The Incidence of EU Per‐Hectare Payments on Farmland Rental Rates: A Spatial Econometric Analysis of German Farm‐Level Data

This article analyses determinants for 2001 farmland rental prices from 3,819 farms in Germany. Based on specification tests we estimate a general spatial model to account for both spatial relationships among rental prices of neighbouring farmers and spatially autocorrelated error terms. A €1 per hectare higher rental price in a farmer’s neighbourhood coincides with a €0.72 higher rental price paid by the farmer. The marginal incidence of EU per‐hectare payments paid for eligible arable crop land on rental rates amounts to €0.38 for each additional €1 of premium payments. Regional livestock density, which is indirectly influenced by different policies, is also a major determinant of rental prices. Results are confirmed by sensitivity analyses. Consequently, German farmland rental rates are heavily influenced by agricultural policy instruments and therefore, these policies exhibit substantial distributional effects.     

Aufstocker – Kein Indiz für ein Niedriglohnproblem

Immer mehr Erwerbst?tige erhalten zus?tzlich zu ihrem Einkommen Leistungen durch den Staat. Um welche Leistungen handelt es sich dabei? Welche Familiensituation liegt bei diesen Aufstockern vor? Wodurch ist der Anstieg der Aufstockerzahlen verursacht? Dr. Hendrik Luchtmeier, 38, ist Referent im Bundesministerium für Wirtschaft und Technologie; Johannes Ziemendorff, 27, M.Sc. Wirtschaftswissenschaften ist Stipendiat am Deutschen Institut für Wirtschaftsforschung.     

How Likely are Employers to Rehire Older Workers After Mandatory Retirement? A Vignette Study Among Managers

With a vignette experiment among Dutch managers we examine employers’ considerations in the decision to rehire employees after mandatory retirement. We specifically focus on the effects of the employee’s downward wage flexibility (i.e., the willingness to accept a lower wage) and contract flexibility (i.e., preference for a contract which allows flexible hours or employment). The results show that employers are strongly affected by employees who offer to work for a significantly lower wage, but not by the employees’ preference for a particular labor contract. Employers are overall quite disinclined to rehire employees after mandatory retirement, although large differences exist between employees. Part of these differences can be explained by employers having higher retirement age norms (i.e., the maximum age at which employers consider employees suited for work in their organization).     

Fiscal Decentralization and Government Size: An International Test for Leviathan Accounting for Unmeasured Economic Activity

Tests for the presence of Leviathan, evidenced by a positive relationship between the size of government measured as a percentage of GDP, and the degree of fiscal centralization, have provided mixed results. We derive alternative measures of the size of government taking into account household and informal market activity. Traditional Leviathan models are then re-estimated for an international sample of forty-five countries. Controlling for income, population, intergovernmental grants, and urbanization we test whether fiscal centralization is responsible for the relative size of government. We find no evidence of a relationship between fiscal centralization and government size.     

Consumption tax competition among governments: Evidence from the United States

The paper contributes to a small but growing literature that estimates tax reaction functions of governments competing with other governments. We analyze consumption tax competition between US states, employing a panel of state-level data for 1977–2003. More specifically, we study the impact of a state’s spatial characteristics (i.e., its size, geographic position, and border length) on the strategic interaction with its neighbors. For this purpose, we calculate for each state an average effective consumption tax rate, which covers both sales and excise taxes. In addition, we pay attention to dynamics by including lagged dependent variables in the tax reaction function. We find overwhelming evidence for strategic interaction among state governments, but only partial support for the effect of spatial characteristics on tax setting. Tax competition seems to have lessened in the 1990s compared to the early 1980s.     

Hidden liquidity: An analysis of order exposure strategies in electronic stock markets

Many stock exchanges choose to reduce market transparency by allowing traders to hide some or all of their order size. We study the costs and benefits of order exposure and test hypotheses regarding hidden order usage using a sample of Euronext-Paris stocks, where hidden orders represent 44% of the sample order volume. Our results support the hypothesis that hidden orders are associated with a decreased probability of full execution and increased average time to completion, and fail to support the alternate hypothesis that order exposure causes defensive traders to withdraw from the market. However, exposing rather than hiding order size increases average execution costs. We assess the extent to which non-displayed size is truly hidden and document that the presence and magnitude of hidden orders can be predicted to a significant, but imperfect, degree based on observable order attributes, firm characteristics, and market conditions. Overall, the results indicate that the option to hide order size is valuable, in particular, to patient traders.     

A central limit theorem for the Hellinger loss of Grenander‐type estimators

We consider Grenander‐type estimators for a monotone function , obtained as the slope of a concave (convex) estimate of the primitive of λ. Our main result is a central limit theorem for the Hellinger loss, which applies to estimation of a probability density, a regression function or a failure rate. In the case of density estimation, the limiting variance of the Hellinger loss turns out to be independent of λ.     

On discouraging environments in team contests: Evidence from top-level beach volleyball

This contribution empirically investigates the adverse effects of unbalanced competition and negative feedback in team contests in the field. Using a unique data set sourced from top-level beach volleyball, I provide evidence for discouragement effects in line with contest theory. The analysis identifies a non-linear relationship between ex ante contestant heterogeneity and performance. Overall, no gender differences can be found. Finally, it shows that age diversity in teams helps to overcome setbacks.     

Quote-based competition and trade execution costs in NYSE-listed stocks

This study examines quotations, order routing, and trade execution costs for seven markets that compete for orders in large-capitalization NYSE-listed stocks. The competitiveness of quote updates from each market varies with measures of the profitability of attracting additional order and with volatility and inventory measures. The probability of a trade executing on each market increases when the market posts competitive quotes. Execution costs for non-NYSE trades when the local market posts competitive (non-competitive) quotes are virtually the same (substantially exceed) costs for matched NYSE trades. Collectively, these results imply a significant degree of quote-based competition for order flow and are consistent with off-NYSE liquidity providers using competitive quotations to signal when they are prepared to give better-than-normal trade executions.