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on Law and Economics |
| By: | Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Antoine Malézieux (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, University of Exeter Business School - University of Exeter Business School); Jason Shogren (Departement Economy and Finance, University of Wyoming - UW - University of Wyoming) |
| Abstract: | Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called "tax morale", has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-offs. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g., affective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g., ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we find statistically significant correlations of tax compliance behavior with empathy and shame, the economic significance of these correlations are low more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion. |
| Keywords: | tax evasion,tax morale,morality,personality traits,psychometrics |
| Date: | 2019–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02008071&r=all |
| By: | Carrieri,V.; Madio,L.; Principe, F.; |
| Abstract: | This paper provides the first analysis of “Do-it-Yourself Medicine†concerning marijuana consumption by studying the effects of the unintended liberalization of light cannabis that took place in Italy in 2016 on prescription drugs sales. Using a unique and high-frequency dataset on monthly sales of drugs and the location of light cannabis retailers and adopting a staggered DiD research design, we find that the local market accessibility of light cannabis led to a reduction in dispensed packets of opioids, anxiolytics, sedatives, anti-migraines, antiepileptics, anti-depressives and anti-psychotics. This calls for an effective regulation of the market and a proper evaluation of the use of light cannabis for medical purposes. |
| Keywords: | light cannabis; self-medication; marijuana; differences-in-differences; prescriptions; |
| JEL: | H51 H75 I18 K32 K42 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:19/07&r=all |
| By: | Aaron Chalfin; Benjamin Hansen; Jason Lerner; Lucie Parker |
| Abstract: | This paper offers experimental evidence that crime can be successfully reduced by changing the situational environment that potential victims and offenders face. We focus on a ubiquitous but surprisingly understudied feature of the urban landscape – street lighting – and report the first experimental evidence on the effect of street lighting on crime. Through a unique public partnership in New York City, temporary streetlights were randomly allocated to public housing developments from March through August 2016. We find evidence that communities that were assigned more lighting experienced sizable reductions in crime. After accounting for potential spatial spillovers, we find that the provision of street lights led, at a minimum, to a 36 percent reduction in nighttime outdoor index crimes. |
| JEL: | H40 H7 I1 K42 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25798&r=all |
| By: | Mario Gara (Bank of Italy); Francesco Manaresi (Bank of Italy); Domenico J. Marchetti (Bank of Italy); Marco Marinucci (Bank of Italy) |
| Abstract: | We provide the first thorough investigation of the effect of anti-money laundering inspections on banks' reporting of suspicious transactions. We do so by using highly detailed data from Bank of Italy and UIF (Italian authority for anti-money laundering), which include information on i) on-site inspections by authorities and follow-up actions, and ii) quantity and quality of suspicious transactions reports being filed by banks before and after inspections. Through a difference-in-differences econometric analysis we find that inspections (notably when followed by some type of intervention by the authority) induce, ceteris paribus, an increase in suspicious transaction reports being filed by banks. Crucially, the effect is not limited to low-quality reports, as feared in the literature ('crying wolf' effect) but is spread to high-quality reports. Authorities' oversight is thus shown to increase the quantity of information shared by banks without deteriorating its quality. |
| Keywords: | Money laundering, Financial regulation, Economic crime, Banking |
| JEL: | G28 K23 L51 M21 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_491_19&r=all |
| By: | Cohen, Alma; Hazan, Moshe; Tallarita, Roberto; Weiss, David |
| Abstract: | CEOs of public companies have influence over the political spending of their firms, which has been attracting significant attention since the Supreme Court decision in Citizens United. Furthermore, the policy views expressed by CEOs receive substantial consideration from policymakers and the public. The political preferences of CEOs, we argue, are therefore important for a full understanding of U.S. policymaking and politics. To contribute to this understanding, we provide empirical evidence on the partisan leanings of public-company CEOs. We use Federal Election Commission (FEC) records to put together a comprehensive database of the political contributions made by over 3,500 individuals who served as CEOs of S&P 1500 companies during the period 2000-2017. We find that these political contributions display substantial partisan preferences in support of Republican candidates. We identify how this pattern is related to the company's industry, geographical region, and CEO gender. To highlight the significance of CEO's partisan preferences, we show that public companies led by Republican CEOs tend to be less transparent to investors with respect to their political spending. We conclude by discussing the policy implications of our analysis. |
| Keywords: | CEOs; corporate political influence; Democrats; Political contributions; Political spending; Republicans |
| JEL: | G3 G34 G38 K2 K22 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13710&r=all |
| By: | Aminadav, Gur; Papaioannou, Elias |
| Abstract: | We provide an anatomy of corporate control around the world after tracing controlling shareholders for thousands listed firms from 127 countries between 2004 and 2012. The analysis reveals considerable and persistent differences across and within regions, as well as across legal families. Government and family control is pervasive in civil-law countries. Equity blocks in widely-held corporations are commonplace, but less so in common-law countries. These patterns apply to large, medium, and small listed firms. In contrast, the association between income and corporate control is highly heterogeneous; the correlation is strong among big and especially very large firms, but absent for medium and small listed firms. We then examine the association between corporate control and various institutional features. Shareholder rights against insiders' self-dealing activities correlate strongly with corporate control, though legal formalism and creditor rights less so. Corporate control is strongly related to labor market regulations, concerning, among others, the stringency of employment contracts, the power and extent of unions. The large sample correlations, thus, offer support to both legal origin and political-development theories of financial development. |
| Keywords: | Corporate Control; family firms; Government ownership; investor protection; Law and Finance; Ownership Concentration; regulation |
| JEL: | G30 K00 N20 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13706&r=all |
| By: | Ria Ivandic; Tom Kirchmaier; Stephen Machin |
| Abstract: | Empirical connections between local anti-Muslim hate crimes and international jihadi terror attacks are studied. Based upon rich administrative data from Greater Manchester Police, event studies of ten terror attacks reveal an immediate big spike up in Islamophobic hate crimes and incidents when an attack occurs. In subsequent days, hate crime is amplified by real-time media. It subsequently attenuates, but hate crime incidence cumulates to higher levels than prior to the series of attacks. The overall conclusion is that, even when they reside in places far away from where jihadi terror attacks take place, local Muslim populations face a media magnified likelihood of hate crime victimization following international terror attacks. This matters for community cohesion in places affected by discriminatory hate crime and, from both a policy and research perspective, means that the process of media magnification of hate crime needs to be better understood. |
| Keywords: | Islamophobic hate crime, jihadi terror attacks, media |
| JEL: | K42 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1615&r=all |
| By: | Sauro Mocetti (Bank of Italy); Lucia Rizzica (Bank of Italy); Giacomo Roma (Bank of Italy) |
| Abstract: | This work provides a descriptive assessment of regulated occupations in Italy and examines the impact of regulation on the labor market. First, we construct, on the basis of law provisions, a set of novel indicators measuring both the extensive and the intensive margin of regulation. We then show that regulated occupations represent a significant and increasing fraction of total employment (24%), their incidence being significantly larger among workers with a college degree (52%). Moreover, these occupations are characterized by lower mobility and entry rates and by a wage premium of about 9%, which raises to 18% for the professioni ordinistiche. Finally, we provide causal evidence that the reduction of entry requirements and the repeal of tariff restrictions lead to an increase in entry into regulated occupations and to a reduction of the wages of the incumbents. |
| Keywords: | regulation, occupation mobility, entry rate, wages |
| JEL: | J44 K20 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_495_19&r=all |
| By: | Knut Løyland; Oddbjørn Raaum; Gaute Torsvik; Arnstein Øvrum |
| Abstract: | Tax administrations use machine learning to predict risk scores as a basis for selecting individual taxpayers for audit. Audits detect noncompliance immediately, but may also alter future filing behavior. This analysis is the first to estimate compliance effects of audits among high-risk wage earners. We exploit a sharp audit assignment discontinuity in Norway based on individual tax payers risk score. Additional data from a random audit allow us to estimate how the audit effect vary across the risk score distribution. We show that the current risk score audit threshold is set far above the one that maximizes net public revenue. |
| Keywords: | tax audits, tax revenue, tax reporting decisions, income tax, machine learning, risk profiling |
| JEL: | D04 H26 H83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7616&r=all |
| By: | Antoine Bozio (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, IPP - Institut des politiques publiques - PSE - Paris School of Economics); Clémentine Garrouste (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris-Dauphine); Elsa Perdrix (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | This paper investigates the impact of delaying retirement on mortality among the French population. We take advantage of the 1993 pension reform in the private sector to identify the causal effect of an increase in claiming age on mortality. We use administrative data which provide detailed information on career characteristics, dates of birth and death. Our results, precisely estimated, show that an exogenous increase of the claiming age has no significant impact on the probability to die between age 65 and 72, conversely we find that an increase of the retirement age of one year leads to an increase of 0.004 in the death rate between age 72 and 77. This effect is qualitatively small, and we discuss more generally the ability to estimate small effects in rare event data using minimal detectable effect procedure. |
| Keywords: | pension reform,health,mortality |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02019046&r=all |
| By: | Serrano Caballero, Enriqueta; Ojo, Marianne |
| Abstract: | The EU's development policy seeks to eradicate poverty, promote the sustainable development of developing countries, defend human rights and democracy and promote gender equality and overcome environmental and climate challenges. Development aid is a limited resource. For this reason, the Union is committed to the effectiveness of aid and promotes close relations with partner countries in terms of programming and implementing development actions. With this perspective, the "EU Code of Conduct on the division of labor in the field of development policy" was adopted in 2007, and the "Operational framework on the effectiveness of development aid" was adopted in 2011. These measures are consistent with the international measures undertaken in response to the 2005 Paris Declaration of the OECD, which promotes ownership, harmonization, alignment, results and mutual responsibility in development assistance. Amidst highly anticipated outcomes from ongoing trade talks between US and China, Brexit negotiations outcomes, as well recently concluded NAFTA negotiations, the atmosphere surrounding global trade relations could not be more highly charged. This volume not only illustrates how the changing face, landscape and scene of political economy and international trade relations are significantly impacting financial stability, regulatory, legal and financial related actors; but also highlights and explains how certain actors are contributing in addressing those instabilities which are threatening current global spheres as a result of recent developments. |
| Keywords: | international organizations; regional policies of cooperation and integration; trade relations; Sustainable Development; Financial Markets; Integration and Stability; Brexit; NAFTA; European Union; non governmental organisations; actors; international relations |
| JEL: | F1 F13 F18 F2 F23 F3 K2 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92105&r=all |