Energy efficiency and household behavior: the rebound effect in the residential sector

This article investigates the rebound effect in residential heating, using a sample of 563,000 households in the Netherlands. Using instrumental variable and fixed‐effects approaches, we address potential endogeneity concerns. The results show a rebound effect of 26.7% among homeowners, and 41.3% among tenants. We corroborate the findings through a quasiexperimental analysis, using a large retrofit subsidy program. We also document significant heterogeneity in the rebound effect, determined by household wealth and income, and the actual energy use intensity. The findings in this article confirm the important role of household behavior in determining the outcomes of energy efficiency improvement programs.     

Economic globalization and the change of electoral rules

This paper takes up an argument from Ronald Rogowski about the “natural affinity” between trade and an electoral system with proportional representation. We draw on literature on the historical determinants of electoral system choice to advance the general argument that trade integration and PR are related because the adoption of PR helps to secure gains from trade. Our specific model of electoral rule changes in the age of globalization predicts that the likelihood of electoral rule change towards more proportionality increases with levels of trade integration in the world economy. The theoretical model draws on a micro model of the distributive effects of increased economic integration. Because more proportional systems are more credibly able to commit to compensate the losers of globalization processes, there will be increased demand to change the electoral system towards more proportionality under economic circumstances that increase the costs of maintaining a closed economy. In accordance with our model, our empirical tests find a positive association between (a) trade integration and the proportionality of the electoral system, (b) proportionality and social spending, and (c) global integration levels and the probability of electoral rules changes that render voting rules more proportional.     

Adaptation and inertia in dynamic environments

Research summary : We address conflicting claims and mixed empirical findings about adaptation as a response to increased environmental dynamism. We disentangle distinct dimensions of environmental dynamism—the direction, magnitude, and frequency of change—and identify how selection shapes adaptive responses to these dimensions. Our results show how frequent directional changes undermine the value of exploration and decisively shift performance advantages to inert organizations that restrict exploration. In contrast, increased environmental variance rewards exploration. Our results also show that, in dynamic environments, the best‐performing organizations are generally more inert than less successful organizations. Managerial summary : Our research helps managers to understand under what business conditions investments into exploration and strategic flexibility are more likely to pay off. Dynamic business environments characterized by persistent trends and by large, infrequently occurring structural shocks reward strategic pursuit of temporary advantage. Thus, exploration and strategic flexibility are preferred strategies. In contrast, the challenge in frequently changing environments with fleeting opportunities is to identify and to focus on strategic actions whose payoffs on average are high, independent of environmental volatility. Low levels of exploration and long‐term strategic focus are preferred strategies in these circumstances. Copyright © 2015 John Wiley & Sons, Ltd.     

Employment Protection Reform,Enforcement in Collective Agreements and Worker Flows

We analyze a reform of notice periods for employer‐initiated separations in Sweden, which reduced the notice periods for newly hired older workers substantially but implied minor or no changes in the advance notices for younger workers. The reform was initiated at different times depending on collective agreement. These circumstances provide ample opportunity for the identification of its effects. Our findings indicate heterogeneous effects on hirings and separations across collective agreements.     

How strong is the macroeconomic case for downward real wage rigidity?

We explore the existence of downward real wage rigidity (DRWR) at the industry level, based on data from 19 OECD countries for the period 1973-1999. The results show that DRWR compresses the distributions of industry wage changes overall, as well as for specific geographical regions and time periods, but there are not many real wage cuts that are prevented. More important, however, DRWR attenuates larger real wage cuts, thus leading to higher real wages. There is stronger evidence for downward nominal wage rigidity than for DRWR. Real wage cuts are less prevalent in countries with strict employment protection legislation and high union density.     

Keeping up with the Vaishyas? Caste and relative standing in India

People care about relative, and not only absolute, income. Thispaper investigates the importance of relative income withinand between castes in the Indian caste system, using a choiceexperimental approach. The results indicate that slightly morethan half of the marginal utility of income comes from somekind of relative income effects, on average. This is comparableto the results from previous studies in other countries. Belongingto a low caste and having a low family income are associatedwith higher concern for relative income. Moreover, an increasein the mean income of the caste to which the individual belongs,everything else held constant, reduces utility for the individual.Thus, the negative welfare effect of having a reduced relativeincome compared to the own caste average income dominates thepositive welfare effect due to increased relative income ofthe own caste compared to the income of other castes.     

Categorizing risks in seven large projects—Which risks do the projects focus on?

In a hierarchy of project objectives, strategic objectives will often be principally different from the operational ones. Operational objectives concern the project outputs/results, and strategic objectives concern the project goal and purpose. In this study, risks are categorized as risks to operational, long‐term, or short‐term strategic objectives, and, by studying a dataset of some 1,450 risk elements that make up the risk registers of seven large projects, we examine how operational and strategic risks are distributed in the projects. The study strongly indicates that risks to a project's strategic objectives rarely occur in the project's risk registers, though project success and failure stories indicate their importance.     

FOREIGN NETWORKS AND EXPORTS: RESULTS FROM INDONESIAN PANEL DATA

Most firms and plants in developing countries produce only for the domestic market and few are able to export. One plausible hypothesis is that foreign networks decrease export costs and that plants with large amounts of such networks will be relatively likely to start exporting. We focus on two types of foreign networks: foreign ownership and imports of intermediate products. Our results suggest that plants in Indonesian manufacturing with any foreign ownership are substantially more likely to start exporting than wholly domestically owned plants. The results remain robust to alternative model specifications and after controlling for other plant characteristics. There is no effect on exports of imports of intermediate products.     

ISLAMISTIC TERROR AND THE LABOUR MARKET PROSPECTS OF ARAB MEN IN ENGLAND: DOES A COUNTRY'S DIRECT INVOLVEMENT MATTER?

This paper considers two questions on the labour market discrimination against Arab or Muslim men after the recent terrorist attacks. First, I consider for the first time the impact of the September 11 attacks on the wages and working hours of Arabs in Europe. Second, I test whether the fact that a country was the direct target of terrorist attacks influences discrimination using the Madrid train bombings on 11 March 2004 and the London bombings on 7 July 2005 as quasi‐experimental events. The results indicate that the wages, hours worked and employment probabilities of Arab men were unchanged by the attacks.