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By means of a laboratory experiment, we show that, contrary to standard consumer theory, financially equivalent balance sheet profiles may be perceived as non fungible in a controlled frictionless environment with no probabilistic attributes. A large majority of subjects indeed have a bias in the perception of wealth, such that balance sheet composition matters: for a given net worth with values of assets and debt that are financially certain and risk-free, a greater asset-debt ratio implies greater perceived wealth. The predominance of this bias is explained by low cognitive sophistication and great inattention. Moreover, biased subjects are less patient, less debt averse, more likely to increase spending out of unexpected gains and report greater propensities to consume. A standard optimal consumption choice model, enriched with a rational but inattentive agent a la Gabaix (2014, 2019), aligns our key experimental findings.

We provide evidence on how responsibility-shifting through delegation occurred in China’s implementation of the one-child policy. We show that trust in local governments was reduced when they were the primary enforcer of the policy (1979–1990), while trust in neighbors was reduced when civilians were incentivized to report neighbors’ violations of the policy to the authorities (1991–2015). This effect was more pronounced among parents of a firstborn daughter, who were more likely to violate the policy due to the deep-rooted son preference. This study provides the first set of field evidence on the responsibility-shifting effect of delegation.

We introduce a new microsimulation model built on household transport data to study the distributional effects of carbon-based fuel taxation of private road transport in Germany. Our data includes annual mileage at the car-level, the distinction between fuel types, as well as car-specific fuel consumption, allowing for a very detailed analysis. The model allows focusing on different types of households as well as identifying effect heterogeneity across the income distribution. We compare the recent fuel tax scheme with three policy reform scenarios to empirically test several hypotheses regarding distributional effects of carbon pricing. We find that the legal status quo of the fuel tax has overall regressive effects, with the tax on petrol acting regressive and the tax on diesel acting progressive. A transformation of the current tax into a revenue-neutral carbon-harmonised fuel tax yields a progressive distributional effect, while an introduction of a new carbon tax on transport fuels is neither clearly regressive nor progressive. Combining both tax schemes also has non-regressive effects. Our results suggest that policy makers face various options for pricing road transport greenhouse gas emissions without causing an overall disproportionate tax burden on low-income households.

What are the effects of austerity on distributional policy? We exploit the autonomy of Italian municipalities in setting non-linear income taxes and the exogenous introduction of a fiscal rule to show that austerity increases income tax progressivity. Consistent with this evidence, we find that in a panel of countries austerity correlates with higher marginal tax rates on top- but not on average-earners. The increase in progressivity in Italy is driven by high-skilled mayors, while low-skilled mayors raise taxes uniformly. In the election after the reform, high-skill mayors have higher reelection odds than low-skill mayors, while there was no difference beforehand.

Conditional yield skewness is an important summary statistic of the state of the economy. It exhibits pronounced variation over the business cycle and with the stance of monetary policy, and a tight relationship with the slope of the yield curve. Most importantly, variation in yield skewness has substantial forecasting power for future bond excess returns, high-frequency interest rate changes around FOMC announcements, and consensus survey forecast errors for the ten-year Treasury yield. The COVID pandemic did not disrupt these relations: historically high skewness correctly anticipated the run-up in long-term Treasury yields starting in late 2020. The connection between skewness, survey forecast errors, excess returns, and departures of yields from normality is consistent with a theoretical framework where one of the agents has biased beliefs.

We consider the problem of designing experiments for the comparison of two regression curves describing the relation between a predictor and a response in two groups, where the data between and within the group may be dependent. In order to derive effi- cient designs we use results from stochastic analysis to identify the best linear unbiased estimator (BLUE) in a corresponding continuous time model. It is demonstrated that in general simultaneous estimation using the data from both groups yields more precise results than estimation of the parameters separately in the two groups. Using the BLUE from simultaneous estimation, we then construct an efficient linear estimator for finite sample size by minimizing the mean squared error between the optimal solution in the continuous time model and its discrete approximation with respect to the weights (of the linear estimator). Finally, the optimal design points are determined by minimizing the maximal width of a simultaneous confidence band for the difference of the two regression functions. The advantages of the new approach are illustrated by means of a simulation study, where it is shown that the use of the optimal designs yields substantially narrower confidence bands than the application of uniform designs. Discussion Paper / SFB823;2/2021

We study the collusive efficacy of competition clauses (CC) such as the meeting competition clause (MCC) and the beating competition clauses (BCC) in a general framework. In contrast to previous theoretical studies, we allow for repeated interaction among the retailers and heterogeneity in their sales capacities. Besides that, the selection of the form of the CC is endogeneized. The retailers choose among a wide range of CC types - including the conventional ones such as the MCC and the BCCs with lump sum refunds. Several common statements about the collusive (in)efficacy of CCs cannot be upheld in our framework. We show that in the absence of hassle costs, MCCs might induce collusion in homogeneous markets even if they are adopted only by few retailers. If hassle and implementation costs are mild, collusion can be enforced by BCCs with lump sum refunds. Remarkably, these fundings hold for any reasonable rationing rule. However, a complete specification of all collusive CCs is in general impossible without any further reference to the underlying rationing rule.

The Central Andes (~21°S) is a subduction-type orogeny formed in the last ~50 Ma from the subduction of the Nazca oceanic plate beneath the South American continental plate. However, the most important phases of deformation occur in the last 20 Ma. Pulses of shortening have led to the sudden growth of the by the Altiplano-Puna plateau. Previous studies have provided insights on the importance of various mechanisms on the overall shortening such as the weakening of the overriding plate from crustal eclogitization and delamination, or the importance of a relatively high friction at the subduction interface, and weak sediments in foreland. However none of them has addressed the mechanism behind these shortening pulses yet. Therefore, we built a series of high resolution 2D visco-plastic subduction models using the ASPECT geodynamic code, in which the oceanic plate is buoyancy-driven and the velocity of the continent is prescribed. We have also implemented a realistic geometry for the south American plate at ~30 Ma. We propose a new plausible mechanism (buckling and steepening of the slab) as the cause of these pulses. The buckling leads to the blockage of the trench. Consequently, the difference of velocity between the South American plate and the trench is accommodated by shortening. The data presented here includes the parameters files, for the reference model (S1) and the following alternative simulations: models with variation of the friction at the subduction interface (S2a-c), a model without eclogitization of the lower crust (S3) and a model with higher thermal conductivity of the upper crust (S4). Additionally, this publication includes the initial composition and thermal state of the lithosphere used for the models and a Readme file that gives all the instructions to run them.

Die Umsetzung der Gemeinsamen Agrarpolitik (GAP) 2023 bis 2027 erfolgt im Rahmen nationaler Strategiepläne. Dieses Working Paper untersucht die zur Genehmigung eingereichten Strategiepläne hinsichtlich ihrer finanziellen Schwerpunkte, um Gemeinsamkeiten, Unterschiede und übergreifende Muster der nationalen GAP-Umsetzung zu erfassen. Die Ergebnisse sollen eine grundlegende Orientierung für die neue Förderperiode und Ansatzpunkte für weitere vertiefende Untersuchungen liefern. Es zeigt sich, dass die Mitgliedstaaten die Umsetzungsspielräume der Strategieplanverordnung in vielfältiger Weise nutzen. Die nationalen Pläne weisen trotz gemeinsamer Ziele und Förderleitplanken große inhaltliche und finanzielle Heterogenität auf. Im grundlegenden Design der Pläne zeigt sich diese Verschiedenheit u. a. in der Umschichtung zwischen 1. und 2. Säule und der Höhe der Beteiligungssätze. In der 1. Säule variieren unter den Mitgliedstaaten nicht nur die Anteile von entkoppelten und gekoppelten Direktzahlungen sowie den neu eingeführten Ökoregelungen; auch inhaltlich sind die jeweiligen Angebote sehr unterschiedlich. Dabei erreichen die Ökoregelungen insgesamt nur knapp den vorgeschriebenen Mindestanteil, während die Möglichkeiten für gekoppelte Direktzahlungen vielerorts nahezu ausgereizt werden. Bei den Interventionen in bestimmten Sektoren sind ebenfalls Unterschiede zu erkennen. Zum Teil sind die Angebote sehr kleinteilig, im Wesentlichen aber fließen die Mittel in die Sektoren Obst und Gemüse sowie Wein. Die 2. Säule ist insgesamt von Kontinuität geprägt. Trotz des neuen Angebots von Ökoregelungen in der 1. Säule behalten Agrarumwelt- und Klimamaßnahmen ihre Bedeutung in der 2. Säule. Die Förderung des Ökolandbaus und von Tierwohlmaßnahmen nimmt relativ betrachtet sogar leicht zu. Gleiches gilt für das Risikomanagement, bei dem insbesondere Italien und Frankreich auf GAP-Mittel setzen. Die Förderung von Investitionen verliert indes an relativer Bedeutung. Wichtiger als Veränderungen zur laufenden Förderperiode sind nationale Unterschiede: Die Strategiepläne messen den Interventionen stark variierende Bedeutung zu.Trotz aller Heterogenität fokussieren die Strategiepläne säulenübergreifend vornehmlich auf den Agrarsektor; Daseinsvorsorge und Unternehmensentwicklung in ländlichen Räumen sowie der Forstsektor spielen lediglich Nebenrollen. Die dabei verfolgten Ziele konzentrieren sich auf die Bereiche Einkommen, Wettbewerbsfähigkeit und Umwelt. Dieses Bild zeigt sich in abgeschwächter Form auch, wenn nur die 2. Säule berücksichtigt wird. Gleichwohl sind die eingereichten Strategiepläne in ihrer gesamten Vielfalt ein weiterer Ausweis der Subsidiarität in der Gemeinsamen Agrarpolitik. The Common Agricultural Policy (CAP) 2023-2027 is implemented through national strategic plans. This paper examines the strategic plans submitted for approval, analysing their financial priorities to identify commonalities, differences and overarching patterns of national CAP implementation. It aims to provide general orientation on the new funding period as well as starting points for further studies. The paper shows that the member states use the discretion granted in the Strategic Plan Regulation in various ways. Despite common goals and funding guidelines, the plans show great heterogeneity. Regarding the general design, the plans differ quite vastly mainly in the reallocation of funds between the First and the Second Pillar or the level of contribution rates. In the First Pillar, the plans not only vary in their shares of decoupled and coupled direct payments as well as the newly introduced eco-schemes; they also differ considerably in how these interventions are designed. Overall, the funds planned for eco-schemes are slightly above the prescribed minimum, while some member states are close to the maximum share of coupled direct payments. Interventions in specific sectors also vary. Some offerings are highly differentiated; however, most funds will flow into the fruit and vegetable and wine sectors. The Second Pillar is marked by overall continuity. Despite the eco-schemes in the First Pillar, agri-environment-climate measures also remain important in the Second Pillar. Support for organic farming and animal welfare measures even increase slightly in relative terms. The same is true for risk management, where Italy and France make substantial use of CAP funds. Support for investments remains high, but becomes less important. More significant than the changes compared to the current funding period are national differences: The strategic plans attribute quite different importance to each of these interventions. Despite the heterogeneity, the strategic plans heavily focus on the agricultural sector; services of general interest and business development in rural areas as well as the forestry sector are only secondary. The goals primarily pertain to income, competitiveness and the environment. This pattern is also evident, albeit in a weakened form, if only the Second Pillar is considered. Nevertheless, the overall diversity of strategic plans is further evidence of the subsidiarity in the Common Agricultural Policy.