Browsing Working Papers (ECON) by Title
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Larsen, Birthe; Waisman, Gisela (København, 2007)[More information][Less information]
Abstract: We exploit the regional variation in negative attitudes towards immigrants to Sweden in order to analyse what are the consequences of such attitudes have on immigrants welfare. A well educated immigrant from a non developed country who lives in a municipality with strong negative attitudes earns less than what she would earn if she lived in a municipality where natives are more positive. If attitudes changed from the average level to the most positive level, her wage would increase by 12%. This would reduce the wage gap to well-educated immigrants from developed countries by 70%. We interpret this eect as evidence of labour market discrimination. The same reduction in negative attitudes would increase the welfare of immigrants from Africa and Asia, through their wage and local amenities, by an equivalent to one third of their wage. The analogous amount for immigrants from South America and Eastern Europe is one fourth of their wage if they are well educated and one tenth otherwise. URI: http://hdl.handle.net/10398/7587 Files in this item: 1
wp11-2007.pdf (1.182Mb) -
Pérez-González, Francisco; Wolfenzon, Daniel; Bennedsen, Morten (København, 2007)[More information][Less information]
Abstract: Abstract. Estimating the value of top managerial talent is a central topic of research that has attracted widespread attention from academics and practitioners. Yet, testing for the importance of chief executive officers (CEOs) on firm outcomes is challenging. In this paper we test for the impact of CEOs on performance by assessing the effect of (1) CEO deaths and (2) the death of CEOs immediate family members (spouse, parents, children, etc), which arguably affects CEOs focus. Using a unique dataset from Denmark, we find that CEO (but not board members ) own and family deaths are strongly correlated with declines in firm operating profitability, investment and sales growth. Our CEO shock-outcome analysis allows us to identify the shocks that are the most (least) meaningful for CEOs: the death of children and spouses (mothers-in-law). We show that individual CEO, firm and industry characteristics seem to affect the impact of these shocks. In particular, CEO effects are larger (lower) for longer-tenured (older) CEOs and for those managers with large investment fixed effects. CEO shocks are relevant across the size distribution of firms but are concentrated on those firms that invested heavily in the past. Lastly, we find that CEO shocks tend to be larger in rapid growth, high investment and R&D intensive industries. Overall, our findings demonstrate managers are a key determinant of firm performance. URI: http://hdl.handle.net/10398/7523 Files in this item: 1
wp13-2007.pdf (1.169Mb) -
Filges, Trine; Larsen, Birthe (København, 2000)[More information][Less information]
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Kolm, Ann-Sofie; Larsen, Birthe (København, 2003)[More information][Less information]
Abstract: While examining the macroeconomic effects of government tax and punishment policies, this paper develops a three-sector general equilibrium model featuring matching frictions and worker-firm wage bargaining. Workers are assumed to differ in ability, and the choice of education is determined endogenously. Job opportunities in an informal sector are available only to workers who choose not to acquire higher education. We find that increased punishment of informal activities increases the number of educated workers and reduces the number of unemployed workers. Considering welfare, we show it is optimal to choose punishment rates so to more than fully counteract the distortion created by the government’s inability to tax the informal sector. JEL-codes: H26, I21, J64 Keywords: Tax evasion, underground economy, education, matching, unemployment. URI: http://hdl.handle.net/10398/7558 Files in this item: 1
wpec122003.pdf (356.0Kb) -
Dalgaard, Carl-Johan; Schultz, Esben Anton; Sørensen, Anders (Frederiksberg, 2012)[More information][Less information]
Abstract: Is the wage gap between majors in human arts and other fields caused by their education per se? If the educational choice is endogenous, the gap may instead be caused by selection. We document that individuals’ educational choice is correlated with that of older students, and argue that it should not influence wages directly. Exploiting this "cohort dependence" as an instrument for educational choice, our 2SLS estimates show that the hourly wage gap is attributable to selection. However, only half of the gap in annual earnings is explained by selection, whereas the other half is due to lower work hours. URI: http://hdl.handle.net/10398/8521 Files in this item: 1
dalgaard_schultz_sorensen_2012.pdf (476.2Kb) -
Munch, Jakob Roland; Rose Skaksen, Jan; Malchow-Møller, Nikolaj (København, 2008)[More information][Less information]
Abstract: In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, the use of immigrants may also affect wage formation at the most disaggregate level – the workplace. Using linked employeremployee data, we find that an increased use of workers from less developed countries has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and IV. Additional evidence suggests that this effect works at least partly through a general effect on the wage norm in the firm of hiring employees with poor outside options (the immigrants). URI: http://hdl.handle.net/10398/7665 Files in this item: 1
wp7-2008.pdf (243.0Kb) -
Preliminary Experimental Evidence from Matrilineal and Patriarchal SocietiesBulte, Erwin; List, John A.; Gneezy, Uri; Andersen, Steffen (København, 2008)[More information][Less information]
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Andersen, Steffen; Harrison, Glenn W.; Lau, Morten Igel; Rutström, Elisabet E. (, 2009)[More information][Less information]
Abstract: The most popular models of decision making use a single criteria to evaluate projects or lotteries. However, decision makers may actually consider multiple criteria when evaluating projects. We consider a dual criteria model from psychology. This model integrates the familiar tradeoffs between risk and utility that economists traditionally assume, allowance for rank-dependent decision weights, and consideration of income thresholds. We examine the issues involved in full maximum likelihood estimation of the model using observed choice data. We propose a general method for integrating the multiple criteria, using the logic of mixture models, which we believe is attractive from a decision-theoretic and statistical perspective. The model is applied to observed choices from a major natural experiment involving intrinsically dynamic choices over highly skewed outcomes. The evidence points to the clear role that income thresholds play in such decision making, but does not rule out a role for tradeoffs between risk and utility or probability weighting. URI: http://hdl.handle.net/10398/7798 Files in this item: 1
wp2-2009.pdf (282.4Kb) -
Lagrange versus the HamiltonianKleis Frederiksen, Niels (København, 1998)[More information][Less information]
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Bennedsen, Morten; Wolfenzon, Daniel (København, 2000)[More information][Less information]
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Ghiglino, Christian; Shell, Karl (København, 1998)[More information][Less information]
Abstract: In overlapping-generations economies with perfect financial markets and lumpsum taxation, restrictions on the government budget deficits do not limit the set of achievable allocations. For economies in which tax instruments are distortionary and limited in number, deficits are irrelevant only in the unrealistic case in which the number of tax instruments is large relative to the number of policy goals. In particular, if the government can use only anonymous consumption taxes, then achieving the prescribed deficits without changing the equilibrium allocation will typically be impossible when the number of consumers exceeds the number of commodities. A similar result holds if consumer credit is (exogenously) restricted. Surprisingly, in this case, distortionary taxes may be more likely than lump-sum taxes to lead to the irrelevance of government deficits. Journal of Economic Literature Classification Numbers: D51, D91, E32. Keywords: Balanced Budget, Balanced-Budget Amendment, Burden of the Public Debt, Comparative Statics, Consumption Taxes, Credit Restrictions, Distortionary Taxes, Economic Policy, Government Budget Deficit, Maastricht Treaty, Optimal Taxation, Overlapping Generations. URI: http://hdl.handle.net/10398/7542 Files in this item: 1
1998_3.pdf (310.4Kb) -
Blomgren-Hansen, Niels (København, 1998)[More information][Less information]
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Bennedsen, Morten; Nielsen, Kasper (København, 2001)[More information][Less information]
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Theory and ExperimentsAndersen, Steffen; Fountain, John; Harrison, Glenn W.; Rutström, E. Elisabet (, 2009)[More information][Less information]
Abstract: Subjective beliefs play a role in many economic decisions. There is a large theoretical literature on the elicitation of beliefs, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures that can be used to recover beliefs, but stresses the need to make strong auxiliary assumptions or “calibrating adjustments” to elicited reports in order to recover the latent belief. With some notable exceptions, the empirical literature seems intent on either making those strong assumptions or ignoring the need for calibration. We make three contributions to bridge this gulf. First, we offer a general theoretical framework in which the belief elicitation task can be viewed as an exchange of state-dependent commodities between two traders. Second, we provide a specific elicitation procedure which has clear counterparts in field betting environments, and that is directly motivated by our theoretical framework. Finally, we illustrate how one can jointly estimate risk attitudes and subjective beliefs using structural maximum likelihood methods. This allows the observer to make inferences about the latent subjective belief, calibrating for virtually any well-specified model of choice under uncertainty. We demonstrate our procedures with an experiment in which we elicit subjective probabilities over three future events and one fact. URI: http://hdl.handle.net/10398/7799 Files in this item: 1
wp2009-3.pdf (2.043Mb) -
notat til udvalget om skat og internationaliseringBlomgren-Hansen, Niels (København, 2001)[More information][Less information]
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Boom, Anette (København, 2008)[More information][Less information]
Abstract: This paper uses an adapted version of the linear tracing procedure, suggested by Harsanyi and Selten (1988), in order to discriminate between two types of multiple Nash equilibria. Equilibria of the same type are pay-off equivalent in the analysed multiple-unit unit price auction where two sellers compete in order to serve a fixed demand. The equilibria where the firm with the larger capacity bids the maximum price, serves the residual demand and is undercut by the low capacity firm that sells its total capacity risk dominate the equilibria where the roles are interchanged. URI: http://hdl.handle.net/10398/7664 Files in this item: 1
wp2-2008.pdf (302.0Kb) -
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Abstract: Participation rate on the Greenland labour market: situation of year 2000 A goal is that a large part of the population of normal working age is employed. The participation rate is one of the statistics used to describe the performance of the economy in this respect. Two sources are used to arrive at an estimate of the rate both for Greenland in general and for four regions defined by four so called growth towns: Nuuk, Sisimiut, Ilulissat and Qaqortoq. They are Statistic Greenland’s publications on employment and on unemployment. There are some difficulties using the available data: the employment and unemployment surveys refer to periods whereas the potential workforce is counted at a date. Furthermore persons with yearly income below an arbitrary limit of 40.000 DKK are sorted out even though they should contribute to the number of full year employed. The participation rate is found to be much higher in Nuuk than in the other regions. For Greenland as such the number is in line with figures for Western Europe and North America. Characteristics of people not in the work force are looked for. To some extent a connection exists to the number people receiving pension as disabled, people in education, and those on leave because of childbirth, but the relation is imperfect and great differences are seen between regions. URI: http://hdl.handle.net/10398/7604 Files in this item: 1
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Andersen, Steffen; Fountain, John; Harrison, Glenn W.; Rutström, E. Elisabet (, 2009)[More information][Less information]
Abstract: It is intuitive that decision-makers might have attitudes towards uncertainty just as they might have attitudes towards risk. However, it is only recently that this intuitive notion has been formalized and axiomatically characterized. We estimate the extent of uncertainty aversion in a manner that is parsimonious and consistent with theory. We demonstrate that one can jointly estimate attitudes towards uncertainty, attitudes towards risk, and subjective probabilities in a rigorous manner. Our structural econometric model constructively demonstrates the theoretical claims that it is possible to define uncertainty aversion in an empirically tractable manner. Our results show that attitudes towards risk and uncertainty can be different, qualitatively and quantitatively, and that allowing for these differences can have significant effects on inferences about subjective probabilities. URI: http://hdl.handle.net/10398/7803 Files in this item: 1
wp2009-7.pdf (467.5Kb) -
Andersen, Steffen; Fountain, John; Harrison, Glenn W.; Rutström, E. Elisabet (, 2009)[More information][Less information]
Abstract: Subjective probabilities play a role in many economic decisions. There is a large theoretical literature on the elicitation of subjective probabilities, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures that can be used to recover subjective probabilities, but stresses the need to make strong auxiliary assumptions or “calibrating adjustments” to elicited reports in order to recover the latent probability. With some notable exceptions, the empirical literature seems intent on either making those strong assumptions or ignoring the need for calibration. We illustrate how one can jointly estimate risk attitudes and subjective probabilities using structural maximum likelihood methods. This allows the observer to make inferences about the latent subjective probability, calibrating for virtually any well-specified model of choice under uncertainty. We demonstrate our procedures with experiments in which we elicit subjective probabilities. We calibrate the estimates of subjective beliefs assuming that choices are made consistently with expected utility theory or rank-dependent utility theory. Inferred subjective probabilities are significantly different when calibrated according to either theory. URI: http://hdl.handle.net/10398/7801 Files in this item: 1
wp2009-5.pdf (435.4Kb) -
Ionascu, Delia; Kristjánsdóttir, Helga; Davies, Ronald B. (København, 2007)[More information][Less information]
Abstract: This paper applies the panel fixed effects with vector decomposition estimator to three FDI datasets to estimate the impact of time-invariant variables on FDI while including fixed effects. We find that the omission of fixed effects significantly biases several of these variables, especially those proxying for trade costs and culture. After including fixed effects, we find that many time-invariant variables indicate the importance of vertical FDI. We also find that by eliminating these biases, the differences across datasets largely disappear. Thus, controversies in the literature that are driven by differences in data sets may be resolved by using this estimation technique. JEL Classification: F14, F23 Key Words: Foreign Direct Investment, Trade Costs, Culture URI: http://hdl.handle.net/10398/7610 Files in this item: 1
wp2-2007.pdf (355.7Kb)