CER-ETH Research Seminar, Fall Term 2013

Main content

The CER-ETH Research Seminar takes place on Mondays during term time from 5:15 pm to 6:45 pm at ETH Zurich, Room ZUE G1 (Zürichbergstr. 18). Per term we invite 6 to 7 internationally known speakers to present and discuss their work.

Programme

Date
Speaker Title
October 21, 2013 Monika Bütler
Uni. St Gallen  
Financial work incentives for disability benefit recipients: Lessons from a randomized field experiment
Abstract
October 28, 2013 Johannes Spinnewijn
London School of Economics  
Production vs Revenue Efficiency With Limited Tax Capacity: Theory and Evidence From Pakistan
Abstract
November 4, 2013   John Quah
Oxford University
A test for weakly separable preferences
Abstract
November 11, 2013   David Hemous
INSEAD  
Environmental Policy and Directed Technical Change in a Global Economy: The Dynamic Impact of Unilateral Environmental Policies
Abstract
November 18, 2013   Bard Harstad
University of Oslo
Market for Conservation and Other Hostages
Abstract
December 2, 2013   Silvia Galli
Uni. St Gallen  
Sequential R&D and Blocking Patents in the Dynamics of Growth
Abstract
December 16, 2013   Gilles St-Paul
Toulouse School of Economics  
Bobos in Paradise: Urban Politics and the New Economy
Abstract

Speakers

Monika Bütler

The high implicit taxation of employment income (i.e. disabled lose benefits if labor incomes exceed a certain threshold) is considered one of the prime reasons for the low outflow from disability insurance. This paper presents the short-term results of a conditional cash program that financially incentivizes work related reduction of disability benefits. A randomized group of disability insurance beneficiaries receive the offer to claim a payment (“seed capital”) of up to CHF 72,000 (USD 71,000) if they take up or expand employment and reduce disability insurance claims. Despite the large financial incentive, the results show that interest in taking-up the financial incentive is low at only 3%. This finding is consistent with the literature from other settings: financial incentives – even if they directly incentivize outflow and are rather generous – tend to be ineffective in stimulating outflow from the disability insurance.

Full Paper (PDF, 436 KB)

Johannes Spinnewijn

This paper analyzes the design of tax systems under imperfect enforcement. A common
policy in developing countries is to impose minimum tax schemes whereby firms are taxed either on profits or on turnover, depending on which tax liability is larger. This production inefficient tax policy has been motivated by the idea that the broader turnover tax base is harder to evade. Minimum tax schemes give rise to a kink point in firms’ choice sets as the tax rate and tax base jump discontinuously when one tax liability surpasses the other. Using administrative tax records on corporations in Pakistan, we find large bunching around the minimum tax kink. We show that the combined tax rate and tax base change at the kink provides small real incentives for bunching, making the policy ideal for eliciting evasion. We develop an empirical approach allowing us to put (tight) bounds on the evasion response to switches between profit and turnover taxation, and find that turnover taxes reduce evasion by up to 60-70% of corporate income. Our analysis sheds new light on the use of production-inefficient tax tools in countries with limited tax capacity and can easily be replicated in other contexts as the quasi-experimental variation needed is ubiquitous.

Full Paper (PDF, 937 KB)

John Quah

We identify necessary and sucient conditions under which a nite data
set of price vectors and consumption bundles can be rationalized by a weakly separable
utility function. Our result could be understood as a generalization of Afriat's Theorem

Full Paper (PDF, 643 KB)

David Hemous

This paper builds a two-country (North, South), two-sector (polluting, nonpolluting) trade
model with directed technical change, examining whether unilateral environmental policies
can ensure sustainable growth. The polluting good is produced with a clean and a dirty
input. I show that a temporary Northern policy combining clean research subsidies and a
trade tax can ensure sustainable growth but Northern carbon taxes alone cannot. Trade and
directed technical change accelerate environmental degradation either under laissez-faire or if
the North implements carbon taxes, yet both help reduce environmental degradation under
the appropriate unilateral policy. I characterize the optimal unilateral policy analytically and
numerically using calibrated simulations.

Full Paper (PDF, 432 KB)

Bard Harstad

A “conservation good” (such as a tropical forest) is owned by a seller who is tempted
to consume (or cut), but a buyer benefits more from conservation. The seller does
conserve if the buyer is expected to buy, but the buyer is unwilling to pay as long
as the seller conserves. This contradiction implies that the market for conservation
cannot be efficient and conservation is likely to fail. A leasing market is inefficient
for similar reasons and dominates the sales market if and only if the conservation
value is low, the consumption value high, and the buyer’s protection cost large. The
theory explains why optimal conservation often fails and why conservation abroad
is leased, while domestic conservation is bought.

Full Paper (PDF, 449 KB)

Silvia Galli

The incentives to conduct basic or applied research play a cen tral role for economic growth. How does increasing early innovation appropriability a¤ect basic research, applied research, innovation and growth? In a common law system an explicitly dynamic macroeco-
nomic analysis is appropriate. This paper analyzes the macroeconomic e¤ects of patent protec-
tion by incorporating a two-stage cumulative innovation structure into a quality-ladder growth model with endogenous skill acquisition. We focus on two issues: (a) the over-protection vs. the under-protection of intellectual property rights in basic research; (b) the evolution of
jurisprudence shaping the bargaining power of the upstream innovators. We show that the dynamic general equilibrium interactions may seriously mislead the empirical assessment of the growth e¤ects of IPR policy: stronger protection of upstream innovation always looks bad
in the short- and possibly medium-run. We also provide a simple "rule of thumb" indicator of the basic researcher bargaining power.

Full Paper (PDF, 590 KB)

Gilles St-Paul

Abstract not available

Presentation Slides (PDF, 141 KB)

 
 
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