Browsing by Subject "Volkswirtschaftslehre"

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    Essays in health economics
    (2018) Kaiser, Micha; Sousa-Poza, Alfonso
    In economic theory a lot of attention is given to the understanding and modelling of consumption decisions of individuals. Usually, most models assume that individuals consume different markets goods and maximize their utility with respect to certain constraints. These constraints can be of various kinds. Besides monetary constraints health related constraints are vitally important during the maximization process of individuals. In such a paradigm, individuals would therefore benefit indirectly from being in a good health state, since this would imply that they are less constrained and could therefore shift their individual utility to a higher level. Moreover, health can also be treated as a good itself. Such an approach would assign a direct effect of different health states to an individuals utility rather than incorporating health states by including them as a source for binding constraints. Apart from the different strategies in modelling the consumption decisions, both ways of thinking have in common that the achievement as well as the maintenance of a good health state is – to some extent - a necessary condition to foster the utility maximization process. Additionally, health outcomes of individuals are highly sensitive to economic circumstances and different policy interventions. For instance, a change in the individuals income will lead to an adjustment of the optimal consumption decision and therefore also to an adjustment of the health outcome (either in a direct or indirect way). Therefore a profound understanding of the impact of changes in economic and political processes helps to assess their effects on the health outcomes of individuals. Hence, this thesis investigates the impact of different economic factors and policy interventions on health. In particular, the thesis contributes to the literature in the following way: Chapter two uses 22 years of data from the German Socio-Economic Panel and information on plant closures to investigate the effects of unemployment on four indicators of unhealthy lifestyles: diet, alcohol consumption, smoking, and (a lack of) physical activity. The main goal is to assess possible causal effects of unemployment on risky behaviors. In fact, in contrast to much of the existing literature the empirical identification strategy used in this analysis, is able to clearly identify exogenous effect and therefore avoids endogeneity, which may result from reversed causality. The main results provide little evidence that unemployment gives rise to unhealthy lifestyles. Chapter three evaluates the relation between preschool care and the well-being of children and adolescents in Germany by using data from the German Health Interview and Examination Survey of Children and Adolescents. Analyzing this relationship is important to provide conclusive knowledge for parents as well as policy-makers due to several reasons. While parents are interested in providing the best health outcomes for their children, policy-makers need to balance a possible trade-off between economic as well as social costs and benefits related to preschool care. Additionally, the chapter examines differences in outcomes based on child socioeconomic background by focusing on the heterogeneous effects for migrant children. The findings suggest that children who have experienced child care have a slightly lower well-being overall. For migrant children, however, the outcomes indicate a positive relation. The fourth chapter analyzes how a nationwide population-based skin cancer screening program (SCS) implemented in Germany in 2008 has impacted the number of hospital discharges following malignant skin neoplasm diagnosis and the malignant melanoma mortality rate per 100,000 inhabitants. Therefore, panel data from the Eurostat database, which covers subregions in 22 European countries is analyzed for the years 2000-2013. By using fixed-effects methods, the causal relationship between the skin cancer screening program and the change in diagnosis and mortality rates are identified and a policy implication is derived. While the results indicate that Germany’s nationwide SCS program is effective in terms of a higher diagnosis rate for malignant skin neoplasms and thus may contribute to an improvement in the early detection of skin cancer, there is no significant influence on the melanoma mortality rate. Chapter five analyzes how closely different income measures conform to Benford’s law, a mathematical predictor of probable first digit distribution across many sets of numbers. Because Benford’s law can be used to test data set reliability, a Benford analysis is applied to assess the quality of six widely used health related survey data sets. This is of particularly importance for health economists, since the majority of empirical work in this field relies on information from survey data. The findings indicate that although income generally obeys Benford’s law, almost all the data sets show substantial discrepancies from it, which can be interpreted as a strong indicator of reliability issues in the survey data. This result is confirmed by a simulation, which demonstrates that household level income data do not manifest the same poor performance as individual level data. This finding implies that researchers should focus on household level characteristics whenever possible to reduce observation errors.
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    Incentives to enforce and stimulate : microeconometric evidence from natural experiments
    (2020) Treber, Lukas; Dwenger, Nadja
    Incentives can be powerful tools to enforce behavior and to stimulate and steer the economy. However, due to the complexity of how incentives are perceived by economic agents, designing effective incentive structures is difficult. A better understanding of incentives enables policymakers to design such policies, ultimately increasing overall well-being. This thesis advances our knowledge on how incentives work, how they change behavior, and how to effectively use them.
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    Social capital from an individual perspective
    (2018) Neidhardt, Jan; Ahlheim, Michael
    Three contributions to the social capital literature are presented in this thesis: Firstly, a concept of social capital that is compatible with the individual perspective prominent in neoclassical economics is identified. Secondly, a new tool to measure individual social capital is developed and applied. Thirdly, results on the distributional effects of a great number of predictors on individual level social capital are obtained and discussed for a representative sample of the German resident population.
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    The economics of elderly care
    (2015) Bauer, Jan Michael; Sousa-Poza, Alfonso
    Longer life expectancy and low fertility rates increase the share of elderly among the population of most industrialized countries. This demographic change affects the economy and the society and is most likely to proceed in the future. Therefore, policy makers and families need to be aware of the implications associated with an aging population. One particularly great challenge comes with the rising number of fragile elderly people, for which most countries are currently unable to provide sufficient care solutions. Germany, for instance, is facing a constantly rising share of people in need that mostly receive informal care from friends and family. Public support promotes these informal care arrangements (§3 SGB XI) and endorses care receivers to remain in their domestic environment. Even though such informal care arrangements are preferred by most families, caregiving can have a large impact on the caregiver’s life. Policy makers need to measure and incorporate these outcomes in order to provide suitable aid for caring families and, thereby, ensuring sustainable and dignified population aging. This dissertation consists of three academic papers and contributes to the topic in several ways: the first paper reviews the recent literature on the effects of informal caregiving on the caregiver and, thereby, assesses the opportunity costs associated with informal care provision. Further, we evaluated the methodology that is commonly used and identify certain risk groups as well as arrangements that are particularly burdensome. The second paper takes a specific look at the subjective well-being of caregivers in Germany and analyzes effects associated with providing care. In contrast to most prior studies, the paper uses large population-based longitudinal data, accounts for unobserved heterogeneity, and estimates the relationship with different methodologies. The paper further values well-being losses monetarily, which allows a comparison to formal care alternatives. The third paper provides new insights on individual selection behavior in the market for supplemental health insurances. This is an increasingly popular way to insure against long-term care needs, a risk not fully covered despite a statutory long-term care insurance. Private insurance markets are fragile in the presences of asymmetric information and, therefore, might not be a sustainable solution to cover the increasing risks of an aging society. We developed an innovative approach to disentangle different selection behaviors in a heterogeneous sample and identify asymmetric information exemplarily for the market of supplemental dental insurance, despite no risk-coverage correlation for the aggregated sample.
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    Unconventional monetary policy : theoretical foundations, transmission mechanisms and policy implications
    (2018) Schmidt, Benjamin; Spahn, Peter
    The financial crisis of 2007-09 can be divided into a ’pre-Lehman’ and a ’post-Lehman’ episode. The ’pre-Lehman’ episode lasted from August 2007 to September 2008 and was largely confined to distressed European and US money markets. In comparison, the ’post-Lehman’ episode was characterized by a global economic slump, deflationary risks, and policy rates at the effective lower bound in most advanced and many emerging economies. Accordingly, part I of this thesis starts with the monetary policy Response to the ’pre-Lehman’ turmoil on interbank markets, while part II addresses unconventional monetary policies at the zero lower bound. Finally, part III provides a theoretical and empirical assessment of their macroeconomic consequences. Beyond that, it also includes a short discussion on potential exit strategies from unconventional monetary policies. Part I: After a preliminary discussion of the way monetary policy is implemented in normal times, chapter 2 presents a simple corridor model of the reserve market. Subsequently, this model is used to describe some crisis-driven innovations in monetary policy frameworks. The key result of this chapter is that by replacing large parts of the malfunctioning interbank market with central bank intermediation, the Fed and the ECB succeeded in preventing an ’adverse spiral’ that may have easily unfolded from the heightened uncertainty among money market participants. As monetary policy in the ’post-Lehman’ era increasingly turned towards lowering the term-premium component of longer-term rates, chapter 3 highlights that the precrisis workhorse model of monetary policy analysis – the baseline New Keynesian model (NKM) – is inappropriate to capture such effects. The reason is that the NKM assumes rational expectations, perfectly flexible financial markets, and the existence of the pure expectations theory of the term structure, which altogether offer the rationale for the Wallace neutrality of central bank open market operations (Wallace, 1981). Accordingly, the chapter ends with the conclusion that most standard dynamic stochastic General equilibrium models (DSGE) lack the conditions conducive for central bank asset purchases to have a direct effect on either nominal or real economic variables. Part II: The second part starts with a basic classification of unconventional monetary policies. Those are: (i) forward guidance, (ii) quantitative vs. qualitative easing, and, (iii)negative policy rates. In a next step, I construct a preferred-habitat model of the term structure, which provides the theoretical foundation for the portfolio balance channel of central bank asset purchases (see chapter 4.2.) Chapter 5 sheds further light on the transmission channels of unconventional policies. In this context, the predictions of economic theory are cross-checked with the empirical evidence for the US, the UK, and the euro area. Since the focus of this thesis lies on the euro area, in chapter 6, I follow Altavilla et al. (2015) and conduct an event study on the ECB’s asset purchase program (APP). In contrast to previous studies, I investigate the set of all official ECB announcements related to the APP over the period from 2014 to 2016. Moreover, I do not confine the analysis to sovereign and corporate bond yields and, thus, provide a more comprehensive perspective on the impact of QE in the euro area. Beyond bond yields, I assess the impact on the European stock markets, on inflation expectations, and on various euro exchange rates. Consistent with the credit risk augmented preferred-habitat theory of chapter 4.2, I find that the APP significantly reduced Italian and Spanish government bond yields, while the effects on German and French yields were much less pronounced. This points to a portfolio balance effect that runs primarily through country-specific risk premia. Beyond its impact on sovereign bonds, the APP also significantly lowered the yields on euro area corporate bonds (both financial and non-financial). While the announcements led to a significant depreciation of the euro against the US dollar, I do not observe a significant effect on expected inflation and interbank swap rates. Hence, the signaling channel and the Inflation reanchoring channel seem to be less important in the euro area than in the US (see e.g. Bauer and Rudebusch, 2014). Part III: Although the immediate impact on financial markets might be a necessary precondition for the effectiveness of unconventional monetary policy, its ultimate Goal is to stabilize inflation and stimulate economic activity. In turn, part III deals with the macroeconomic effects of central bank asset purchases. In this context, firstly, the Impact of QE on the banking system is addressed. By taking a closer look at the empirical evidence for the credit channel in the UK, the euro area and the US, I reach the conclusion that with the ongoing deterioration in bank capital and the persistent economic slump that followed the failure of Lehman Brothers, the positive impact of additional liquidity increasingly receded. Instead, in the ’post-Lehman’ era, any stimulating effect of monetary policy on bank lending acted mainly through the bank capital channel. Given the prevalence of the portfolio balance effect, chapter 8 provides a detailed discussion within a modern DSGE set-up. By drawing on earlier insights from the preferred-habitat theory, this chapter highlights the macroeconomic implications of market segmentation and limits to arbitrage for the effectiveness of central bank asset purchases. In chapter 8.4, I follow Harrison (2012) and extend the portfolio balance model by including financial intermediaries and the zero lower bound on the short-term policy rate. Thereby, I am able to explicitly account for two separate policy instruments at the disposal of the central bank: conventional interest rate policy and central bank Balance sheet operations. This enables me to simulate the impulse response functions of central bank asset purchases in case of a binding and non-binding zero lower bound. Consequently, the simulation exercise underlines the important result that asset purchases are particularly powerful in stabilizing the macroeconomy at the zero lower bound of the short-term policy rate. However, the DSGE simulations provide only a qualitative validation for the theoretical predictions about the portfolio balance effect. Therefore, in chapter 9, I conduct a meta study on the existing empirical evidence concerning the macroeconomic effectiveness of unconventional monetary policies in the US, the UK, and the euro area. And while there is a great dispersion among the individual estimates, it seems evident that the macroeconomic impact of the ECB’s asset purchase program was substantially smaller than those of the Federal Reserve and the Bank of England. Finally, chapter 10 outlines some broad principles with respect to exiting unconventional monetary policies. A key finding of this chapter is that a successful exit strategy should likely involve the following steps: first, forward guidance concerning the expected path of future interest rates; second, the application of temporary reserve drainage operations and/or reserve requirements; third, stopping the reinvestment of maturing assets on the central bank’s balance sheet and, ultimately, the use of asset sales. Furthermore, I argue that potential central bank losses should not pose a serious constraint on plausible exit scenarios. Chapter 11 concludes.