Rental prices in Germany: A comparison between migrants and natives

This paper deals with the question of whether migrants pay a rent premium for apartments of comparable quality and neighborhood characteristics. We use a two-step selection-correction model augmented by a control function to account for nonrandom neighborhood choice. The estimation sample is a uniquely assembled panel comprising the Socio-Economic Panel (SOEP), information on household and apartment characteristics, as well as georeferenced data describing neighborhood quality. Our estimates reveal that people with migration backgrounds are not penalized in the German local rental market in terms of higher rental payments.     

The motives of off-the-books entrepreneurs: necessity- or opportunity-driven?

In recent years, it has become common to represent entrepreneurs as either necessity- or opportunity-driven. Drawing upon face-to-face interviews in England with 70 entrepreneurs trading wholly or partially off-the-books, this paper evaluates critically this dichotomous representation. The finding is that squeezing the motives of off-the-books entrepreneurs into one side or the other of this dichotomy not only over-simplifies their rationales since both necessity and opportunity motives are often involved but also obfuscates how their motives change over time. The outcome is a call to replace this either/or depiction with a richer and more nuanced both/and understanding of off-the-books entrepreneurs that recognises their diverse and dynamic motives.

Empirical Effects of Performance Contracts: Evidence From China

Performance contracts (PCs)—contracts signed between thegovernment and state enterprise managers—have been usedwidely in developing countries. China's experience with suchcontracts was one of the largest experiments with contractingin the public sector, affecting hundreds of thousands of statefirms, and offered a rare opportunity to explore how PCs work.On average, PCs did not improve performance and may have madeit worse. But China's PCs were not uniformly bad; in fact, PCsimproved productivity in slightly more than half of the participants.PC effects were on average negative because of the large lossesassociated with poorly designed PCs. Successful PCs were thosethat featured sensible targets, stronger incentives, longerterms, managerial bonds, and were in more competitive industries.Selecting managers through bidding was not associated with performanceimprovement. Good PC features were more often observed in state-ownedenterprises (SOEs) under the oversight of local governments,that faced more competition, that were smaller in size, andthat had better previous performance.     

Simple Procedures for Testing Autoregressive Versus Moving Average Errors in Regression Models

This paper develops several simple separate (or non-nested) procedures for testing autoregressive versus moving average errors in regression models. These asymptotically valid tests are straightforward to calculate: after estimating both models by maximum likelihood methods, the procedure involves testing the significance of variables added to a linearized version of the null model, the added variables being the predictions, or the residuals from the specified alternative model, or the difference of the predictions of the two models. Some small sample evidence on the properties of the tests is presented, as is an empirical application on the Australian unexpected inflation rate series.
JEL Classification Numbers: C12, C22, C52, E31.