nep-law New Economics Papers
on Law and Economics
Issue of 2018‒03‒05
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Reverting to Informality Unregistered Property Transactions and the Erosion of the Titling Reform in Peru By Italo A. Gutierrez; Oswaldo Molina
  2. The Multilateral Legal Instrument: A developing country perspective. By Tandon, Suranjali
  3. Do Proxies for Informed Trading Measure Informed Trading? Evidence from Illegal Insider Trades By Kenneth R. Ahern
  4. Labour contracts and stepping-stone effect in Italy: A multinomial analysis By Bosco, Maria Giovanna; Valeriani, Elisa
  5. The Functional Method as the Staple of Comparative Studies of European Legal History in the Early 21st Century? By Dmitry Poldnikov
  6. Effects of Parental Leave Policies on Female Career and Fertility Choices By Shintaro Yamaguchi
  7. The Evolution of U.S. Spectrum Values Over Time By Michelle Connolly; Nelson Sa; Azeem Zaman; Chris Roark; Akshaya Trivedi
  8. Incentive regulation: Evidence from German electricity networks By Hellwig, Michael; Schober, Dominik; Cabral, Luís M. B.
  9. Pockets of risk in the Belgian mortgage market : Evidence from the Household Finance and Consumption Survey (HFCS) By Philip Du Caju

  1. By: Italo A. Gutierrez; Oswaldo Molina
    Abstract: Titling programs have focused mostly on providing initial tenure security and have not properly addressed maintaining the formality of future property transactions. Our data indicates that properties become de-regularized due to unregistered transactions in urban slums, which threatens to undo the success of the titling program in the long run. We exploit a natural experiment provided by the elimination of a streamlined registration system targeted for the poor residents in Peru to identify how costly and burdensome registration policies can increase de-regularization. Our analysis indicated that the elimination of such a system led to a significant reduction in the probability of registering transactions, including those that involved a change in ownership. Overall, our findings stress the necessity of building specific components aimed at maintaining properties formal into the design of urban titling programs.
    Keywords: titling programs, registration, property transactions, property rights, natural experiment, Peru
    JEL: P14 O18 R20 R28 K0
    Date: 2016–09
  2. By: Tandon, Suranjali (National Institute of Public Finance and Policy)
    Abstract: Action point 15 of the BEPS program mandated developing a Multilateral Legal Instrument (MLI) to modify bilateral tax treaties. A country or signing this instrument will be able to modify all treaties, where other contracting parties have also notified the same. This would allow countries to simultaneously and therefore swiftly adopt measures to tackle BEPS in a large number of treaties. Based on the country positions submitted to the OECD as on 30th August 2017, this paper makes an attempt to assess whether this instrument has succeeded in bringing about the desired changes. A unique database is constructed on the basis of these country positions. Using this database, the paper shows that the benefit of the MLI may be limited in so far as the application of the optional articles is concerned. In so far as developing countries are concerned, it is found that the gains to these countries may be limited. The adoption of the minimum standards may be the limited success achieved by the instrument.
    Keywords: BEPS ; tax treaties ; Multilateral Legal Instrument ; Foreign investment
    JEL: H25 H26 K34
    Date: 2018–02
  3. By: Kenneth R. Ahern
    Abstract: This paper exploits hand-collected data on illegal insider trades to test whether standard illiquidity measures can detect informed trading. Controlling for unobserved cross-sectional and time-series variation, sampling bias, and strategic timing of insider trades, I find that only absolute order imbalance and the negative autocorrelation of order flows are statistically and economically robust predictors of insider trading. However, this result only holds for short-lived information. When information is long-lived, none of the measures of illiquidity I consider detect informed trading, including bid-ask spreads, Kyle's lambda, and Amihud illiquidity. These results suggest that standard measures of illiquidity have limited applications.
    JEL: D53 D83 D85 G12 G14 K42
    Date: 2018–02
  4. By: Bosco, Maria Giovanna; Valeriani, Elisa
    Abstract: Do short-term contracts facilitate the transition to permanent contracts? The authors use a rich administrative database for Italy to run a stepping stone analysis and evaluate which contractual agreements have more chances to lead to a permanent working position. They find that individual specific characteristics make it more likely for a worker to be employed with a specific contractual agreement and that the contribution toward more working stability varies with the previous contract. The authors conclude that fixed term positions act more as stumbling blocks than building blocks for open-ended contracts.
    Keywords: dependent labour,labour market institutions,careers analysis
    JEL: J20 J21 J41
    Date: 2018
  5. By: Dmitry Poldnikov (National Research University Higher School of Economics)
    Abstract: The Europeanization of legal scholarship and legal education facilitates the emergence of comparative legal science as a promising new tool to discover similarities and differences between two or more jurisdictions and their past development. Yet, the specific methodology of such studies is still not clear. Some legal historians hold that comparative legal history does not or should not have its own methodology other than that of comparative law. Others warn against imposing a contemporary agenda and toolbox on legal history. The author of this article aims to clarify this debate by examining the prospect of applying one of the most popular methods of comparative law – the functional method – to the domain of legal history. On the basis of several examples from the European legal past he claims that examining the functions (the social purpose) of legal norms can help legal historians in three ways: first, to determine the objects of comparison and the sources of analysis, despite the variety of verbal shortcuts (the initial stage of research); second, to analyse legal norms from the perspective of solving social problems in the past – to study the 'law in action'; and third, to arrange the results of the research according to meaningful criteria at the final stage
    Keywords: comparative legal history, methodology, functional method, European legal tradition, tertium comparationis, praesumptio similitudinis
    JEL: K10
    Date: 2018
  6. By: Shintaro Yamaguchi
    Abstract: This paper constructs and estimates a dynamic discrete choice structural model of labor supply, occupational choice, and fertility in the presence of parental leave legislation. The estimated structural model is used for an ex ante evaluation of parental leave expansions that change the duration of job protection and/or the replacement rate of the cash benefit. Counterfactual simulation results indicate that a one-year job protection significantly increased maternal employment and earnings, but extending it from one to three years and offering cash benefits have little effect. Overall, parental leave policies have little effect on fertility. I also find that policy effects are stronger for younger cohorts who observe a policy change several years before childbearing, because they adjust their career paths accordingly as soon as the policy change.
  7. By: Michelle Connolly (Duke University); Nelson Sa (Brandeis University); Azeem Zaman (Harvard University); Chris Roark (University of Chicago); Akshaya Trivedi (Trinity College,Duke University)
    Abstract: We consider 1997 to 2015 data from FCC spectrum auctions related to cellular services to attempt to identify intrinsic spectrum values. Relative to previous literature, we control for license specific auction rules, and introduce measures to separate out technological progress that effectively reduces spectrum scarcity from progress that increases demand. Results confirm that technological changes have led to increases in the relative value of higher frequencies. Surprisingly, 47 percent of these licenses have been won by “small” bidders, representing 27 percent of the real value of these licenses. The use of bidding credits further appears to consistently reduce auction competition.
    Keywords: HSpectrum, spectrum Scarcity, Auctions, FCC, Auction Rules, Mobile Applications, Spectral Efficiency, Broadband Speeds, Closed Auctions, Small Bidders, "The Google Effect"
    JEL: L5 O3 K2
    Date: 2018–02
  8. By: Hellwig, Michael; Schober, Dominik; Cabral, Luís M. B.
    Abstract: We propose a difference-in-differences (DiD) approach to estimate the impact of incentives on cost reduction. We show theoretically, and estimate empirically, that German electricity distribution system operators (DSOs) incur higher costs when subject to a lower-powered regulation mechanism. The difference is particularly significant (about 7%) for firms in the upper quartile of the efficiency distribution, a pattern which is consistent with the pooling of types under the threat of ratcheting.
    Keywords: regulation,ratchet effect,electricity utilities,difference-in-differences,efficiency analysis
    JEL: K23 L51 L94 L98 D24 D82
    Date: 2018
  9. By: Philip Du Caju (Economics and Research Department, NBB)
    Abstract: This paper complements macroeconomic indicators for macroprudential policy with information from microeconomic survey data from the Household Finance and Consumption Survey (HFCS), to identify pockets of risk in the Belgian mortgage market. It takes into account distributional aspects of debt and assets, with a special focus on the coverage of households’ mortgage debt by (liquid)financial assets. It identifies the share of outstanding mortgage debt that is possibly at risk, and the parts of the population most affected, on the basis of income and assets-related debt indicators. The first finding is that some groups of households have problems servicing their debt out of their income and some lack the financial resources to cope with income loss. The second finding is that Belgian households’ considerable financial wealth is (very) unequally distributed, and that therefore this wealth covers their outstanding mortgage debt only to a limited extent. As a consequence, a severe unemployment shock could hurt many mortgage-indebted households, involving a significant part of total outstanding mortgage debt in Belgium. All in all, this paper shows that survey data can complement macro data for macroprudential policy purposes.
    Keywords: Household finance, Financial Fragility, Mortgage markets, Survey, HFCS
    JEL: D14 D91 G21 G28 K35
    Date: 2017–12

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