Interpersonal dependency of preferences

Standard decision theoretic models disregard the phenomenon of interpersonal dependency of preferences. In this paper it is argued that interpersonal dependency of preferences is a serious challenge for standard utility theory. First we sketch the more philosophical aspects of the problem and then, using a simple, formal model for the two-person case, we show that interpersonal dependency of preferences generally results in indeterminacy of preferences (resp. of subjective utility).     

Saving and consumption patterns of the elderly

The paper provides an empirical analysis of saving and consumption choices of the elderly in Germany, based on the German income and expenditure surveys 1978 and 1983. Main feature of these data is the large sample size making it possible to analyze saving and consumption patterns of the very old (aged 75 and above).The observed age-consumption profiles are very different from those predicted by the pure life-cycle theory. Although wealth is declining between age 60 and 70, it increases again after 70, such that the very old have the highest savings rates among all age groups and accumulate wealth rather than decumulate it. These profiles are not confounded by cohort effects and mortality differences. The corresponding expenditure data suggest the following explanation: due to the generous German pension system and the almost complete coverage of health expenses by the mandatory health insurance in Germany, the declining consumption n very old age cannot exhaust the annuity income of the elderly such that wealth is being accumulated in old age.Research in this paper was supported by the National Institute on Aging, grant no. 3 PO1 AG05842-01. I appreciate the helpful comments by Doug Bernheim, Angus Deaton, Daniel McFadden, Jonathan Skinner, Konrad 'Stahl and David Wise, and two anonymous referees. I am indebted to Hermann Buslei and Johannes Velling who provided most valuable and able assistance.     

Urban and peri-urban agriculture and its implication on food and nutrition insecurity in northern Ghana: a socio-spatial analysis along the urban–rural continuum

Food and nutrition insecurity remains a challenge in sub-Saharan Africa. Several studies have examined food and nutrition insecurity in urban or rural areas but have not captured the whole continuum. Between November and December 2013, 240 households were surveyed along the urban–rural continuum in Northern Ghana. The study objective was to understand the socio-spatial dynamics of household food and nutrition insecurity and to investigate the role played by urban, peri-urban and rural agriculture. The study found that there was more involvement in agriculture in rural areas compared to peri-urban areas and urban areas. Households from urban areas were more food insecure (HFIAS >?11) compared to their counterparts in peri-urban and the rural areas. Stunting increased by 3.4 times (p?=?0.048) among households located in the peri-urban area. Wasting was reduced by 0.16 times among household that produced staple food or vegetables (p?=?0.011). Overweight was reduced by 0.04 times among households that produced livestock (p?=?0.031). The results reveal a socio-spatial dimension of food and nutrition insecurity that is related to agricultural activities.     

LABOR SUPPLY OF POLITICIANS

Using data on Members of the European Parliament (MEPs), we examine the impact of salaries on the composition and the behavior of legislators. Employing a differences‐in‐differences approach, we exploit the introduction of a law that equalized MEPs' salaries which had previously differed by as much as a factor of 10. Increasing salaries raises the fraction of MEPs who run for re‐election but decreases the quality of elected MEPs (proxied by college quality). Salary has no discernible impact on effort or legislation output. Higher salaries induce more political competition.     

Implementing Monte Carlo tests with p-value buckets

Software packages usually report the results of statistical tests using p-values. Users often interpret these values by comparing them with standard thresholds, for example, 0.1, 1, and 5%, which is sometimes reinforced by a star rating (***, **, and *, respectively). We consider an arbitrary statistical test whose p-value p is not available explicitly, but can be approximated by Monte Carlo samples, for example, by bootstrap or permutation tests. The standard implementation of such tests usually draws a fixed number of samples to approximate p. However, the probability that the exact and the approximated p-value lie on different sides of a threshold (the resampling risk) can be high, particularly for p-values close to a threshold. We present a method to overcome this. We consider a finite set of user-specified intervals that cover [0, 1] and that can be overlapping. We call these p-value buckets. We present algorithms that, with arbitrarily high probability, return a p-value bucket containing p. We prove that for both a bounded resampling risk and a finite runtime, overlapping buckets need to be employed, and that our methods both bound the resampling risk and guarantee a finite runtime for such overlapping buckets. To interpret decisions with overlapping buckets, we propose an extension of the star rating system. We demonstrate that our methods are suitable for use in standard software, including for low p-value thresholds occurring in multiple testing settings, and that they can be computationally more efficient than standard implementations.     

Floods and Climate Change: Interactions and Impacts

Whether the floods experienced during the last decade in Germany and in other European countries are triggered or worsened by human activities has been the subject of a great deal of debate. Possible anthropogenic activities leading to increased flood risk include river regulation measures, intensified land use and forestry, and emissions of greenhouse gases causing a change in the global climate. This article discusses the latter by reviewing the existing knowledge on the subject. First, the relevance, capabilities, and limitations of climate models for the simulation and analysis of flood risk under aspects of the anthropogenic climate change are described. Special consideration is given here to differences between the "typical" spatial scale of climate models and hydrological flood models. Second, observations of trends in climate variables relevant for river flooding issues are summarized. Special emphasis is put on the Rhine and other German catchment areas. Third, the possibilities of modeling the different parts of the "cascade of flood risk" are summarized, introducing the special features of meteorological, hydrological, and river hydraulic models.     

Buying a pig in a poke: An experimental study of unconditional veto power

We study an ultimatum experiment in which the responder does not know the offer when accepting or rejecting. Unconditional veto power leads to acceptances, although proposers are significantly greedier than in standard ultimatum games, and this is anticipated by responders. We also elicit responders’ willingness to pay for (un)conditional veto power. The bids reveal a large endowment effect.     

Verbetrieblichung und betrieblicher Konflikt

Since the 1990s there is an ongoing process of decentralisation and ??Verbetrieblichung?? in German labour regulation. The opening of regional sector-level collective agreements for additional specific bargaining at the plant level is evaluated and discussed by practitioners and scholars very controversially. Critics of the decentralisation trends expect an increase of distributive conflicts inside plants and companies. The article analyses whether there are actually signs for an increase of conflicts in firm-level industrial relations in this context, and if so, under which conditions conflicts are likely to occur. Based in theoretical considerations, the article analyses the influence of different patterns of collective agreements on the incidence of conflicts and the relationship between employers and employees at firm level. Empirical data stems from a representative survey that includes interviews with management and employee representatives from German private sector companies. The data suggest some evidence on the conflict reducing function of industry-level collective agreements. Changes in a firm??s regulation structure appear to increase conflicts.     

Cross-country determinants of life satisfaction: exploring different determinants across groups in society

This paper explores a wide range of cross-country determinants of life satisfaction exploiting a database of 90,000 observations in 70 countries. We distinguish four groups of aggregate variables as potential determinants of satisfaction: political, economic, institutional, and human development and culture. We use ordered probit to investigate the importance of these variables on individual life satisfaction and test the robustness of our results with Extreme Bounds Analysis. The results show that only a small number of factors, such as openness, business climate, postcommunism, the number of chambers in parliament, Christian majority, and infant mortality, robustly influence life satisfaction across countries while the importance of many variables suggested in the previous literature is not confirmed. This remains largely true when the analysis splits national populations according to gender, income, and political orientation also. We thank Stephen Lea, participants at the 30th IAREP conference in Prague and the referees of this journal for comments on earlier versions. Gilles Winkler provided excellent research assistance.