nep-law New Economics Papers
on Law and Economics
Issue of 2017‒03‒19
eleven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Gun violence in the U.S.: Correlates and causes By Kukharskyy, Bohdan; Seiffert, Sebastian
  2. Follow-the-leader? Measuring the internalisation of law By Shaun Larcom; Luca A. Panzone; Timothy Swanson
  3. Taxing high-income earners: tax avoidance and mobility By Alejandro Esteller; Amedeo Piolatto; Matthew D. Rablen
  4. Pollution or Crime: The Effect of Driving Restrictions on Criminal Activity By Paul E. Carrillo; Andrea Lopez; Arun Malik
  5. Economic Development and the Regulation of Morally Contentious Activities By Julio J. Elias; Nicola Lacetera; Mario Macis; Paola Salardi
  6. Partial cross ownership and explicit collusion By Paha, Johannes; de Haas, Samuel
  7. Trigger Warning: The Causal Impact of Gun Ownership on Suicide By Alexander F. McQuoid; Charles Moore; Stephen Sawyer; David C. Vitt
  8. Legal empowerment and horizontal inequalities after conflict By Lars Waldorf
  9. Curbing Corporate Debt Bias By Ruud A. de Mooij; Shafik Hebous
  10. Does Single Motherhood Hurt Infant Health among Young Mothers? By Kim, Albert Young-Il; Lee, Jungmin
  11. Fighting Collusion by Permitting Price Discrimination By Helfrich, Magdalena; Herweg, Fabian

  1. By: Kukharskyy, Bohdan; Seiffert, Sebastian
    Abstract: This paper provides a county-level investigation of the root causes of gun violence in the U.S. To guide our empirical analysis, we develop a simple theoretical model which suggests that firearm-related offenses in a given county increase with the number of illegal guns and decrease with social capital and police intensity. Using detailed panel data from the Federal Bureau of Investigation for the period 1986-2014, we find empirical evidence for the causal effects of illegal guns, social capital, and police intensity consistent with our theoretical predictions. Based on our analysis, we derive a range of policy recommendations.
    Keywords: gun violence,illegal guns,social capital,police intensity
    JEL: K14 K42 J22 I18
    Date: 2017
  2. By: Shaun Larcom; Luca A. Panzone; Timothy Swanson
    Abstract: Expressive law is said to induce compliance with stated principles without a price on non-compliance. We empirically assess this proposition, by attempting to disentangle the impacts of a legal change (a 5p charge on use of plastic bags), on individual choices. We do so by measuring both behaviours and attitudes across the first two months of the legal change, and by comparing the impacts across neighboring jurisdictions both with and without the change. Using mediation analysis, we find that the self-reported change in internal motivation explains only about 10% of the change in behaviour. Interestingly, we find that the scale of the sanction (charge) is both irrelevant (because jurisdictions without sanctions still exhibit changed behaviour) and important (because the size of the sanction signals the reasonableness of the law).
    Keywords: Expressive law, internalisation of law; behavioural; signalling
    JEL: Q5 D1 K1 C4
    Date: 2017–03–13
  3. By: Alejandro Esteller (Universitat de Barcelona & IEB); Amedeo Piolatto (Universitat de Barcelona & IEB); Matthew D. Rablen (University of Sheeld)
    Abstract: The taxation of high-income earners is of importance to every country and is the subject of a considerable amount of recent academic research. Such high-income earners contribute substantial amounts of tax and generate significant positive spillovers, but are also highly mobile: a 1% increase in the top marginal income tax rate increases out-migrations by around 1.5 to 3%. We review research into taxation of high-income earners to provide a synthesis of existing theoretical and empirical understanding. We offer various avenues for potential future theoretical and empirical research.
    Keywords: High-income earners, mobility, tax avoidance
    JEL: H26 H31 K34 K42
    Date: 2017
  4. By: Paul E. Carrillo (George Washington University); Andrea Lopez (George Washington University); Arun Malik (George Washington University)
    Keywords: Crime, Difference-in-Differences, Regression Discontinuity, Crime displace- ment
    JEL: C20 Q52 R28 R48
    Date: 2016
  5. By: Julio J. Elias; Nicola Lacetera; Mario Macis; Paola Salardi
    Abstract: The regulation of many activities depends on whether societies consider them morally controversial or “repugnant”. Not only have regulation and related ethical concerns changed over time, but there is also heterogeneity across countries at a given time. We provide evidence of this heterogeneity for three morally contentious activities: abortion, prostitution and gestational surrogacy, and explore the relationship between a country’s economic conditions and how these activities are regulated. We propose a conceptual framework to identify mechanisms that can explain our findings (including the role of non-economic factors), and indicate directions for future research.
    JEL: D02 I18 K42 O17 O43 O57 Z12 Z18
    Date: 2017–03
  6. By: Paha, Johannes; de Haas, Samuel
    Abstract: This article studies the unilateral and coordinated effects of non-controlling minority shareholdings (NCMS). It provides a comprehensive model by integrating the established models of Reynolds and Snapp (1986), Flath (1991), Malueg (1992), and Gilo et al. (2006). It is the first to add a competition authority. The model finds that NCMS lower the sustainability of collusion under a greater variety of situations than was indicated by earlier literature. The collusion destabilizing effect of NCMS is particularly prevalent in the presence of an effective antitrust authority.
    JEL: G34 K21 L41
    Date: 2016
  7. By: Alexander F. McQuoid (United States Naval Academy); Charles Moore (United States Naval Academy); Stephen Sawyer (United States Naval Academy); David C. Vitt (Farmingdale State College SUNY)
    Abstract: With a growing debate over tighter rearm regulations, we consider an often overlooked consequence of increased rearm access: an increase in rearm suicides. Using data from the federal criminal background check system, we consider the impact of rearm ownership of rearm suicide rates. To deal with concerns of identi cation, we instrument for rearm background checks with state-year level Google search intensity for phrases that re ect fear of future gun shortages and learning about the constitutional rights of rearm owners. We nd that an increase in rearm ownership has a sizable and statistically signi cant impact on rearm suicide rates. A 10% increase in rearm ownership increases rearm suicide rates by 2.8%. Furthermore, we nd no e ect of gun ownership on non- rearm suicide rates, suggesting our ndings are not simply capturing a suicide method substitution e ect. The results are robust to a variety of validity tests. Our results make clear the link between rearm ownership and rearm suicide rates, which have increased dramatically over the last decade.
    Date: 2017–03
  8. By: Lars Waldorf
    Abstract: This article explores whether legal empowerment can address horizontal inequalities in post-conflict settings, and if so, how. It argues that legal empowerment has modest potential to reduce these inequalities but that there are risks of strengthening group identities, reducing social cohesion, and, in the worst case, triggering conflict. It uses a case study to examine how two legal empowerment programmes in Liberia navigated this tension between equity and peace.
    Date: 2017
  9. By: Ruud A. de Mooij; Shafik Hebous
    Abstract: Tax provisions favoring corporate debt over equity finance (“debt bias†) are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate financial stability risk. We find that rules targeted at related party borrowing (the majority of today’s rules) have no significant impact on debt bias—which relates to third-party borrowing. Also, these rules have no effect on broader indicators of firm financial distress. Rules applying to all debt, in contrast, turn out to be effective: the presence of such a rule reduces the debt-asset ratio in an average company by 5 percentage points; and they reduce the probability for a firm to be in financial distress by 5 percent. Debt ratios are found to be more responsive to thin capitalization rules in industries characterized by a high share of tangible assets.
    Keywords: Corporate debt;Debt service ratios;Financial risk;Corporate taxes;Thin capitalization;Risk management;Econometric models;Corporate tax, capital structure, debt bias, thin capitalization rule
    Date: 2017–01–30
  10. By: Kim, Albert Young-Il (Sogang University); Lee, Jungmin (Seoul National University)
    Abstract: Does single motherhood adversely affect infant health? This question is not easy to answer because of the endogeneity of coresidence during pregnancy. In this paper, we exploit quasi-natural variation in single motherhood from the moment of conception to that of birth arising from marriageable age restrictions and the reform of the laws in Korea. The Korean birth certificate dataset is unique in that it allows us to distinguish coresidence and legal marital status and further to identify the duration of pregnancy period without a partner. Results show that although coresidence with the partner during pregnancy is seemingly beneficial for infant health, it is mostly driven by selection into coresidence. Further, we do not find any significant advantage of legal marriage among young mothers.
    Keywords: single motherhood, coresidence, marriage, marriageable age, birth weight, LBW, preterm birth, quasi-natural experiment
    JEL: I12 J12 K36
    Date: 2017–02
  11. By: Helfrich, Magdalena; Herweg, Fabian
    Abstract: We investigate the effect of a ban on third-degree price discrimination on the sustainability of collusion. We build a model with two firms that may be able to discriminate between two consumer groups. Two cases are analyzed: (i) Best-response symmetries so that profits in the static Nash equilibrium are higher if price discrimination is allowed. (ii) Best-response asymmetries so that profits in the static Nash equilibrium are lower if price discrimination is allowed. In both cases, firms' discount factor has to be higher in order to sustain collusion in grim-trigger strategies under price discrimination than under uniform pricing.
    JEL: D43 K21 L13
    Date: 2016

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