Subjective Well-Being Around Retirement

This paper studies the effect of both retirement and unemployment on life satisfaction, using subjective satisfaction indicators from the German Socio-Economic Panel. Moreover, we analyze how accurate individuals anticipate changes in satisfaction around retirement, as well as the correlation between the forecast error in life satisfaction and the labor market status. Being unemployed has a significant negative effect on life satisfaction; (in)voluntary retirement on the other hand has no significant effect on life satisfaction. A new finding is that unemployed individuals underestimate future life satisfaction. That is, their current labor market status has temporary negative effects on well-being, but, after 5 years, individuals are happier with their life than previously anticipated. We find no effects of (in)voluntary retirement on the forecast error.     

Shared ownership and pricing in a network switch

We observe that many wholesale switches in automated teller machine (ATM) networks are jointly owned by their members and that this tends to occur more frequently when the wholesale industry is highly concentrated. We also observe that network switches are ‘natural monopolies’, their costs being largely fixed and their demand exhibiting substantial network externalities. Motivated by these observations, we model the competition for members between wholesale switches and the role joint ownership can play in attracting members. The model analyzes both the adoption decision (which network a bank chooses to join) and the subsequent pricing of switch and ATM services. We compare competition between two solely owned switches with competition between one solely owned and one jointly owned switch. Our analysis shows that a more concentrated structure results under the latter and that retail prices are higher. This calls into question the leniency of antitrust policy toward jointly owned structures.     

Broadcasting,Attendance and the Inefficiency of Cartels

The English Premier League is a cartel of soccer teams that collectively sells the rights to broadcast its matches. Despite considerable demand for their product from broadcasters, the clubs agreed to sell only a small fraction of the broadcast rights (60 out of 380 matches played each season between 1992 and 2001). The clubs have explained this reluctance by claiming that increased broadcasting would reduce attendance at matches and therefore reduce cartel income. However, this paper produces detailed econometric evidence to show that broadcasting has a negligible effect on attendance and that additional broadcast fees would be likely to exceed any plausible opportunity cost. The paper concludes that a more likely explanation for the reluctance to market their rights is the failure of the cartel to reach agreement on compensation for individual teams.     

INCOME AND WEALTH OVER THE LIFE CYCLE EVIDENCE FROM PANEL DATA

In this paper we examine household wealth and income in the Netherlands using data from the Socio Economic Panel (SEP) in the period 1987–89. We provide an evaluation of the quality of the data and some simple statistics which describe the behavior of wealth, saving, and income over the life cycle. We find there is substantial heterogeneity in the behavior of households, and wealth holdings vary substantially even among the same age group. By exploiting the panel feature of the SEP, we derive saving from first differencing wealth. We find that a sizeable fraction of households do not dissave when old and we find some evidence in favor of the bequest motive.     

German stock market dynamics

This article estimates generalized ARCH (GARCH) models for German stock market indices returns, using weekly and monthly data, various GARCH specifications and (non)normal error densities, and a variety of diagnostic checks. German stock return series exhibit significant levels of second-order dependence. Our results clearly demonstrate that for both weekly as well as monthly return series the Student-t distribution is superior to the standard normal distribution. In particular, the estimated GARCH-t models appear to be reasonably successful in accounting for both observed leptokurtosis and conditional heteroskedasticity from German stock return movements.     

Modifying the RPI-X Regulatory System to Include Profit-sharing

This paper aims to contribute to the economic theory of RPI-X (price-cap) regulatory systems which include profit-sharing between a company and its customers. The particular focus is on whether profit-sharing can be introduced in an investment-neutral manner, and on whether there is scope to choose a profit-sharing system which maximises the expected customer rebate. Using a model of a company choosing optimal capacity in the face of uncertain demand and subject to price-cap regulation, it is shown that the potential exists for profit-sharing to be investment-neutral, and it is suggested that the expected customer rebate is maximised for an investment-neutral system which is effectively a cap on profits at a specified level.     

An Assessment of the Impact of Implementing the European Commission's Agenda 2000 Cereal Proposals for Specialist Wheatgrowers in Denmark

This paper undertakes an assessment of the impact of implementing the European Commission's Agenda 2000 cereal proposals for specialist wheatgrowers in Denmark. The economic model of a representative farm developed in Rygnestad and Fraser (1996) is extended to include a model of nitrate leaching and then used to simulate the impact of implementing the proposals. The results of this simulation are compared and contrasted with those of the sectoral and regional impact studies reported in European Commission (1998b). In particular, the proposals are shown to have an environmentally-beneficial effect in terms of reduced nitrate leaching, with the magnitude of this effect dependent both on the quality of land and on the ex ante set-aside rate.     

The impact of online user reviews on hotel room sales

Despite hospitality and tourism researchers’ recent attempts on examining different aspects of online word-of-mouth [WOM], its impact on hotel sales remains largely unknown in the existing literature. To fill this void, we conduct a study to empirically investigate the impact of online consumer-generated reviews on hotel room sales. Utilizing data collected from the largest travel website in China, we develop a fixed effect log-linear regression model to assess the influence of online reviews on the number of hotel room bookings. Our results indicate a significant relationship between online consumer reviews and business performance of hotels.