Exchange and refund of complementary products

A common dilemma a consumer faces during product return pertains to the decision of exchanging the product or obtaining a refund. This issue becomes even more salient for durable goods, when the initial purchase involves complementary products from different categories. This research examines consumer’s trade-off decision between returning and keeping complementary products by exploring various retail actions (using umbrella branded products (UBP)) and customer characteristics. We also investigate the trade-off between product exchange and refund when consumer returns a product. We find interesting extensions to past research wherein UBP are returned less and result in greater exchange than refund. Furthermore, an interesting caveat is that higher degree of complementarity between UBP intensifies the impact of various factors on exchange as opposed to refund of products. Implications for retail managers and sales teams are explored.     

Übernivellierung der Einnahmen aus der Grunderwerbsteuer im künftigen Finanzausgleich

Fiscal Equalisation in Germany provides substantial fiscal redistribution between federal and state and among state governments. However, there is also a degree of tax autonomy for the individual German states. Since 2007, states can adjust their local rate of the Real Estate Transfer Tax. However, if they keep the rate low, they may suffer revenue losses due to fiscal redistribution. The paper considers whether this effect will also be present in the new rules for fiscal equalization which will come in to effect in 2020.     

Kalte Progression wird nach Einführung der Schuldenbremse ein zunehmendes Problem

As taxpayers typically pay relatively little attention to low levels of inflation induced income tax bracket creep, policy makers tend to regularly postpone correction of this problem. Eventually, however, the fiscal illusion fades away, and political pressure for tax relief arises once the cumulative increase of the average tax rate exceeds a critical threshold. Using Germany as an example, it is shown that bracket creep can provoke revenue cycles in public budgets that hinder governments’ compliance with the numerical budget rules. An indexation of the tax tariff, which would provide an automatic correction for bracket creep, could prevent such fluctuations and thus provide a favourable framework for the debt brake.     

Happiness,income and poverty

There is considerable evidence from a variety of sources to suggest that well-being is a function of relative income. These findings have been used to explain the Easterlin Paradox, whereby a rise in income for all does not lead to a rise in average happiness in a country (even though the cross section relationship between income and happiness is positive). This relativity of utility has led to calls for policy to focus away from GDP. I here first discuss some of the evidence that well-being is indeed relative in income, but then consider two relatively little-analysed issues to suggest that there may continue to be a role for GDP per capita in happiness-based policy: the inequality of subjective well-being, and the specific case of those in income poverty.     

Do political connections affect stock price crash risk? Firm-level evidence from China

Using a sample of Chinese listed firms in the period from 2003 to 2012, this paper empirically investigates how the presence of politically connected directors affects stock price crash risk. We thereby make a distinction between listed state-controlled firms and privately controlled firms due to their different incentives to appoint politicians as directors on the board. Our empirical results show that politically connected directors exacerbate stock price crash risk in listed state-controlled firms, an effect driven by the appointment of local government officials as directors. In contrast, hiring politicians as directors, particularly central-government-affiliated directors, helps listed privately controlled firms to reduce stock price crash risk. Finally, good quality of institutions does not help to alleviate the positive relationship between political connections and stock price crash risk in listed state-controlled firms. However, it does weaken the role of political connections in reducing crash risk in listed privately controlled firms.     

Analyse der Abwicklung von gesetzlichen Krankenkassen per sozialrechtlicher Schließung oder per Insolvenzverfahren

Private as well as statutory health insurers have various ways of insolvency. Although the Insolvency Act has been applied for statutory health insurance since 2010, these new options were not used up to now. Anyway, the legislators laid the preference out of closure. This article investigates how the priority of closure could be in contradiction to the applicability of the Insolvency Act. It is asked, whether the introduction of the insolvency capability of health insurance funds was rather to assimilate the frame conditions relating to pension promises than creating a real alternative. One reason could be, that the Insolvency Act is not only generally applicable in the liquidation of a health insurance fund, but potentially even the best alternative. The insolvency proceedings for example are advantageous for health insurance funds within the same group because the maximum load is split and lower than it would be by a closure by social law and in addition to that the PSV is obligatory. The results show, that the generally-accepted, not limited standard preference of closure as laid out by the legislators in § 171b (3) S. 2 SGB V, seems inexplicable. The paper draws parallels to private health insurance companies under Solvency II and opens up new perspectives for legislative measures.     

Long waves in prices: new evidence from wavelet analysis

In this paper we apply wavelet analysis to study the dynamics of long-term movements in wholesale prices for the USA, the UK and France over the period 1791–2012. The application of wavelet analysis to long-term historical price series allows us to detect long waves in prices whose periodization is remarkably similar to those provided in the literature for the pre-World War II period. Moreover, we find evidence on the existence of long waves in prices also after World War II, a period in which long waves are generally difficult to detect because of the positive trend displayed by prices. The comparison between the long wave components extracted through wavelets and the Christiano–Fitzgerald band-pass filter suggests that wavelets provide a reliable and straightforward technique for analyzing long waves dynamics in time series exhibiting quite complex patterns such as historical data.     

Super returns to Super Bowl ads?

This paper uses a natural experiment—the Super Bowl—to study the causal effect of advertising on demand for movies. Identification of the causal effect rests on two points: 1) Super Bowl ads are purchased before advertisers know which teams will play; 2) home cities of the teams that are playing will have proportionally more viewers than viewers in other cities. We find that the movies in our sample experience on average incremental opening weekend ticket sales of about $8.4 million from a $3 million Super Bowl advertisement.