nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2022‒03‒07
29 papers chosen by

  1. Digital finance, development and climate change By Sébastien GALANTI; Ҫiğdem Yilmaz ӦZSOY
  2. Can cryptocurrency tap the Indian market? Role of having robust monetary and fiscal policies By Palit, Biswajit; Mukherjee, Sakya
  3. E-money, Financial Inclusion and Mobile Money Tax in Sub-Saharan African Mobile Networks By Tarna Silue
  4. Financial Inclusion and Economic Growth : Evidence in the Digital Environment of Developing Countries By Tarna Silue
  5. Rethinking Digital Financial Inclusion: Evidence from Bangladesh By Aziz, Abdul; Naima, Umma
  6. The Emerging Autonomy–Stability Choice for Stablecoins By Maarten van Oordt
  7. Central bank digital currencies (CBDCs) in Latin America and the Caribbean By Viviana Alfonso C; Steven Kamin; Fabrizio Zampolli
  8. Decentralization Through Tokenization By Michael Sockin; Wei Xiong
  9. Cryptocurrency Valuation: An Explainable AI Approach By Yulin Liu; Luyao Zhang
  10. MicroVelocity: rethinking the Velocity of Money for digital currencies By Carlo Campajola; Marco D'Errico; Claudio J. Tessone
  11. Evidence for effective conservation fundraising: Comparing social media with traditional mailshot field experiments By KUBO, Takahiro; Yokoo, Hide-Fumi; Veríssimo, Diogo
  12. Determining the economic impact of cryptocurrency adoption on international trade from a gravity model framework By Chen, Eric R.
  13. Visa's Abandoned Plan to Acquire Plaid: What Could Have Been a Textbook Case of a Killer Acquisition By Frédéric Marty; Thierry Warin
  14. Do not rug on me: Zero-dimensional Scam Detection By Bruno Mazorra; Victor Adan; Vanesa Daza
  15. The rise of digital finance: Financial inclusion or debt trap By Pengpeng Yue; Aslihan Gizem Korkmaz; Zhichao Yin; Haigang Zhou
  16. Does the adoption of peer-to-government mobile payments improve tax revenue mobilization in developing countries? By Abdoul-Akim Wandaogo; Fayçal Sawadogo; Jesse Lastunen
  17. Digital Pitfalls: The Politics of Digitalization in Bangladesh By Aziz, Abdul
  18. Linear Laws of Markov Chains with an Application for Anomaly Detection in Bitcoin Prices By Marcell T. Kurbucz; P\'eter P\'osfay; Antal Jakov\'ac
  19. "The Phenomenon of Trade-Based Money Laundering in Bangladesh" - A Critical Review By Morshed, Monzur; Rahman, Taiabur
  20. Exploring Televend, an innovative combination of cryptomarket and messaging app technologies for trading prohibited drugs By Barratt, Monica Jane; Lamy, Francois; Engel, Liam; Davies, Emma; Puljević, Cheneal; Ferris, Jason; Winstock, Adam
  21. Toward a More Populous Online Platform: The Economic Impacts of Compensated Reviews By Peng Li; Arim Park; Soohyun Cho; Yao Zhao
  22. How did covid19 change our communities? Acompared analysis of meetup communitiesbefore and after the pandemic By Munoz, Pau
  23. Forest carbon offsets over a smart ledger By Kuralbayeva, Karlygash
  24. The Effect of Social Media on Elections: Evidence from the United States By Thomas Fujiwara; Karsten Müller; Carlo Schwarz
  25. Business Models for Peer-to-Peer Energy Trading in Germany Based on Households’ Beliefs and Preferences By Karami, Mahdi; Madlener, Reinhard
  26. Private or Public Equity? The Evolving Entrepreneurial Finance Landscape By Ewens, Michael; Farre-Mensa, Joan
  27. Spatial Variability of the ‘Airbnb Effect’: A Spatially Explicit Analysis of Airbnb's impact on Housing Prices in Sydney By Thackway, William; Ng, Matthew Kok Ming; Lee, Chyi Lin; Shi, Vivien; Pettit, Christopher
  28. Preparing for the Financial System of the Future: a speech at the 2022 U.S. Monetary Policy Forum, New York, New York, February 18, 2022 By Lael Brainard
  29. Origins and consequences of long ties in social networks By Jahani, Eaman; Fraiberger, Samuel P.; Bailey, Michael; Eckles, Dean

  1. By: Sébastien GALANTI; Ҫiğdem Yilmaz ӦZSOY
    Keywords: , , CO2, climate change, economic development, growth, Africa, energy, digital finance, mobile money, cryptocurrency
    Date: 2022
  2. By: Palit, Biswajit; Mukherjee, Sakya
    Abstract: The growing debate and discussions about legalizing digital currency- raises a significant question does the market have the withstanding power to include people from all segments of society for its usage. In such a nexus, India, when compared to its Asian counterparts is endowed with a booming crypto industry. However, due to many macro-economic and regulatory reasons which come parallel with the crypto trade, the Government of India is taking cognizance of regulating and rationing cryptocurrency trade. Cryptocurrency not only has prospects but at the very moment is enveloped with lots of apprehensions. Countries around the world are using blockchain technology to manoeuvre their development, coupled with swift payment modus operandi, low transaction fees absence of a mediator during transactions make the brighter side of this rapid digital currency. At the same time, unlike other currencies, cryptos are famously detached from any central banks or financial institutions and thereby received a completely decentralized status. On one side, this can free the investors from being beholden by the institution but on the flip side, there arise legal complications. Exposure to too much volatility and severe cases of fraudulent activities are prone to make investors apprehensive of this practice. We find, having a robust financial inclusion system, backed by proper monetary and fiscal policies is one of the necessary conditions to ensure that cryptocurrency taps the Indian market. By dissecting market phases into Accumulation, Pure Buy, Distribution and Pure Sell, we employ Robust Regression to test our proposition. Therefore, for crypto to finely blend in the Indian market and cause endogenous growth, the financial backbone of the economy needs to have a tremendous withstanding potential which comes when the country has vigorous financial inclusions and institutions.
    Keywords: Cryptocurrency, Regulatory Measures, Financial Inclusion.
    JEL: E2 E4 G1
    Date: 2022–02–05
  3. By: Tarna Silue (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: E-money and financial inclusion are both development challenges for developing countries, the former contributing to improving tax mobilization and the latter to achieving particular sustainable development objectives. However, one of the central financial inclusion and e-money services providers is mobile network operators using mobile money. The latter is subject to numerous taxes that can affect their operations. The paper studies the incidence of the new mobile money excise duty in the mobile networks sector on the adoption of electronic money and the advancement of financial inclusion through digital services in sub-Saharan countries. It appears that the introduction of the tax leads to an increase in user fees, which has a positive impact on demand for cash, and it is only in the presence of the latter that MM reduces the demand for cash for studied countries. In addition, the study assumes that tax administrations in these countries would raise more revenue without this excise because the tax is not conducive to the full adoption of e-money.
    Keywords: Financial inclusion,Mobile money,Tax incidence
    Date: 2021–07
  4. By: Tarna Silue (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)
    Abstract: The paper focuses on the relationship between economic growth and financial inclusion in developing countries. One of the main innovations of the analysis is to report on the contribution to developing new digital financial services such as mobile money. To do this, I first realize a simple endogenous growth model in which the role of the financial sector is to provide sources of investment to included population. The model indicates that consumption could be the main channel through financial inclusion, contributing to growth. Then, the empirical estimation realized using the Generalized Method of Moments (GMM) with 57 countries over 2007-2017 evaluates the impacts of traditional and digital inclusion on growth. The results confirm the positive effect of financial inclusion on growth. For formal inclusion, estimators reveal that the financial system deposits contribute to growth in developing countries. Concerning digital inclusion, we note that an active mobile money account has a higher positive impact on growth than standard inclusion.
    Keywords: Endogenous growth,Financial inclusion,Mobile money,GMM System
    Date: 2021–07
  5. By: Aziz, Abdul; Naima, Umma
    Abstract: A growing body of literature is advancing the impact of financial inclusion and digital finance on marginalized populations. However, mainstream scholarship has not focused on understanding the potential drivers and challenges of digital approaches to financial inclusion. This study aims to investigate the mismatch between assumptions implicit in the financial inclusion discourse and ideas of access and use of digital technologies and seeks to move the discourse forward through a comprehensive framework for digital financial inclusion. Our study showed that the social dynamics of financial engagement with new technologies require a move beyond a simple individualistic adopter/non-adopter binary framework and ‘supply oriented’ financial infrastructure. We conclude that although digital services have eased and bridged the gap of physical access to financial services, such services have not been utilised due to lack of basic connectivity, financial literacy and social awareness. This article theoretically contributes to digital financial services adoption literature by offering a significant critical overview and a new perspective on both digital finance and financial inclusion mechanisms.
    Date: 2021–02–24
  6. By: Maarten van Oordt (Vrije Universiteit Amsterdam)
    Abstract: Lawmakers have called for better stablecoin regulation, but authorities tend to have little control over the global operators of distributed ledgers that process stablecoin transactions. This chapter illustrates how peg deviations may occur when the issuer of a fiat-backed stablecoin loses its access to the traditional payment system of the jurisdiction that issues the relevant fiat currency. The need for reliable access to the traditional payment system in order to maintain a stable peg provides an important foothold for regulators to exercise control over fiat-backed stablecoins. Conditional upon regulators having little control over the operators of some distributed ledgers, an autonomy–stability choice may emerge where users of stablecoins ultimately face a choice between regulated stablecoins with a stable value but little autonomy and alternative stablecoin arrangements with more autonomy but a less stable value.
    Keywords: Stablecoins, Cryptocurrency, Exchange rate, Distributed ledgers, Regulation
    JEL: E42 G23 G28
    Date: 2022–02–15
  7. By: Viviana Alfonso C; Steven Kamin; Fabrizio Zampolli
    Abstract: The pros and cons of CBDCs have been examined in numerous writings. However, much less research has focused on the benefits, costs and implementation issues of CBDCs in specific economies or regions. This paper attempts to fill that gap for the Latin American and Caribbean (LAC) economies. It first examines the views of central banks in the region toward CBDCs, drawing on their responses to a survey conducted by the BIS in late 2020 and early 2021. Second, it examines whether the engagement of LAC central banks with CBDCs can be explained by the structural characteristics of their economies. Third, it reviews the long list of potential benefits, costs and risks of CBDCs, focusing on their relevance to the LAC economies. Finally, the paper reviews the design choices that central banks face and the actual choices made by a number of central banks in the region.
    Keywords: central bank digital currency, CBDC, payment systems, central banking, digital currency
    JEL: E42 E51 F31 G21 G28 O32 O38
    Date: 2022–01
  8. By: Michael Sockin; Wei Xiong
    Abstract: We examine decentralization of digital platforms through tokenization as an innovation to resolve the conflict between platforms and users. By delegating control to users, tokenization through utility tokens acts as a commitment device that prevents a platform from exploiting users. This commitment comes at the cost of not having an owner with an equity stake who, in conventional platforms, would subsidize participation to maximize the platform's network effect. This trade-off makes utility tokens a more appealing funding scheme than equity for platforms with weak fundamentals. The conflict reappears when non-users, such as token investors and validators, participate on the platform.
    JEL: G3
    Date: 2022–02
  9. By: Yulin Liu; Luyao Zhang
    Abstract: Currently, there are no convincing proxies for the fundamentals of cryptocurrency assets. We propose a new market-to-fundamental ratio, the price-to-utility (PU) ratio, utilizing unique blockchain accounting methods. We then proxy various fundamental-to-market ratios by Bitcoin historical data and find they have little predictive power for short-term bitcoin returns. However, PU ratio effectively predicts long-term bitcoin returns. We verify PU ratio valuation by unsupervised and supervised machine learning. The valuation method informs investment returns and predicts bull markets effectively. Finally, we present an automated trading strategy advised by the PU ratio that outperforms the conventional buy-and-hold and market-timing strategies. We distribute the trading algorithms as open-source software via Python Package Index for future research.
    Date: 2022–01
  10. By: Carlo Campajola; Marco D'Errico; Claudio J. Tessone
    Abstract: We propose a novel framework to analyse the velocity of money in terms of the contribution (MicroVelocity) of each individual agent, and to uncover the distributional determinants of aggregate velocity. Leveraging on complete publicly available transactions data stored in blockchains from four cryptocurrencies, we empirically find that MicroVelocity i) is very heterogeneously distributed and ii) strongly correlates with agents' wealth. We further document the emergence of high-velocity intermediaries, thereby challenging the idea that these systems are fully decentralised. Further, our framework and results provide policy insights for the development and analysis of digital currencies.
    Date: 2022–01
  11. By: KUBO, Takahiro; Yokoo, Hide-Fumi; Veríssimo, Diogo
    Abstract: Funding shortage limits conservation impact, making it vital to find effective fundraising methods. To explore how traditional and digital conservation fundraising methods perform, we conducted real-world field experiments by using mailshot and Facebook advertisements. We compare three types of message frames (Simple, Seed money, and Ecological) and found that the Seed money frame, which emphasizes the amount already donated, increased the number of donors, whereas the Ecological frame, which focuses on the fact that the fundraiser benefits threatened species, led to a relative reduction in this number. We also found that while on Facebook advertising costs were higher than donations, the opposite was true for the traditional mailshot experiment. Our findings illustrate some of the challenges associated with online fundraising, and importance of behavioral evidence to enhance effective fundraising in conservation.
    Date: 2021–10–19
  12. By: Chen, Eric R.
    Abstract: As cryptocurrencies develop and circulate at greater rates, countries have appeared to consider the technology as an adoptable medium of exchange. By expanding the influence of cryptocurrencies through adoption, countries raise its impact on the global economy. This paper is the first to apply an augmented version of the gravity model to examine the effects of global cryptocurrency adoption on international trade. This empirical study involves aggregating datasets on U.S. bilateral trade flows, gravity variable statistics, and the adoption of cryptocurrencies. In application of the gravity model, regression analyses are used on the aggregated data to test the magnitude of cryptocurrencies’ impact on trade. Based on the overall findings, the variables for cryptocurrency adoption produce negative coefficients suggesting a negative correlation between the adoption of cryptocurrencies and international trade. The central tendency in the empirical evidence offers the interpretation that countries with weak institutions to promote trade are more likely to adopt cryptocurrencies resulting in a negative association between cryptocurrency adoption and trade.
    Date: 2021–12–30
  13. By: Frédéric Marty; Thierry Warin
    Abstract: The applicability of the notion of killer acquisition to digital platforms has long been debated. The case of the proceedings brought by the U.S. Department of Justice against Visa in November 2020 (before their joint dismissal in January 2021) is even more interesting insofar as it makes it possible to illustrate and discuss its different facets ranging from the notion of competition suppression to that of consolidation and extension of the dominant position. Even if the acquisition project was eventually withdrawn, the complaint analysis also makes it possible to question inter-digital ecosystem competition and shed light on the issues related to monitoring acquisitions undertaken by dominant companies. L'application de la notion d'acquisition tueuse aux plateformes numériques fait depuis longtemps l'objet de débats. Le cas de la procédure engagée par le Département de la Justice américain contre Visa en novembre 2020 (avant leur rejet conjoint en janvier 2021) est d'autant plus intéressant qu'il permet d'illustrer et de discuter de ses différentes facettes allant de la notion de suppression de la concurrence à celle de consolidation et d'extension de la position dominante. Même si le projet d'acquisition a finalement été retiré, l'analyse de la plainte permet également de s'interroger sur la concurrence au sein de l'écosystème interdigital et de mettre en lumière les enjeux liés au contrôle des acquisitions réalisées par les entreprises dominantes.
    Keywords: mergers control,killer acquisitions,digital ecosystems,foreclosure,damage to innovation,fintech, contrôle des fusions,killer acquisitions,écosystèmes numériques,verrouillage,dommages causés à l'innovation,fintech
    JEL: L12 L25 L41
    Date: 2021–10–26
  14. By: Bruno Mazorra; Victor Adan; Vanesa Daza
    Abstract: Uniswap, like other DEXs, has gained much attention this year because it is a non-custodial and publicly verifiable exchange that allows users to trade digital assets without trusted third parties. However, its simplicity and lack of regulation also makes it easy to execute initial coin offering scams by listing non-valuable tokens. This method of performing scams is known as rug pull, a phenomenon that already existed in traditional finance but has become more relevant in DeFi. Various projects such as [34,37] have contributed to detecting rug pulls in EVM compatible chains. However, the first longitudinal and academic step to detecting and characterizing scam tokens on Uniswap was made in [44]. The authors collected all the transactions related to the Uniswap V2 exchange and proposed a machine learning algorithm to label tokens as scams. However, the algorithm is only valuable for detecting scams accurately after they have been executed. This paper increases their data set by 20K tokens and proposes a new methodology to label tokens as scams. After manually analyzing the data, we devised a theoretical classification of different malicious maneuvers in Uniswap protocol. We propose various machine-learning-based algorithms with new relevant features related to the token propagation and smart contract heuristics to detect potential rug pulls before they occur. In general, the models proposed achieved similar results. The best model obtained an accuracy of 0.9936, recall of 0.9540, and precision of 0.9838 in distinguishing non-malicious tokens from scams prior to the malicious maneuver.
    Date: 2022–01
  15. By: Pengpeng Yue; Aslihan Gizem Korkmaz; Zhichao Yin; Haigang Zhou
    Abstract: This study focuses on the impact of digital finance on households. While digital finance has brought financial inclusion, it has also increased the risk of households falling into a debt trap. We provide evidence that supports this notion and explain the channel through which digital finance increases the likelihood of financial distress. Our results show that the widespread use of digital finance increases credit market participation. The broadened access to credit markets increases household consumption by changing the marginal propensity to consume. However, the easier access to credit markets also increases the risk of households falling into a debt trap.
    Date: 2022–01
  16. By: Abdoul-Akim Wandaogo; Fayçal Sawadogo; Jesse Lastunen
    Abstract: Developing countries need to raise sufficient tax revenue to finance development. Revenue mobilization is often hampered by limited tax compliance, weak institutions, and technical problems with tax collection. One solution to these challenges is person-to-government (P2G) mobile phone payments, adopted in a number of developing countries since the early 2000s. This study assesses the causal effect of P2G adoption on tax revenue using propensity score matching.
    Keywords: Mobile money, Tax revenue, Propensity score matching, Developing countries
    Date: 2022
  17. By: Aziz, Abdul
    Abstract: The state-led investment in digital infrastructure under the ruling party’s political agenda of “Digital Bangladesh” has given rise to scholarly and policy debates, especially around issues of digital surveillance and media censorship. Such concerns have intensified during the COVID-19 pandemic. This article analyzes contemporary Bangladesh in the context of emerging trends related to the digitalization of society. In particular, I employ the concept of “digital pitfalls” to explore the state’s use of surveillance and the politics of fear to limit freedom of expression and silence critical voices in the digital age.
    Date: 2021–06–23
  18. By: Marcell T. Kurbucz; P\'eter P\'osfay; Antal Jakov\'ac
    Abstract: The goals of this paper are twofold: (1) to present a new method that is able to find linear laws governing the time evolution of Markov chains and (2) to apply this method for anomaly detection in Bitcoin prices. To accomplish these goals, first, the linear laws of Markov chains are derived by using the time embedding of their (categorical) autocorrelation function. Then, a binary series is generated from the first difference of Bitcoin exchange rate (against the United States Dollar). Finally, the minimum number of parameters describing the linear laws of this series is identified through stepped time windows. Based on the results, linear laws typically became more complex (containing an additional third parameter that indicates hidden Markov property) in two periods: before the crash of cryptocurrency markets inducted by the COVID-19 pandemic (12 March 2020), and before the record-breaking surge in the price of Bitcoin (Q4 2020 - Q1 2021). In addition, the locally high values of this third parameter are often related to short-term price peaks, which suggests price manipulation.
    Date: 2022–01
  19. By: Morshed, Monzur; Rahman, Taiabur
    Abstract: Bangladesh is one of the victims of financial crime like money laundering. Bangladesh's gross domestic product (GDP) has risen to 329.12 billion dollars in recent years and is steadily expanding. According to BASEL AML Index data (2020), Bangladesh's current AML score is 5.88. It stands in 38 rankings among 141 countries where Afghanistan ranks in the number one position, scoring 8.16, and Estonia ranks in 141 places with a score of 2.36. To fight financial crime like money laundering, The Central Bank of Bangladesh has taken necessary steps to be in line with FATF Status. In this connection, Trade-Based Money Laundering is a type of money laundering that shall closely monitor. Under-invoicing and over-invoicing are regularly practiced by the importers and exporters while declaring false prices of the goods. The remaining capital flies through "Hundi" and other media like Bitcoin or cryptocurrency platforms and uses offshore tax havens to hide the money. Though ML / TBML is a common problem over the entire world, in comparison to others, Bangladesh's progress is not significant, and not enough academic research is being published, which creates a considerable gap between the Government agencies and academia. This study attempts to break the ice between government agencies and academia. Still, more in-depth research shall be needed to combat Money Laundering (ML) or Trade-Based Money Laundering (TBML).
    Date: 2021–11–04
  20. By: Barratt, Monica Jane (RMIT University); Lamy, Francois; Engel, Liam; Davies, Emma; Puljević, Cheneal; Ferris, Jason; Winstock, Adam
    Abstract: Background. Digital technologies continue to facilitate drug trading. Televend was an innovative combination of multiple digital technologies, with its backend hosted on the darknet, while purchases were made through the messaging app Telegram. Here, we provide an initial characterisation of this nascent market. Methods. Televend and White House Market (WHM) were scraped (Jun–Jul 2021) and a global cross-sectional web survey of 15,513 drug buyers (Global Drug Survey; GDS) was conducted (Dec 2020–Mar 2021). Results. Televend was 10% of the size of WHM, the largest drug cryptomarket (4,515/44,830 listings per week). Both markets predominantly contained drug-related listings covering similar drug categories, with similar country of origin and destination. Very few GDS drug buyers reported use of Televend (0.73%). Most Televend buyers (68/114) reported buying cannabis, then cocaine (20), MDMA (17), and LSD (12). The Televend and darknet groups had similar demographic and drug use characteristics; whereas compared with app purchasers, older age increased the odds of Televend use (aRRR=1.06, p<.001), identifying as a cisgender woman decreased the odds (aRRR=0.43, p=.004), while last-year use of a greater number of drug types (aRRR=1.20, p<.001) and less frequent drug use (aRRR=0.998, p=.032) increased the odds of Televend purchase. Conclusions. While smaller, Televend was not noticeably different in its drug offerings to its largest cryptomarket competitor, and it attracted a cohort more similar to darknet than to app drug buyers. Future Televend-like markets may be attractive to people with less specialised technical knowledge who already routinely scroll through social media feeds.
    Date: 2021–10–13
  21. By: Peng Li; Arim Park; Soohyun Cho; Yao Zhao
    Abstract: Many companies nowadays offer compensation to online reviews (called compensated reviews), expecting to increase the volume of their non-compensated reviews and overall rating. Does this strategy work? On what subjects or topics does this strategy work the best? These questions have still not been answered in the literature but draw substantial interest from the industry. In this paper, we study the effect of compensated reviews on non-compensated reviews by utilizing online reviews on 1,240 auto shipping companies over a ten-year period from a transportation website. Because some online reviews have missing information on their compensation status, we first develop a classification algorithm to differentiate compensated reviews from non-compensated reviews by leveraging a machine learning-based identification process, drawing upon the unique features of the compensated reviews. From the classification results, we empirically investigate the effects of compensated reviews on non-compensated. Our results indicate that the number of compensated reviews does indeed increase the number of non-compensated reviews. In addition, the ratings of compensated reviews positively affect the ratings of non-compensated reviews. Moreover, if the compensated reviews feature the topic or subject of a car shipping function, the positive effect of compensated reviews on non-compensated ones is the strongest. Besides methodological contributions in text classification and empirical modeling, our study provides empirical evidence on how to prove the effectiveness of compensated online reviews in terms of improving the platform's overall online reviews and ratings. Also, it suggests a guideline for utilizing compensated reviews to their full strength, that is, with regard to featuring certain topics or subjects in these reviews to achieve the best outcome.
    Date: 2022–01
  22. By: Munoz, Pau
    Abstract: The year 2020 has been characterized by the outbreak of covid19. The spread of the disease has had a severe impact in many aspects of our lives that go beyond our health. From economical to psychological or social contexts, covid19 caused a halt in our daily activities and forced us to adapt or develop new habits. The following study uses data retrieved from 800 groups in the platform to study and compare the impact of the coronavirus in the social life of two vibrant but culturally different cities such as Washington DC and Barcelona. Results suggest that though groups have been able to maintain their activity, mostly through complementing offline with online events, communities have become more fragmented in 2020. The results also suggest that the halt in activity along with the fragmentation has been higher in Barcelona where a very strict lockdown policy was implemented and that Washington DC has been more able to effectively switch to online events after the outbreak of the pandemic.
    Date: 2021–11–06
  23. By: Kuralbayeva, Karlygash
    Abstract: 2021 has seen increasing climate policy action and net-zero commitments by individuals, companies and governments. A crucial aspect for the transition to net-zero is the voluntary offset market, with projects relating to REDD+ amongst the most popular. Policy-makers are grappling to make such markets efficient and scalable, however, many issues undermine these efforts pertaining to additionality, permanence, leakage and property and community rights. Digitisation has also accelerated, with technologies, notably blockchain, starting to enter the climate change space. Its use is becoming increasingly common within the voluntary market and, in particular, REDD+, although such projects, are generally in proposal or pilot stages. Given the emergence of other technologies such as AI and machine learning, the technologisation of REDD+ is only likely to increase. Thus modern technologies are being seen by developers as a potential solution to issues hindering REDD+. Potential benefits arising from technology use are unlikely to fully accrue without a wider focus on what has undermined REDD+ to date. As such, there is an urgency to establish an understanding of how projects can utilise these technologies to reduce long-standing issues. To do this, we discuss these issues together with technologies’ capacity to address drawbacks of REDD+ projects
    Date: 2021–10–21
  24. By: Thomas Fujiwara (Princeton University and NBER); Karsten Müller (National University of Singapore); Carlo Schwarz (Università Bocconi)
    Abstract: We study how social media affects election outcomes in the United States. We use variation in the number of Twitter users across counties induced by early adopters at the 2007 South by Southwest (SXSW) festival, a key event in Twitter’s rise to popularity. We show that this variation is unrelated to observable county characteristics and electoral outcomes before the launch of Twitter. Our results indicate that Twitter lowered the Republican vote share in the 2016 and 2020 presidential elections, but had limited effects on Congressional elections and previous presidential elections. Evidence from survey data, primary elections, and a text analysis of millions of tweets suggests that Twitter’s relatively liberal content may have persuaded voters with moderate views to vote against Donald Trump.
    Keywords: voting behavior, elections
    JEL: D72
    Date: 2021–11
  25. By: Karami, Mahdi (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: With the expansion of distributed energy resources and the phaseout of the feed-in-tariff scheme in Germany, self-consumption and electricity sharing within a community of prosumers are becoming more profitable. This paper derives optimal business models for a sustainable peer-to-peer (P2P) energy trading platform (ETP) in Germany. It examines data from 1618 residential households collected from an online survey, including 1311 consumers and 307 prosumers. Our research aims to better understand under what circumstances these households would participate in a P2P ETP and how business models can support such platforms to create added value for private households. Therefore, households’ beliefs concerning their attitudes, perceived behavioral control, and subjective norms are analyzed according to the Theory of Planned Behavior, and business models are designed correspondingly. In order to evaluate the developed business models’ effectiveness and usefulness, we apply them to fifteen existing pioneer energy communities and platforms in Germany. We find that cost-saving and other financial benefits for households must be considered to be the primary value proposition offered by a service provider. Business models which help households to become more electricity self-sufficient and to consume less electricity from the public grid are the second-most important source of value creation from a household’s point of view. By connecting the business models and the P2P prosuming market model, recommendations for companies, policy-makers, and regulatory authorities are made.
    Keywords: Electricity suppliers; business model innovation; value creation; private customers; electricity self-sufficient
    JEL: M10 M11 M13
    Date: 2021–03
  26. By: Ewens, Michael (California Institute of Technology); Farre-Mensa, Joan
    Abstract: The U.S. entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs raising their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage startups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors. These private market changes have coincided with a sharp decline in the number of firms going public—and when firms do go public, they are older and have raised more private capital. To understand these facts, we provide a systematic description of the differences between private and public firms. Next, we review several regulatory, technological, and competitive changes affecting both startups and investors that help explain how the trade-offs between going public and staying private have changed. We conclude by listing several open research questions.
    Date: 2021–11–07
  27. By: Thackway, William; Ng, Matthew Kok Ming (University of New South Wales); Lee, Chyi Lin; Shi, Vivien; Pettit, Christopher
    Abstract: Over the last decade, the emergence and significant growth of home sharing platforms such as Airbnb has coincided with rising housing unaffordability in many global cities. It is in this context that we look to empirically assess the impact of Airbnb on housing prices in Sydney - one of the least affordable cities in the world. Employing a hedonic property valuation model, our results indicate that Airbnb’s overall effect is positive. A 1% increase in Airbnb density is associated with approximately a 2% increase in property sales price. However, recognising that Airbnb’s effect is geographically uneven and given the fragmented nature of Sydney’s housing market, we also employ a GWR to account for the spatial variation in Airbnb activity. The findings confirm that Airbnb’s influence on housing prices is varied across the city. Sydney’s northern beaches and parts of western Sydney experience a statistically significant value uplift attributable to Airbnb activity. However, traditional tourist locations focused around Sydney’s CBD and the eastern suburbs experience insignificant or negative property price impacts. The results highlight the need for policymakers to consider local Airbnb and housing market contexts when deciding the appropriate level and design of Airbnb regulation.
    Date: 2021–12–13
  28. By: Lael Brainard
    Date: 2022–02–18
  29. By: Jahani, Eaman; Fraiberger, Samuel P.; Bailey, Michael; Eckles, Dean
    Abstract: Social networks play a predominant role in determining how information spreads between individuals. Previous works suggest that long ties, which connect people who do not share any mutual contact, provide access to valuable information on economic opportunities. However, no population-scale study has determined how long ties relate to economic outcomes and how such ties are formed. Using a novel dataset from Facebook, we reconstruct the network of interactions between users and we uncover a strong relationship between the share of long ties and economic outcomes at the local level in the United States and in Mexico. Administrative units with a higher proportion of long ties have higher incomes, higher economic mobility, lower unemployment rates and higher wealth, even after adjusting for potential confounders of these outcomes. In contrast to the weak tie theory, we find that having stronger long ties is associated with better economic outcomes. Furthermore, we discover that users with a higher proportion of long ties are more likely to have migrated between US states, to have transferred to a different high school, and to have attended college outside of their home state. Taken together, these results suggest that long ties contribute to economic prosperity and highlight the role played by disruptive life events in the formation of these ties.
    Date: 2022–01–08

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.