market contagion evidence from the panics of 1854 and 1857 to test a model of contagion where individuals hear some bad news and communicate it to their acquaintances who then pass it on leading to a market panic requires a knowledge of the information networks of participants something hitherto unavailable for two panics in the 1850s this paper examines the behavior of irish depositors in a new york bank as recent immigrants their social network was determined largely by their place of origin in ireland and where they lived in new york during both panics this social network turns out to be the prime determinant of behavior

the substitutability of non fossil energy potential carbon emission reduction and energy shadow prices in china abstract the rapidly increasing consumption of energy and fossil fuel dominated energy structure have caused great pressure on energy security and carbon reduction policies in china and the chinese government has attempted to substitute fossil with non fossil energy to investigate the feasibility of replacing fossil energy with non fossil energy in china we apply an input distance function to estimate the substitutability of non fossil energy for fossil energy and compare shadow prices the result confirms the feasibility of substituting non fossil energy for fossil energy we then divide the non fossil energy into nuclear energy and renewable energy and find that nuclear energy is more suitable than renewable energy to substitute for fossil energy the shadow price ratio of non fossil to fossil energy is 268 41 on average in the study period the ratio experiences several fluctuations and shows a declining trend at the end of the study period implying that improving energy structure in china is very promising

time inconsistent preferences and the annuitization decision good news can involve difficult decisions for example winning a lottery jackpot can go along with the decision whether to have the jackpot paid out immediately as a lump sum or as periodic annual payments also when entering retirement most people face the decision whether they want their defined contribution account balance paid as a lump sum or to annuitize that amount the fact that people tend to choose the lump sum even if economic reasons suggest that they should choose the annuity is called the annuity paradox in a large online survey we find that people behave time inconsistent older people have a stronger tendency to choose the lump sum than younger people when they are asked to predict today what to choose when they retire this effect is considerably stronger for participants that answer simple time preference questions inconsistently our findings suggest to think about precommitment devices for the annuitization decision in the retirement case already at the time when the defined benefit plan is started

coworker influence on annuitization decisions evidence from defined benefit plans abstract we investigate the role of coworker influence on an individual s annuitization decision using rich data on payout options and decisions in defined benefit plans we find that past payout choices of coworkers significantly affect an employee s decision to annuitize at retirement and that the coworkers payout choices have a larger economic effect on annuitization than recent stock market returns we also find that coworker effects are greater for employees who have a similar level of benefit amounts those who share geographic proximity same zip code and those who retire at a norm modal retirement age of their workplace robustness tests show that estimated coworker effects are unlikely to be driven by unobserved common environments or similar preferences

dusenberry s ratcheting of consumption optimal dynamic consumption and investment given intolerance for any decline in standard of living duesenberry s ratcheting consumption demand is derived as a feature of the optimal dynamic consumption and investment policy given extreme habit formation that prevents consumption from falling over time preferences are in effect non time separable extended real valued von neumann morgenstern preferences consumption increases each time wealth reaches a new maximum risky investment is proportional to the excess of wealth over the perpetuity value of current consumption extensions constrain the net rate of decrease in consumption with a constant other than zero add more consumption goods and constrain on the maximal holding of the risky asset as a proportion of wealth these strategies may be useful for the management of university endowments participatory investment accounts and risky arbitrage funds

habit formation interdependent preferences and demographic effects in the almost ideal demand system the authors model myopic habit formation interdependence of preferences among consumers and demographic effects as taste shifters in a micro consumer demand model of the almost ideal demand variety the model is estimated for dutch micro data the authors investigate the dynamic properties of the model and find that it behaves very differently from models without interdependence of preferences the implications for micro macro modeling are discussed copyright 1991 by royal economic society

coordinating regime switches the canonical model of strategic complementarities between individual actions which exhibits multiple equilibria under perfect information is extended with heterogeneous agents and imperfect information agents observe their own cost of action and the history of the levels of aggregate activity the distribution of individual characteristics evolves through a random process and individuals are rational bayesians under plausible conditions there is a unique equilibrium with phases of high and low activity and random switches applications may be found in macroeconomics and revolutions

the floor leverage rule for retirement the floor leverage rule is a spending and investment strategy designed for retirees who can tolerate investment risk but insist on sustainable spending the rule calls for purchasing a spending guarantee with 85 of wealth and investing the remaining 15 in equities with 3 leverage surprisingly this leverage is a tool for managing risk the authors compare the rule with some popular strategies illustrate it for a variety of retiree preferences and evaluate its historical performance

the evolution of chinese industrial co2 emissions 2000 2050 a review and meta analysis of historical drivers projections and policy goals the emissions of the chinese industrial sector alone comprise 24 1 of global emissions 7 8 gtcyr 1 in 2015 this makes chinese industrial emissions of unique national and international relevance in climate policy this study reports a literature survey that quantitatively describes the evolution of these emissions from 2000 to 2050 in the context of policy goals the survey reveals that 1 the major historical factor contributing to the decrease in industrial co2 emissions has been the reduction in energy intensities however that decrease has been more than compensated for by increases in industrial activity 2 an ensemble of projections shows that china s industrial emissions will likely peak in 2030 in alignment with china s commitment to the paris agreement the timing of the peak varies across industrial sub sectors with ferrous metals and non metallic products sectors peaking first and the electricity sector later 3 the assumptions underlying optimistic scenarios broadly match the drivers of recent decreases in historical emissions energy intensity industrial structure and energy mix furthermore these factors feature prominently in china s policy portfolio to both develop and decarbonize the chinese industrial sector the industrial carbon intensity targets of 2020 and 2025 are close to the median predictions in the medium scenarios from studies 2019 the authors

overall review of the overcapacity situation of china s thermal power industry status quo policy analysis and suggestions abstract china s thermal power industry has gone through the phases of rapid development in the last decade but the excessive enthusiasm of thermal power investment is making this industry overcapacity the unbalanced demand supply relationship in electric power market greatly affects the economic benefit of most thermal power plants in this paper we give an overall review of the overcapacity situation of china s thermal power industry which is supported by latest data then policy orientation and its effect is discussed it can be found out that policies on the respect of construction scale control renewable power integration feed in tariff reduction and environmental protection were considered as the main solution to relieve the over capacity situation finally we propose three suggestions for the future development of china s thermal industry

impact of emission regulation policies on chinese power firms reusable environmental investments and sustainable operations abstract this study investigates the impact of emission regulation policies i e emergency response policy versus long term protection policy on the investment levels of reusable environmental facilities e g desulphurization pumps used by coal fired power plants in china to improve their sustainable operations to set up a baseline for further analysis and compare the impact of emission regulation policies an improved framework for performance evaluation of sustainable operations is developed in this study by integrating classical data envelopment analysis dea and exponential learning curve the proposed mathematical models are applied into an empirical study of 27 major million kw coal fired power plants in mainland china empirical analysis shows that the interactions among official emission regulation policies reusable environmental investment rei and sustainable operations management of coal fired power plants in china several policy suggestions are provided for power firm managers and policy makers in china specifically we suggest that the chinese government should implement long term protection policies in less developed regions instead of emergency response policies

the longevity annuity an annuity for everyone as of 2005 u s individuals had an estimated 7 4 trillion invested in iras and employer sponsored retirement accounts many retirees will thus face the difficult problem of turning a pool of assets into a stream of retirement income purchasing an immediate annuity is a common recommendation for retirees trying to maximize retirement spending the vast majority of retirees however are unwilling to annuitize all their assets this research demonstrates that a longevity annuity which is distinct from an immediate annuity in that payouts begin late in retirement is optimal for retirees unwilling to fully annuitize for a typical retiree allocating 10 15 percent of wealth to a longevity annuity creates spending benefits comparable to an allocation to an immediate annuity of 60 percent or more

interdependent preferences an econometric analysis the theoretical model of gaertner 1974 and pollak 1976 for the interdependence of preferences in the linear expenditure system is estimated for a cross section of households the interdependence of consumption of different households has implications for the stochastic structure of the model and for the identifiability of its parameters both aspects are dealt with the empirical results indicate a significant role played by the interdependence of preferences one of its implications is that predictions of the effects of changes in a household s exogenous variables differ according to whether the exogenous variable only changes for this household or for all households jointly c 1997 john wiley sons ltd

portfolio optimization with mental accounts we integrate appealing features of markowitz s mean variance portfolio theory mvt 4 and shefrin and statman s behavioral portfolio theory bpt into a new mental accounting 5 ma framework features of the ma framework include an ma structure of portfolios 6 a definition of risk as the probability of failing to reach the threshold level in each mental 7 account and attitudes toward risk that vary by account we demonstrate a mathematical 8 equivalence between mvt ma and risk management using value at risk var the ag9

decoupling economic growth from carbon dioxide emissions in china a sectoral factor decomposition analysis china is facing the dilemma of how to coordinate economic development and carbon dioxide co2 emissions reduction this paper investigates the decoupling effect of economic growth from co2 emissions in china during the period 1992 2012 using the logarithmic mean divisia index lmdi method we decompose the driving forces of the decoupling of economic growth from co2 emissions in china s five major economic sectors into several factors and measure the contribution of each factor to the decoupling of china s overall economy from co2 emissions the results show that china performed the weak decoupling of economic growth from co2 emissions during 1992 2012 and so did all its five major sectors such a state did not occur smoothly and presented five different stages energy intensity and economic activity level were the most important factors affecting the decoupling in china energy intensity decreased in all sectors indicating a large acceleration for the sectoral decoupling states this finding is applicable to process carbon intensity in industrial sector and energy emission factor in agricultural industrial construction and service sectors in terms of sectoral effects on the decoupling in china industrial sector played a dominant role while construction sector had the most marginal influence the economic activity level and economic share of industrial sector exerted the most negative effects on the decoupling the energy intensity of industrial sector played a key role in promoting the national decoupling state while the energy emission factor of agricultural sector contributed the least

making retirement income last a lifetime to enable investors to spend down the assets in their defined contribution accounts more easily the authors propose a decumulation benchmark comprising a laddered portfolio of tips for the first 20 years consuming 88 percent of available capital and a deferred life annuity purchased with the remaining 12 percent this portfolio can be used directly by the investor akin to indexing or as a benchmark for evaluating the performance of a more aggressive strategy

decoupling co2 emissions and industrial growth in china over 1993 2013 the role of investment abstract since industrial sector is a leading energy consumer and co 2 emitter in china the degree of the decoupling of co 2 emissions and industrial growth plays a critical role in realizing the energy conservation and emission reduction goals of china this is the first study to present a specific investigation on the decoupling of co 2 emissions and industrial growth in china from 1993 to 2013 using an extended logarithmic mean divisia index lmdi model focusing on both energy related and process related co 2 emissions and introducing three novel investment factors i e investment scale investment share and investment efficiency we highlight and explore the remarkable role of investment in the mitigation and decoupling of co 2 emissions with industrial growth the results show that china s industrial sector experienced the weak decoupling during 1993 2013 the investment scale is the most important factor responsible for the increase in co 2 emissions and the inhibition of the decoupling the investment efficiency effect has a volatile trend and overall it plays the most significant role in reducing co 2 emissions followed by the energy intensity effect and process carbon intensity effect whereas the energy mix carbon coefficient and investment share have marginal effects among 36 industrial sub sectors the seven factors of rcmcp raw chemical materials and chemical products nmp nonmetal mineral products and spfm smelting and pressing of ferrous metals have significant effects on the decoupling thus the three sub sectors should be among the top concerns for abating co 2 emissions finally we provide policy recommendations considering both conventional and investment factors for china s industrial sector to realize emission reduction targets

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

the response of the beijing carbon emissions allowance price bjc to macroeconomic and energy price indices in 2013 china opened pilot carbon emission trading markets in seven provinces where carbon emission allowances have now been traded for more than two years in this paper we employ a structural var model and the price of the beijing carbon emission allowance to study the dynamic relationships among the price of the carbon emission allowance economic development and the price of energy this paper s data cover the period from april 2 2014 to november 6 2015 this paper provides information that will be helpful to both investors and governmental policy makers the results show that 1 an increase of one standard deviation in the coal price leads to an initial increase of approximately 0 1 in the beijing carbon price after 2 days there is a decrease of less than 0 1 and the price gradually increases by approximately 0 1 after 30 days 2 the price of the beijing carbon emission allowance is mainly affected by its own historical price 3 the beijing carbon emission allowance price crude oil price natural gas price and economic development have positive albeit non significant correlations

complementarity and custom in wage contract violation abstract we present and estimate a model with strategic complementarities in firms choices of on time or delayed wage payment linked employer employee panel data from russia facilitate identification of the endogenous interactions through fixed effects for firms workers and local labor markets and instrumental variables based on policy interventions the estimated reaction function displays strongly positive neighborhood effects and the estimated feedback loops worker quits effort strikes and legal penalties imply that costs of wage delays are attenuated by neighborhood arrears we also study a nonlinear case with two stable symmetric equilibria a punctual payment and a late payment equilibrium

an investigation of time preferences life expectancy and annuity versus lump sum choices can smoking harm long term saving decisions abstract we exploit the fact that israeli pension insurance policies do not take health conditions or smoking status into account in annuity pricing to investigate the potential effect of being a smoker on retirement payout choices contrary to the idea that smokers have higher discount rates and thus should prefer the lump sum option and even though the insurance pricing mechanism means that smokers would be offered the same annuity as nonsmokers all else equal we find that smokers do not prefer the lump sum option we offer and test several potential explanations for our findings illusions regarding life expectancy self control and advantageous selection

why don t people insure late life consumption a framing explanation of the under annuitization puzzle rational models of risk averse consumers have difficulty explaining limited annuity demand we posit that consumers evaluate annuity products using a narrow investment frame that focuses on risk and return rather than a consumption frame that considers the consequences for lifelong consumption under an investment frame annuities are quite unattractive exhibiting high risk without high returns survey evidence supports this hypothesis whereas 72 percent of respondents prefer a life annuity over a savings account when the choice is framed in terms of consumption only 21 percent of respondents prefer it when the choice is framed in terms of investment features

optimal taxation when consumers have endogenous benchmark levels of consumption i examine optimal taxes in an overlapping generations economy in which each consumer s utility depends on consumption relative to a weighted average of consumption by others the benchmark level of consumption as well as on the level of the consumer s own consumption the socially optimal balanced growth path is characterized by the modi ed golden rule and by a condition on the intergenerational allocation of consumption in each period a competitive economy can be induced to attain the social optimum by a lump sum pay as you go social security system and a tax on capital income

anorexia body image and peer effects evidence from a sample of european women excessive preoccupation with self image or identity is regarded as a factor contributing to the proliferation of food disorders especially among young women this paper models how self image and peer effects influence health related behaviours specifically food disorders we empirically test our claims using data from the eurobarometer survey our findings suggest that the larger peers body mass the lower the likelihood of being anorexic self image is correlated with body weight we use several definitions of peers body mass and find that all are negatively associated with the likelihood of women being thin or extremely thin

an experimental test of the under annuitization puzzle with smooth ambiguity and charitable giving abstract in a life cycle model with a bequest motive we study the impact of smooth ambiguity aversion to uncertain survival probabilities on the optimal demand for annuities we implement a theory driven laboratory experiment first a subject s ambiguity attitude is elicited in a simple experimental setting able to make the smooth ambiguity model operational then in a two period annuity bequest decision problem the subject s bequest in the second period is presented as a donation to a previously chosen charity contingent to the subject being active after the first period in line with the theoretical predictions we find that ambiguity averse resp loving subjects invest less resp more in annuities than ambiguity neutral ones furthermore subjects contingent donation to the chosen charity increases in their investment in annuities only for sufficiently high levels of warm glow altruism

following the crowd leisure complementarities beyond the household leisure externalities across households have important implications for labor market regulations but have proven very difficult to identify this paper exploits the unique features of school holidays and paid leave regulations in france to show that exogenous increases in the amount of leisure time enjoyed by workers living with children induce very significant increases in the demand for leisure of workers living in other households we also provide evidence that these cross effects are driven by complementarities in nonmarket time rather than workplace norms or workplace externalities

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

does energy price regulation benefit china s economy and environment evidence from energy price distortions abstract china s energy prices have long been regulated due to the critical role energy plays in economic growth and social development which leads to energy price distortion to some extent to figure out whether energy price regulations will benefit china s economy measured by gdp growth and environment measured by carbon emissions we conducted an in depth simulation using path analysis where five energy products natural gas gasoline fuel oil steam coal and coking coal are selected and three measurements absolute relative and moving of energy price distortions are calculated the results indicate that with a series of energy pricing policies the price distortion for a single type of energy has gradually transformed while the energy pricing system in china is not fully market oriented yet furthermore china s economy benefits from relative and moving distortions while the absolute distortions of energy prices have negative impacts on economic growth finally with regard to the environment carbon emissions call for fewer distortions

the lmdi approach to decomposition analysis a practical guide in a recent study ang energy policy 32 2004 compared various index decomposition analysis methods and concluded that the logarithmic mean divisia index method is the preferred method since the literature on the method tends to be either too technical or specific for most potential users this paper provides a practical guide that includes the general formulation process summary tables for easy reference and examples

is it really good to annuitize although rational consumers without bequest motives are better off investing exclusively with annuitized instruments in partial equilibrium we demonstrate the welfare effect of annuitization is ambiguous in general equilibrium on account of pecuniary externalities absent institutional constraints like prices and budgets the optimal consumption rule would have marginal utility increase at the preferential discount rate in a rational competitive equilibrium where households fully annuitize the growth rate of marginal utility will be the discount rate minus the interest rate resulting in a consumption profile that is too flat accidental bequests transfer wealth from the old to the young steepening the consumption profile and yielding a better equilibrium if households are restricted to keynesian consumption functions the optimal irrational equilibrium with standard preferences can replicate observed consumption and macroeconomic behavior and the equilibrium without annuities delivers higher utility than the equilibrium with annuities whereas preceding papers have merely hypothesized that households might engage in socially optimal yet irrational behavior the failure of households to annuitize is a real world example of this policymakers should not take steps to encourage more annuitization by the public

carbon emission intensity in electricity production a global analysis we study changes in the aggregate carbon intensity aci for electricity at the global and country levels the aci is defined as the energy related co2 emissions in electricity production divided by the electricity produced it is a performance indicator since a decrease in its value is a desirable outcome from the environmental and climate change viewpoints from 1990 to 2013 the aci computed at the global level decreased only marginally however fairly substantial decreases were observed in many countries this apparent anomaly arises from a geographical shift in global electricity production with countries having a high aci increasingly taking up a larger electricity production share it is found that globally and in most major electricity producing countries reduction in their aci was due mainly to improvements in the thermal efficiency of electricity generation rather than to fuel switching estimates of the above mentioned effects are made using lmdi decomposition analysis our study reveals several challenges in reducing global co2 emissions from the electricity production sector although technically the reduction potential for the sector is known to be great

do neighborhoods affect hours worked evidence from longitudinal data using a confidential version of the nlsy79 we estimate large effects of neighborhood social characteristics and job proximity on labor market activity a variety of neighborhood social characteristics are associated with less market work social characteristics have nonlinear effects with the greatest impact in the worst neighborhoods social characteristics are also more important for less educated workers exploiting the panel aspects of our data we find that estimates that do not account for neighborhood selection on the basis of time invariant and time varying unobserved individual characteristics substantially overstate the social effects of neighborhoods but understate the effects of job access

interdependent behavior and the effect of taxes abstract the paper studies the effect of taxes on labor supply in a model with interdependent behavior i e individuals preferences depend on other people s behavior it is found that not taking the interdependency into account can lead to a serious bias in the predicted effects of a tax change it is also shown that interdependent behavior can give rise to spikes in the hours distribution such spikes often have been attributed to quantity constraints

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

discrete choice with social interactions this paper provides an analysis of aggregate behavioural outcomes when individual utility exhibits social interaction effects we study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behaviour of others in an environment of noncooperative decisionmaking laws of large numbers are generated in such environments multiplicity of equilibria in these models which are equivalent to the existence of multiple self consistent means for average choice behaviour will exist when the social interactions exceed a particular threshold local stability of these multiple equilibria is also studied the properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices finally a likelihood function based on the theoretical model is given and conditions for the econometric identifiability of the model are established

behavioral obstacles in the annuity market as baby boomers enter retirement they will look to the investment industry for ways to generate income from accumulated savings why most retirees do not purchase longevity insurance in the form of lifetime annuities is a long standing puzzle mental accounting and loss aversion can explain the unpopularity of annuities by framing them as risky gambles where potential losses loom larger than potential gains moreover behavioral anomalies can explain the prevalence of period certain annuities which guarantee a minimum number of payouts finally investors may prefer longevity annuities purchased today to begin payouts in the future to immediate annuities because investors overweight the small probability of living long enough to receive large future payouts

social interactions in labor supply our research examines the effect of interdependence on estimation and interpretation of earnings labor supply equations we consider the cases of 1 a positive spillover from others labor supplied and 2 a need for conformity with others labor supplied qualitative and quantitative comparative statics results with a stone geary utility function demonstrate how spillover effects increase labor supply uniformly alternatively conformity effects move labor supplied toward the mean of the reference group so that in the limit labor supply becomes perfectly inelastic at the reference group average when there are unmodeled exogenous social interactions conventional wage elasticities are still relatively well estimated although structural parameters may not be omitting endogenous social interactions may seriously misrepresent the labor supply effects of policy however jel d11 j22 z13

decomposition of ireland s carbon emissions from 1990 to 2010 an extended kaya identity in recent decades ireland has been an important example of a development pathway where rapid economic growth was accompanied by rising energy demand and increasing carbon emissions understanding the driving forces of carbon emissions is necessary for policy formulation and decomposition analysis is widely used for this purpose this study uses an extended kaya identity as the scheme and applies the log mean divisia index lmdi i as the decomposition technique change in carbon emissions is decomposed from 1990 to 2010 and includes a measure of the effect of renewable energy penetration results illustrate that scale effects of affluence and population growth act to increase emissions and are countered primarily by energy intensity and fossil fuel substitution renewable energy penetration has a minor effect but has been increasing in recent years policy will need to significantly reduce intensity and increase renewables if applicable targets are to be reached this requires not only a comprehensive suite of policies and measures but emphasis on the development path and non technical change for optimal outcomes

will recent boom in coal power lead to a bust in china a micro economic analysis abstract in this paper by adopting the levelized cost of electricity model and the financial appraisal method we provide an economic interpretation for china s recent coal power bubble under weak demand growth the study surveys the economics of a typical 600 mw newly built pure condensing coal fired power plant in six case provinces shanxi inner mongolia xinjiang hebei jiangsu and guangdong where the profitability margins of coal power are above national average by the end of 2015 results indicate that the continuous falling in coal prices have lowered the generation costs but there has been insufficient adjustment to the benchmark on grid tariff enabling coal power to obtain unprecedented excess profits such excess profits have spurred the investment and caused local government to over rely on coal power under economic downturn however in the context of cost escalation by deteriorated operation efficiency higher environmental and climate change compliance costs and fierce market competition the profitability of coal power will dissipate soon integrated power capacity plan consistent with the new economic normal stringent control on the scale of new coal power projects and deep power market reform are the key policy implications of our analysis

equity and efficiency in human capital investment the local connection a general model of community formation and human capital accumulation with social spillovers and decentralized school funding is used to analyse the causes of economic segregation and its consequences for equity and efficiency significant polarization arises from minor differences in endowments preferences or access to capital markets this makes income inequality more persistent across generations but the same need not be true for wealth equilibrium stratification tends to be excessive resulting in low aggregate surplus whether state equalization of school resources can remedy these problems hinges on how purchased social and family inputs interact in education and in mobility decisions

economics and identity this paper considers how identity a person s sense of self affects economic outcomes we incorporate the psychology and sociology of identity into an economic model of behavior in the utility function we propose identity is associated with different social categories and how people in these categories should behave we then construct a simple game theoretic model showing how identity can affect individual interactions the paper adapts these models to gender discrimination in the workplace the economics of poverty and social exclusion and the household division of labor in each case the inclusion of identity substantively changes conclusions of previous economic analysis

annuities and individual welfare advancing annuity demand theory we present suffcient conditions for the optimality of full annuitization under market completeness that are substantially less restrictive than those used by yaari 1965 we examine demand with market incompleteness finding that positive annuitization remains optimal widely but complete annuitization does not how uninsured medical expenses affect demand for illiquid annuities depends critically on the timing of the risk a new set of calculations with optimal consumption trajectories very different from available annuity income streams still shows a preference for considerable annuitization suggesting that limited annuity purchases are plausibly due to psychological or behavioral biases

health cost risk a potential solution to the annuity puzzle we find that health cost risk lowers optimal annuity demand at retirement if medical expenses can be sizeable early in retirement full annuitisation at retirement is no longer optimal because agents do not have enough time to build a liquid wealth buffer furthermore large deviations from optimal annuitisation levels lead to small utility differences our results suggest that health cost risk can explain a large proportion of empirically observed annuity choices finally allowing additional annuitisation after retirement results in welfare gains of at most 2 5 when facing health cost risk and negligible gains without this risk

identifying interdependent behaviour in an empirical model of labour supply in this paper we test a particular form of interdependent behavior namely the hypothesis that individuals choices of hours of work are influenced by the average hours of work in a social reference group there are problems to empirically disentangle the effects of interdependent behavior and preference variation across groups we show that panel data or data from several points in time are needed in the empirical analysis we combine cross section data from 1973 1980 and 1990 our results support the hypothesis of interdependent behavior the implication is that conventional tax policy predictions in which preference interdependencies are neglected will tend to underestimate the effect of a tax reform on hours of work our point estimates suggest that conventional calculations would capture only about a third of the actual change in hours of work

don t lapse into temptation a behavioral explanation for policy surrender abstract many policyholders surrender their life insurance policies early leading to substantial monetary losses for private households surrender can be explained rationally if it constitutes the last resort providing liquidity in the event of an urgent need of cash yet we find clear evidence in german panel data that for more than half of all surrendered contracts investors had cheaper options available to provide the required liquidity this finding demonstrates that there must be other factors influencing this important life decision we provide a behavioral explanation focusing on the role of individual decision heuristics financial literacy and financial advice in particular we show that financial literacy and financial advice can mitigate the behavioral temptation to lapse while the tendency to rely on heuristics increases lapse probability

optimal taxation prudence and risk sharing abstract this paper analyses optimal income taxation as a trade off between the incentive effects of increased uncertainty and the welfare benefits of social insurance greater prudence increases labour supply because of precautionary incentive effects which reduce the progressivity of the optimal income tax schedule increased uncertainty increases progressivity of the income tax schedule because of a greater value of social insurance optimal tax progressivity depends on the ratio of prudence to risk aversion when this ratio is high incentive effects dominate the social insurance effect leading to declining optimal income tax rates

most people need longevity insurance rather than an immediate annuity an immediate annuity is precisely the sum of two parts one is a deferred annuity commencing at a specified date with no death benefit before that date the remainder before the deferred annuity commences is a reverse whole life insurance policy with limited premiums that reverse policy is effectively one underwritten by the annuitant with the insurance company as beneficiary a policy that benefits few retirees however the deferred annuity called longevity insurance in the literature is a valuable component of a retirement portfolio that supplements components that focus on safety and growth

the annuity puzzle remains a puzzle abstract we examine incomplete annuity menus background risk bequest motives and default risk as possible drivers of divergence from full annuitization contrary to what is often suggested in the literature we find that full annuitization remains optimal if saving is possible after retirement this holds irrespective of whether real or only nominal annuities are available whenever liquidity is desired individuals save sizeable amounts out of their annuity income to smooth consumption shocks similarly adding equity linked annuities to the menu does not increase welfare significantly since individuals can invest in stocks in order to get the desired equity exposure

social interactions and habit formation in a model of female labour supply this paper investigates the influence of habit formation and preference interdependence on labour supply behaviour of married females a novelty of the paper is that we incorporate direct survey information on reference groups of individuals in a neoclassical labour supply model for that purpose we first estimate a latent variables model relating the direct information to the true but unobserved reference groups one of the most interesting features of the model is that the presence of young children becomes an insignificant factor in the hours equation while it remains a significant factor in the participation decision in addition the labour supply curve is much flatter in a model with habit formation and preference interdependence than in a model without it both habit formation and preference interdependence contribute significantly to the explanation of female labour supply 1998 elsevier science s a all rights reserved

dynamic portfolio choice with deferred annuities abstract we derive the optimal life cycle portfolio choice and consumption pattern for households facing uncertain labor income risky capital market and mortality risk in addition to stocks and bonds the households have access to deferred annuities deferred payout life annuities are financial contracts providing life long income to the annuitant after a specified period of time conditional on survival we find that deferred annuities play an important role in household portfolios and generate significant welfare gains households with high benefits from state pensions moderate risk aversion and moderate labor income risk purchase deferred annuities from age 40 and gradually increase their portfolio share at retirement deferred annuities account for 78 of total financial wealth households with low state pensions and high labor income risk purchase more annuities and earlier uncertainty with respect to future mortality rates has the same effect i e household hedge against longevity risks using deferred annuities

decomposition of aggregate energy intensity changes in two measures ratio and difference decomposition analysis has been popular in energy demand analysis and has been found useful in policy related studies past studies include decomposition of changes of an aggregate indicator measured in terms of either ratios or differences into several pre defined contributing factors aggregate indicators that are often studied include total national energy demand energy demand in specific consuming sectors aggregate energy intensity and energy related carbon dioxide emissions however the possible linkages between the ratio measure and the difference measure including their decomposition results have seldom been analysed this paper examines this issue using the divisia decomposition technique and a unique pair of decomposition formulae numerical examples based on singapore and taiwan industrial electricity demand data are presented

the social multiplier aggregate data is often used to make inferences about individual level behavior if there are social interactions in which one person s actions influence his neighbor s incentives or information then these inferences are inappropriate the presence of positive social interactions or strategic complementarities implies the existence of a social multiplier where aggregate relationships will overstate individual elasticities we present a brief model and then estimate the size of the social multiplier in three areas the impact of education on wages the impact of demographics on crime and group membership among dartmouth roommates in these contexts there is a significant social multiplier jel ho jo co

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

decomposition of carbon intensity in electricity production technological innovation and structural adjustment in china s power sector abstract china s power generation accounted for 24 of the world s total output ranking first in 2015 as a suitable performance indicator carbon intensity of electricity reflects a variation in the average level of carbon emissions per unit of electricity generated as the largest carbon emitter among various industries power sector is in duty bound to reduce carbon emissions and achieve sustainable development great progress has been made in china s power sector which is reflected by the effects of technological innovation and structural adjustment with logarithm transformation and integral transformation three dimensional decomposition model is proposed to quantitatively measure the changed carbon intensity of electricity due to technological innovation and structural adjustment in the context of three dimensional model the variation of carbon intensity can be decomposed into absolute changes and or relative changes furthermore accumulative decomposition results are obtained by chain linked calculation rules finally the proposed models are implemented in china s power industry to reveal its historical progress during 1980 2014 some important conclusions are also found based on the decomposition results

how much does sorting increase inequality some commentators argue that increased sorting into internally homogeneous neighborhoods schools and marriages is radically polarizing society calibration of a formal model however suggests that the steady state standard deviation of education would increase only 1 7 percent if the correlation between neighbors education doubled and would fall only 1 6 percent if educational sorting by neighborhood disappeared the steady state standard deviation of education would grow 1 percent if the correlation between spouses education increased from 0 6 to 0 8 in fact marital and neighborhood sorting have been stable or even decreasing historically sorting has somewhat more significant effects on intergenerational mobility than on inequality

do lottery payments induce savings behavior evidence from the lab this paper presents the results of a laboratory experiment designed to investigate whether the option of a prize linked savings pls product alters the likelihood that subjects choose to delay payment by comparing pls and standard savings products in a controlled way we nd strong evidence that a pls payment option leads to greater rates of payment deferral than does a straightforward interest payment option of the same expected value the appeal of the pls option is strongest among men and selfreported lottery players we use the results of our experiment to structurally estimate the parameters of the decision problem governing time preference risk aversion and probability weighting we employ the parameter estimates in a series of policy simulations that compare the relative eectiveness of pls products as compared to standard

analysis of thermal coal pricing and the coal price distortion in china from the perspective of market forces abstract the price of thermal coal has always been the focus of the debate between coal mining industry and electric power industry the thermal coal price is always lower than other same quality coal and this phenomenon of thermal coal price distortion has been existing in china for a long time the distortion coal price can not reflect the external cost and the resource scarcity of coal which could result in environment deteriorating and inefficient resource allocation this paper studied the phenomenon of thermal coal price distortion through economic theoretical modeling and empirical cointegration analysis from the perspective of market forces the results show that thermal coal price is determined by electricity price the prediction elasticity of a electricity enterprise price elasticity of demand of electricity the input prediction elasticity of a electricity enterprise and the price elasticity of supply of thermal coal the main reason of coal price distortion is the unbalance market force of coal industry and thermal coal generation industry the distortion rate of coal price is positively related to the market force of electric power industry and negatively related to the industrial concentration of coal industry

decreasing relative risk aversion and tests of risk sharing the relative risk aversion rra coefficient of a household whose consumption is close to the subsistence level may be very high for example if consumption is exactly at the subsistence level the household may not be willing to bear any risk if this is the case then the rra coefficient must be a decreasing function of wealth for poor households therefore we should allow the possibility of decreasing rra drra in testing the full risk sharing hypothesis however existing tests in the empirical literature are derived using preferences that exhibit either increasing or constant rra even when they are applied to data containing low income households we therefore use a hyperbolic absolute risk aversion hara utility which implies increasing constant and decreasing rra as special cases to test full risk sharing hypothesis using the international food policy research institute ifpri and the international crops research institute of the semi arid tropics icrisat household level data sets we find evidence in support of the drra hypothesis along with evidence favoring full risk sharing hypothesis at the village level and evidence against the hypothesis at the inter village level when rra is restricted to be constant we replicate the previous results in the literature reject the full risk sharing hypothesis at both levels our tests however reject this restriction and favor drra in almost all cases these results suggest that it is important to allow for drra in testing the full risk sharing hypothesis when data containing low income households are investigated this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this this abstract was borrowed from another version of this item

lmdi decomposition approach a guide for implementation since it was first used by researchers to analyze industrial electricity consumption in the early 1980s index decomposition analysis ida has been widely adopted in energy and emission studies lately its use as the analytical component of accounting frameworks for tracking economy wide energy efficiency trends has attracted considerable attention and interest among policy makers the last comprehensive literature review of ida was reported in 2000 which is some years back after giving an update and presenting the key trends in the last 15 years this study focuses on the implementation issues of the logarithmic mean divisia index lmdi decomposition methods in view of their dominance in ida in recent years eight lmdi models are presented and their origin decomposition formulae and strengths and weaknesses are summarized guidelines on the choice among these models are provided to assist users in implementation

the decomposition of co2 emissions from energy use in greece before and during the economic crisis and their decoupling from economic growth abstract greece recorded a significant decline in co 2 emissions from energy use from 2003 to 2013 accompanied by a reduction in energy consumption particularly during the economic recession this study attempts to identify the driving forces of co 2 emissions related to energy consumption through the use of the complete decomposition technique developed by jw sun the decomposition analysis focuses on the four factors responsible for co 2 emissions the carbon intensity effect the energy intensity effect the structural effect and the economic activity effect the analysis covers all the major productive sectors of the greek economy the study covers the period 2003 2013 and is divided into two subperiods 2003 2008 and 2008 2013 in order to assess changes in the contribution of the examined factors during the economic crisis 2008 2013 the analysis is extended to examine the decoupling relationship between co 2 emissions and economic growth in greece with the use of the decoupling index

looking after number two competition cooperation and workplace interaction abstract we look for cooperation in a real world setting in which optometrists absent less frequently in two chair than one chair offices because of the externality such behavior imposes on their co worker we motivate our empirical analysis by developing a model of worker interdependence in which two workers can either compete or cooperate we show that relative to a single worker working in isolation competition unequivocally increases absence whilst cooperation may increase or decrease absence our empirical analysis of a unique data set finds explicit support for cooperative behavior

carbon intensity of electricity in asean drivers performance and outlook abstract the association of southeast asian nations asean with its ten member countries has a total population exceeding 600 million its energy related co2 emissions have been growing and in 2013 amounted to 3 6 of total global emissions about 40 of asean s energy related co2 emissions are currently attributable to electricity production in view of this high share we study the co2 emissions of asean s electricity production sector with a focus on the aggregate emission intensity aci given by the level of co2 emissions for each unit of electricity produced drivers of aci are analysed for individual countries and spatial analysis is conducted by comparing factors contributing to differences between the acis of individual countries and that of the asean average arising from these analyses and in light of the current developments it is concluded that drastic actions need to be taken both at the national and regional levels in order to reduce growth in the region s electricity related co2 emissions two key policy issues namely overcoming national circumstances to improve electricity generation mix and improving power generation efficiency are further discussed

the impact of policy consistency on technological competitiveness a study on oecd countries abstract this study investigates the impact of policy consistency on technological competitiveness using patent citation analysis policy support plays a key role in promoting firms investment in research and development r d activities especially in emerging sectors policy consistency increases technological competitiveness since it encourages firms to invest in r d activities although previous studies argue policy design and characteristics few deal with policy consistency and they lack a quantitative measure of policy consistency and explanation of its effects therefore this study proposes the quantitative indexes for policy consistency and potential technological competitiveness the indexes are applied to the case of renewable energy sector since energy sector is highly dependent on the government policy and thus needs high policy consistency the result shows that renewable energy technology development is affected by policy and the higher the policy consistency especially in emerging sectors it also shows that countries of high policy consistency tend to achieve higher technological competitiveness and thus are likely to secure higher technological competitiveness in the future the findings of this study can be used in designing policy for sustainable technological competitiveness and will be a corner stone for researches on assessing policy consistency

the personal discount rate evidence from military downsizing programs the military drawdown program of the early 1990s provides an opportunity to obtain estimates of personal discount rates based on large numbers of people making real choices involving large sums the program offered over 65 000 separatees the choice between an annuity and a lump sum payment despite break even discount rates exceeding 17 percent most of the separatees selected the lump sum saving taxpayers 1 7 billion in separation costs estimates of discount rates range from 0 to over 30 percent and vary with education age race sex number of dependents ability test score and the size of payment

heterogeneity stratification and growth macroeconomic implications of community structure and school finance this paper examines how socioeconomic stratification and alternative systems of education finance affect inequality and growth agents interact through local public goods or externalities school funding neighborhood effects and economywide linkages complementary skills knowledge spillovers sorting families into homogeneous communities often minimizes the costs of existing heterogeneity but mixing reduces heterogeneity faster integration therefore tends to slow down growth in the short run yet raise it in the long run a move to state funding of education presents society with a similar intertemporal trade off local and global complementarities play major roles in determining the efficient social and educational structures copyright 1996 by american economic association

dynamic scoring a back of the envelope guide abstract this paper uses the neoclassical growth model to examine the extent to which a tax cut pays for itself through higher economic growth the model yields simple expressions for the steady state feedback effect of a tax cut the feedback is surprisingly large for standard parameter values half of a capital tax cut is self financing the paper considers various generalizations of the basic model including elastic labor supply general production technologies departures from infinite horizons and non neoclassical production settings it also examines how the steady state results are modified when one considers the transition path to the steady state