. As with other attempts to use taxes to prevent some adverse outcome (e.g. environmental taxes), a key issue becomes the proximity of the tax point to the behaviour being targeted. The closer is the tax point to the behaviour, then (other things being equal) the more likely is the tax to have a beneficial impact. Excises introduced for public health purposes illustrate the dilemma clearly. Although for administrative reasons the tax may be levied earlier in the supply chain, the tax point is generally the purchase of the product by a consumer. Tobacco is always harmful, in whatever way and quantity it is consumed (although the harm will be even greater in an environment which results in secondary smoking). The relationship is less strong with alcohol, because the quantity consumed and the manner in which it is consumed (e.g. regular vs. binge drinking) determines the harm which may be caused. This relationship is even looser with diet-related taxes. This does not mean that taxation is an inappropriate instrument, but rather that, in addition to the harms discouraged by the tax, the welfare of a broader group of consumers will be affected. |
| Keywords: | Taxation; Public Health; Fat Tax; Risk Regulation; Lifestyle Risk; Non Communicable diseases; EU Law; WTO law; Paternalism; Nudge |
| JEL: | I18 K23 K32 K33 K34 K42 L51 L66 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1038&r=law |
| By: | Brown, James R. (Department of Finance, Iowa State University); Martinsson, Gustav (Institute for Financial Research (SIFR), Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology); Petersen, Bruce C. (Department of Economics, Washington University in St. Louis) |
| Abstract: | We study a broad sample of firms across 32 countries and find that strong shareholder protections and better access to stock market financing lead to substantially higher long-run rates of R&D investment, particularly in small firms, but are unimportant for fixed capital investment. Credit market development has a modest impact on fixed investment but no impact on R&D. These findings connect law and stock markets with innovative activities key to economic growth, and show that legal rules and financial developments affecting the availability of external equity financing are particularly important for risky, intangible investments not easily financed with debt. |
| Keywords: | Financial development; Investor protection; Stock markets; R&D; Innovation; Economic growth |
| JEL: | G32 K20 O16 O30 |
| Date: | 2015–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0393&r=law |
| By: | Niculae, Alecu Ioan; Ciocan, Felix Dimitrie; Badea, Adriana; Gyongy, Gabriela |
| Abstract: | Ever since becoming a member state of the European Union, Romania had to adapt its internal laws so that the citizens of other EU member states, or those of other entities for which this right is acknowledged by Law 17/2014, stateless persons residing in these states and legal persons established in accordance with the internal laws of these states can benefit from a regulatory framework in virtue of which they can acquire the right of private property over Romanian agricultural fields, under the same conditions as Romanian citizens, stateless persons based in Romania or Romanian legal persons. Outsourcing the civil circuit over the Romanian agricultural fields raises a serious question over the reaction of the society, which is still vibrant to anything that concerns the preservation of property over the ancestral land. |
| Keywords: | foreigners, mediation, conflict, land, alienation |
| JEL: | D74 K49 Q24 |
| Date: | 2014–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61754&r=law |
| By: | Carlisle E. Moody (Department of Economics, The College of William and Mary) |
| Abstract: | Personal violence, has declined substantially in Europe from 1200-2010. The conventional wisdom is that the state’s monopoly on violence is the cause of this happy result. I find some evidence that does not support this hypothesis. I suggest an alternative hypothesis that could explain at least some of the reduction in violence, namely that the invention and proliferation of compact, concealable, ready-to-use firearms caused potential assailants to recalculate the probability of a successful assault and seek alternatives to violence. I use structural change models to test this hypothesis and find breakpoints consistent with the invention of certain firearms. |
| JEL: | N43 K42 |
| Date: | 2015–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:158&r=law |
| By: | Bourveau , Thomas; Spira , Sven |
| Abstract: | Using securities lawsuits related to M&A as an industry shock, the authors examine whether litigation risk acts as an external governance mechanism by disciplining managers' investment decisions. In the two years following an M&A lawsuit (a lawsuit where plaintiffs allege that the firm hid poor performance related to a prior acquisition), they find that industry peers experience higher bidder announcement returns, choose more adequate methods of payment, and engage in fewer diversifying and smaller takeovers. Collectively, this evidence is consistent with post lawsuit deals being of higher quality. Furthermore, the authors find that peer firms respond to the increased litigation risk by reducing abnormally high investment expenditures. Finally, the reactions are stronger among firms with fewer anti-takeover provisions. Overall, their results show that M&A lawsuits can have an industry-wide deterrence effect on firms' suboptimal investment behavior. |
| Keywords: | Litigation Risk; Mergers; Investment Decisions; Corporate Governance |
| Date: | 2014–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1062&r=law |