Economic Inquiry最新文献

Many pension schemes offer annuities pooling mortality risk across members. Such pooling has been criticized for having a regressive bias benefitting risk classes with the longest expected longevity. However, knowledge on mortality risk unfolds over the life-course, and it is optimal for risk averse households to annuitize all old-age consumption already as young buying pooled contracts, even if fair annuities are available later in life or risk class is private information. Borrowing constraints impair such frontloading but are lessened by a mandated pooled annuity targeting the middle-aged, improving welfare for all risk classes and the first-best allocation may be implementable.

We study the Tullock contest model with loss aversion and endogenously formed reference points. In a contest with n possibly heterogeneous players and convex effort costs, we establish sufficient conditions for a unique Nash equilibrium in pure strategies. Subsequently, we analyze the impact of loss aversion on players' spending behavior, probability of winning, and rent dissipation.

We study the impact of framing on leading-by-example. Our 2 × 2 design consists of group level frames (Wall Street vs. Community) and individual level frames (First/Second Movers vs. Leader/Followers). We report on two studies where we elicit participants' beliefs allowing us to evaluate whether framing effects are driven by beliefs or preferences. Across both studies, average contributions are significantly lower in the Community—First Mover frame. This is primarily because leaders contribute less, pulling down followers' contributions. We find that contributions are strongly related to first order and second order beliefs but framing effects remain once we control for beliefs.

This study investigates the impact of activity-based funding (ABF) on the performance of hospitals by exploiting a natural experiment that happened in the state of Queensland, Australia. To examine the outcome of the reform, the performance of hospitals is measured by the technical efficiency estimated from data envelopment analysis (DEA) models. We try to identify the causal effect of ABF on the technical efficiency of hospitals by incorporating difference-in-differences approach in the popular two-stage DEA framework. We find empirical evidence that ABF improves the technical efficiency of hospitals.

This paper investigates the accumulation and distribution of retirement wealth in a dynastic model with earnings risks, longevity uncertainties, and borrowing constraints. It resolves the wealth indeterminacy problem across generations in dynastic families by introducing a transaction cost for intergenerational transfers. It captures the pattern of inter vivos transfers, the relationship between wealth and earnings, and wealth inequality in the US data. Social security lowers precautionary savings by redistributing income from families with high earnings or short-lived parents to others, thus reducing investment, the growth rate in income per capita, inequality in retirees' consumption, and the wealth-earnings correlation.

Central banks set the nominal interest rate to target inflation and stabilize output. In monetary models, monetary policy affects output directly via the wealth effect. I show that in these models, the response of the central bank to fluctuations in output may induce real indeterminacy even if the Taylor principle is satisfied. I find that the determinacy conditions depend on the interest elasticity of output and generally, the Taylor principle is neither necessary nor sufficient for determinacy. This is in stark contrast with the New Keynesian model where a sufficiently strong policy response to inflation or output usually ensures determinacy.

When social pressure leads to favoritism, policies might aim to reduce the bias by affecting its source. This paper shows that multiple sources may be present and telling them apart is important. We build a novel and granular dataset on European football games and revisit the view that supporting crowds make referees help the host team. We find this bias to remain unchanged even in stadiums closed due to Covid-19. Instead, influential host organizations emerge as the source of social pressure. This has an adverse effect on maintaining the ranking of influential teams and hindering the progress of smaller teams.

Climate change, political turmoil, and economic instability worldwide suggest that managing migration surges will be a permanent challenge for many economies. In response to the record arrival of unaccompanied migrant children at the southern border, the Biden administration used surge facilities to expedite the processing of children. We assess the effectiveness of this strategy and document reductions in the time children spent under government custody. A counterfactual analysis reveals that, in their absence, the average time to reunification would have risen from 37 to 50 days. Migration surges involving unaccompanied children underscore the urgency of identifying efficient and humanitarian strategies.