Social security and retirement incentives in Austria

This paper provides an overview of the interaction between social security and retirement behavior in Austria in the decades up to the on-going reform process. The key question is, how much of the retirement behavior can be attributed to incentive effects of the pension system. We describe the labor market and retirement behavior of the elderly in Austria, survey the key features of the public pension system and finally present the results of a series of simulations aimed at assessing the retirement incentives generated by the pension system. We compute levels and accrual rates of social security wealth and implicit tax rates on continued work according to the method portrayed in Gruber and Wise [Gruber J, Wise D (1999) Social security and retirement around the world. University of Chicago Press, Chicago London]. To some extent, the sharp drop in labor force participation among the elderly must be attributed to major disincentives of the Austrian pension system; the system turns out to provide significant incentives to retire early. Past reforms have reduced the disincentives. Our results, however, show the need to further reform the public pension scheme and to reorient it stronger towards the principle of actuarial fairness.     

To divide or not to divide? The impact of partitioned pricing on the informational and sacrifice effects of price

Firms often partition a product??s price into two mandatory parts (e.g., the base price of a mail-order DVD and the surcharge for shipping and handling) instead of charging one all-inclusive price. This study examines whether and to what extent partitioned pricing (compared to one all-inclusive price) influences the informational and sacrifice effects of price. We empirically show that partitioned pricing oppositely affects these two distinct roles of price: the informational effect of price (i.e., price as an indicator of quality) increases, while the sacrifice effect (i.e., price as a measure of sacrifice) becomes more negative. In product categories with substantial price?Cquality inferences, the positive impact of partitioned pricing on the informational effect can overcompensate for its negative impact on the sacrifice effect, making partitioned prices the preferable strategy.     

The influence of external reference price strategies in a nonprofit arts organization's “pay‐what‐you‐want” setting

Nonprofit arts organizations face conflicting objectives to balance—or more specifically, to create—artistic and educational value and to generate financial income from various sources. Pay‐what‐you‐want (PWYW), a participative pricing mechanism where services have no fixed price and customers actively decide what to pay, is a novel pricing mechanism and is of high interest for organizations and researchers alike. Based on the concepts of loss aversion and gain, this study presents a field experiment to test the effects of different PWYW pricing strategies on the amount of money paid by visitors of a German photo biennial. Explicitly, the provisions of minimum, maximum, and suggested external reference prices are compared to a setting with no external reference prices. We test the derived hypotheses, discuss the results, and provide implications for future research, as well as for the management of nonprofit arts organizations.     

Why Are Mothers Working Longer Hours in Austria than in Germany? A Comparative Microsimulation Analysis*

Labour force participation rates of mothers in Austria and Germany are similar; however, full‐time employment rates are much higher among Austrian mothers. In order to find out to what extent these differences can be attributed to differences in the tax‐transfer system, we perform a comparative microsimulation exercise. After estimating structural labour supply models for both countries, we interchange two important institutional characteristics of the two countries ‐ namely, (i) the definition of the tax unit within the personal income tax and (ii) the parental leave benefit scheme. As our analysis shows, differences in mothers’employment patterns can partly be explained by the different tax systems: while Germany has a system of joint taxation with income splitting for married couples, Austria taxes everyone individually, which leads to lower marginal tax rates for secondary earners than in the German system.     

Surrogate modelling of a detailed farm-level model using deep learning

Technological change co-determines agri-environmental performance and farm structural transformation. Meaningful impact assessment of related policies can be derived from farm-level models that are rich in technology details and environmental indicators, integrated with agent-based models capturing dynamic farm interaction. However, such integration faces considerable challenges affecting model development, debugging and computational demands in application. Surrogate modelling using deep learning techniques can facilitate such integration for simulations with broad regional coverage. We develop surrogates of the farm model FarmDyn using different architectures of neural networks. Our specifically designed evaluation metrics allow practitioners to assess trade-offs among model fit, inference time and data requirements. All tested neural networks achieve a high fit but differ substantially in inference time. The Multilayer Perceptron shows almost top performance in all criteria but saves strongly on inference time compared to a Bi-directional Long Short Term Memory.     

How far is how far enough? Safety perception and acceptance of extra-high-voltage power lines in Germany

The results of a 2?×?2 factorial online experiment are reported. The first factor refers to the information on precautionary measures and the second factor on the information regarding the share of EMF exposure from extra-high-voltage power lines compared to overall EMF exposure measured in-house. The study is based on a community sample of 440 subjects. Information on the share of EMF exposure from extra-high-voltage power lines at the in-house overall EMF exposure has no statistically significant effect of safety distances and acceptance distances. Further findings indicate that communications of precautionary measures produce a countervailing effect: on average, subjects require a higher distance from their homes compared to those who were not informed about precautionary measures. However, there is also a positive effect of precautionary information on the acceptance belief. Subjects who received this information are, in average, less negative about the claim that compliance with the value limit is sufficient in order to agree with the construction of a power line. Possible explanations of the findings such as cognitive dissonance, negativity bias, and style of information processing are discussed.     

Liquidity risk in derivatives valuation: an improved credit proxy method

The models used to calculate post-crisis valuation adjustments, market risk and capital measures for derivatives are subject to liquidity risk due to severe lack of available information to obtain market implied model parameters. The European Banking Authority has proposed an intersection methodology to calculate a proxy CDS or Bond spread. Due to practical issues of this method, Chourdakis et al. introduce a cross-section approach. In this paper, we extend the cross-section methodology using equity returns, and show that our methodology is significantly more accurate compared to both existing methodologies, and produces more reliable, stable and robust market risk and capital measures, and credit valuation adjustment.     

Farmers at the heart of the ‘human capital revolution’? Decomposing the numeracy increase in early modern Europe†

Did the early development of skills and numerical abilities occur primarily in urban centres and among the elite groups of society? This study assesses the human capital of different occupational groups in the early modern period and partially confirms this finding: skilled and professional groups had higher levels of numeracy and literacy than persons in unskilled occupations. However, there was another large group that developed substantial human capital and represented around one‐third of the total population: farmers. By analysing numeracy and literacy evidence from six countries in Europe and Latin America, we argue that farmers contributed significantly to the formation of human capital and, consequently, to modern economic growth.