Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Stephen Knowles Author-Name-First: Stephen Author-Name-Last: Knowles Author-Email: stephen.knowles@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Kirsten Robertson Author-Name-First: Kirsten Author-Name-Last: Robertson Author-Email: kirsten.robertson@otago.ac.nz Author-Workplace-Name: Department of Marketing, University of Otago, New Zealand Title: When does it matter how you ask? Cross-subject heterogeneity in framing effects in a charitable donation experiment Abstract: In this paper we present results from an experiment that draws on insights from economics on different possible incentives for generosity and insights from social psychology on different possible personality types. Firstly, we test whether the effect of an appeal to a pure altruism motive versus an appeal to a self-interest motive varies across subjects. We find that there is substantial variation, and this variation is strongly correlated with a subject’s level of materialism. Secondly, we test whether spoken appeals and written appeals have different effects. We find no evidence for such a difference. These results have important implications for the fundraising strategies of charities and for experimental design. Length: 34 pages Creation-Date: 2017-01 Revision-Date: 2017-01 File-URL: http://www.otago.ac.nz/economics/otago633963.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1701 Classification-JEL: D64, M31, C91 Keywords: Altruism, Self-Interest, Dictator Game, Materialism Handle: RePEc:otg:wpaper:1701 Template-Type: ReDIF-Paper 1.0 Author-Name: Santanu Chatterjee Author-Name-First: Santanu Author-Name-Last: Chatterjee Author-Email: schatt@uga.edu Author-Workplace-Name: Department of Economics, University of Georgia, USA Author-Name: Olaf Posch Author-Name-First: Olaf Author-Name-Last: Posch Author-Email: Olaf.Posch@uni-hamburg.de Author-Workplace-Name: Department of Economics, Universitat Hamburg, Germany Author-Name: Dennis Wesselbaum Author-Name-First: Dennis Author-Name-Last: Wesselbaum Author-Email: dennis.wesselbaum@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Delays in Public Goods Abstract: In this paper, we analyze the consequences of delays and cost overruns typically associated with the provision of public infrastructure in the context of a growing economy. Our results indicate that uncertainty about the arrival of public capital can more than offset its positive spillovers for private-sector productivity. In a decentralized economy, unanticipated delays in the provision of public capital generate too much consumption and too little private investment relative to the first-best optimum. The characterization of the first-best optimum is also affected: facing delays in the arrival of public goods, a social planner allocates more resources to private investment and less to consumption relative to the first-best outcome in the canonical model (without delays). The presence of delays also lowers equilibrium growth, and leads to a diverging growth path relative to that implied by the canonical model. This suggests that delays in public capital provision may be a potential determinant of cross-country differences in income and economic growth. Length: 31 pages Creation-Date: 2017-02 Revision-Date: 2017-02 File-URL: http://www.otago.ac.nz/economics/otago634418.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1702 Classification-JEL: C61, E62, H41, O41 Keywords: Public goods, delays, time overrun, cost overrun, implementation lags, fiscal policy, economic growth Handle: RePEc:otg:wpaper:1702 Template-Type: ReDIF-Paper 1.0 Author-Name: Andrew Coleman Author-Name-First: Andrew Author-Name-Last: Coleman Author-Email: andrew.coleman@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: A balancing approach: using the living standards framework to assess different retirement income policies Abstract: This paper evaluates four retirement income policies that could be adopted in response to increasing longevity in terms of their marginal effects on economic performance, equity, risk, social infrastructure, and sustainability. Compared to three policies involving save-as-you-go funding (voluntary saving, government prefunding, or a supplementary mandatory saving scheme), a pay-as-you-go funded expansion New Zealand Superannuation is unattractive as it has the most disadvantages for all but current middle-aged people. The other schemes provide different tradeoffs between risk, economic growth, and equity. There are many good arguments to use structured saving schemes in addition to New Zealand Superannuation. Length: 25 pages Creation-Date: 2017-03 Revision-Date: 2017-03 File-URL: https://deptcontrib.otago.ac.nz/economics/otago637902.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1703 Classification-JEL: E21, H55 Keywords: Retirement income policy; intergenerational economics; Treasury Living Standards framework Handle: RePEc:otg:wpaper:1703 Template-Type: ReDIF-Paper 1.0 Author-Name: Franz Ombler Author-Name-First: Franz Author-Name-Last: Ombler Author-Email: franz@1000minds.com Author-Workplace-Name: Department of Computer Science, University of Otago, New Zealand Author-Name: Michael Albert Author-Name-First: Michael Author-Name-Last: Albert Author-Email: michael.albert@otago.ac.nz Author-Workplace-Name: Department of Computer Science, University of Otago, New Zealand Author-Name: Paul Hansen Author-Name-First: Paul Author-Name-Last: Hansen Author-Email: paul.handsen@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: The true significance of ‘high’ correlations between EQ-5D value sets Abstract: High correlation coefficients for EQ-5D value sets derived from different samples, e.g. across countries, are conventionally interpreted as evidence that the people in the respective samples have similar health-related quality of life preferences. However, EQ-5D value sets contain many inherent rankings of health state values by design. By calculating coefficients for value sets created from random data, we demonstrate that ‘high’ correlation coefficients are an artefact of these inherent rankings; e.g. median Pearson’s r = 0.783 for the EQ-5D-3L and 0.850 for the EQ-5D-5L instead of zero. Therefore, high correlation coefficients do not necessarily constitute evidence of ‘true’ associations. After calculating significance levels based on our simulations – available as a resource for other researchers – we find that many high coefficients are not as significant as conventionally interpreted, whereas other coefficients are not significant. These ‘high’ but insignificant correlations are in fact spurious. Length: 20 pages Creation-Date: 2017-03 Revision-Date: 2017-03 File-URL: http://www.otago.ac.nz/economics/otago640091.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1704 Classification-JEL: C12, I18 Keywords: Correlation; statistical significance; EQ-5D; health-related quality of life Handle: RePEc:otg:wpaper:1704 Template-Type: ReDIF-Paper 1.0 Author-Name: Yonatan Dinku Author-Name-First: Yonatan Author-Name-Last: Dinku Author-Email: yonatan.dinku@postgrad.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Murat Genc Author-Name-First: Murat Author-Name-Last: Genc Author-Email: murat.genc@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Health Shocks and Child Time Allocation Decisions by Households: Evidence from Ethiopia Abstract: Little is currently known about the effects of shocks to parental health on the allocation of children’s time between alternative activities. Using longitudinal data from the Ethiopian Young Lives surveys of 2006 and 2009, we analyze the effect of health shocks on the amount of children’s time spent in work, leisure and education. We find that paternal illness increases the time spent in income-generating work but maternal illness increases the time spent in domestic work. Moreover, maternal illness has a relatively large effect on daughters while paternal illness has a relatively large effect on sons. Overall, parental illness leads to large and significant increases in the amount of child labour as defined by UNICEF. Length: 36 pages Creation-Date: 2017-04 Revision-Date: 2017-04 File-URL: http://www.otago.ac.nz/economics/otago642356.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1705 Classification-JEL: D13; I12; I21; O15 Keywords: parental illness; child labour; Ethiopia Handle: RePEc:otg:wpaper:1705 Template-Type: ReDIF-Paper 1.0 Author-Name: Prince Etwire Author-Name-First: Prince Author-Name-Last: Etwire Author-Email: prince.etwire@postgrad.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Victoria Kahui Author-Name-First: Victoria Author-Name-Last: Kahui Author-Email: victoria.kahui@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: The impact of climate change on crop production in Ghana: A Structural Ricardian analysis Abstract: We apply a Structural Ricardian Model (SRM) to farm-level data from Ghana in order to estimate the impact of climate change on crop production. The SRM explicitly incorporates changes in farmers’ crop selection in response to variation in climate, a feature lacking in many existing models of climate change response in Africa. Two other novel features of our model are an estimate of the response of agricultural profits to differences in land tenure, and a comprehensive investigation of the appropriate functional form with which to model farmers’ responses. This final feature turns out to be important, since estimates of the effect of climate change turn out to be sensitive to the choice of functional form. Length: 35 pages Creation-Date: 2017-04 Revision-Date: 2017-04 File-URL: http://www.otago.ac.nz/economics/otago642357.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1706 Classification-JEL: O13; O55; Q12; Q54 Keywords: Structural Ricardian Model; climate change; Ghana Handle: RePEc:otg:wpaper:1706 Template-Type: ReDIF-Paper 1.0 Author-Name: Dereje Regasa Author-Name-First: Dereje Author-Name-Last: Regasa Author-Email: regde140@student.otago.ac.nz Author-Workplace-Name: Department of Accountancy and Finance, University of Otago, New Zealand Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Helen Roberts Author-Name-First: Helen Author-Name-Last: Roberts Author-Email: helen.roberts@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Access to Financing and Firm Growth: Evidence from Ethiopia Abstract: Using Ethiopian firm-level data, we model the effect of different types of financing on firm growth. The form of financing is potentially endogenous to firm growth, and one contribution of this paper is to introduce a new instrumental variable which captures local variation in financial depth. Unlike previous studies of firms in low-income countries, we find evidence for a negative relationship between the use of external finance and firm growth, which suggests that there are substantial cross-country differences in the finance-growth nexus. We discuss possible explanations for this phenomenon and its implications for development policy. Length: 31 pages Creation-Date: 2017-04 Revision-Date: 2017-04 File-URL: http://www.otago.ac.nz/economics/otago642358.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1707 Classification-JEL: D24, G31, O55 Keywords: Ethiopia; firm growth; external financing Handle: RePEc:otg:wpaper:1707 Template-Type: ReDIF-Paper 1.0 Author-Name: Amelia Aburn Author-Name-First: Amelia Author-Name-Last: Aburn Author-Workplace-Name: Victoria University of Wellington, New Zealand Author-Name: Dennis Wesselbaum Author-Name-First: Dennis Author-Name-Last: Wesselbaum Author-Email: dennis.wesselbaum@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Gone with the Wind: International Migration Abstract: This paper adds to the literature on the determinants of international migration. First, we offer a joint analysis of the driving forces of migration capturing year-to-year variations and long-run effects. Second, we analyze the dynamic response of migration to shocks to its determinants. We start by presenting a theoretical model that allows us to model migration as an augmented gravity equation. We then construct a rich panel data set with 16 destination and 198 origin countries between 1980 and 2014. Most importantly, we find that climate change is a more important driver than income and political freedom together. Our results imply that a large time dimension is key to understand the effects of climate change. We then estimate a panel vectorautoregressive model showing that the dynamic response of migration is very different across shocks to different driving forces. Our findings carry implications for national and international immigration policies. Length: 31 pages Creation-Date: 2017-04 Revision-Date: 2017-04 File-URL: http://www.otago.ac.nz/economics/otago642786.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1708 Classification-JEL: F22, O15, Q54 Keywords: Climate Change, Determinants, Dynamic Effects, International Migration Handle: RePEc:otg:wpaper:1708 Template-Type: ReDIF-Paper 1.0 Author-Name: Andrew Coleman Author-Name-First: Andrew Author-Name-Last: Coleman Author-Email: andrew.coleman@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Housing, the ‘Great Income Tax Experiment’, and the intergenerational consequences of the lease Abstract: This paper provides an analysis of how the New Zealand tax system may be affecting residential property markets. Like most OECD countries, New Zealand does not tax the imputed rent or capital gains from owner-occupied housing. Unlike most OECD countries, since 1989 New Zealand has taxed income placed in retirement savings funds on an income basis, rather than an expenditure basis. The result is likely to be the most distortionary tax policy towards housing in the OECD. Since 1989, these tax distortions have provided incentives that should have lead to significant increases in house prices and the average size of new dwellings, should have reduced owner-occupier rates, and should have led to a worsening of the overseas net asset position. The tax settings are likely to be regressive, and are not intergenerationally neutral, as they impose significant costs on current and future generations of young New Zealanders (and new migrants). Since it does not appear to be politically palatable to tax capital gains or imputed rent, to reduce the distortionary consequences of the tax system on housing markets New Zealand may wish to reconsider how it taxes retirement savings accounts by adopting the standard OECD approach. Length: 84 pages Creation-Date: 2017-04 Revision-Date: 2017-04 File-URL: http://www.otago.ac.nz/economics/otago642975.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1709 Classification-JEL: Keywords: Handle: RePEc:otg:wpaper:1709 Template-Type: ReDIF-Paper 1.0 Author-Name: Syed Abul Basher Author-Name-First: Syed Abul Author-Name-Last: Basher Author-Email: syed.basher@gmail.com Author-Workplace-Name: Department of Economics, East west University, Bangladesh Author-Name: Alfred Haug Author-Name-First: Alfred Author-Name-Last: Haug Author-Email: alfred.haug@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Perry Sadorsky Author-Name-First: Perry Author-Name-Last: Sadorsky Author-Email: psadorsk@schulich.yorku.ca Author-Workplace-Name: School of Business, York University, Canada Title: The impact of oil-market shocks on stock returns in major oil-exporting countries: A Markov-switching approach Abstract: The impact that oil shocks have on stock prices in oil exporting countries has implications for both domestic and international investors. We derive the shocks driving oil prices from a fully-identified structural model of the oil market. We study their nonlinear relationship with stock market returns in major oil-exporting countries in a multi-factor Markov-switching framework. Flow oil-demand shocks have a statistically significant impact on stock returns in Canada, Norway, Russia, Kuwait, Saudi Arabia, and the UAE. Idiosyncratic oil-market shocks affect stock returns in Norway, Russia, Kuwait, Saudi Arabia and UAE. Speculative oil shocks impact stock returns in Canada, Russia, Kuwait and the UAE. Flow oil-supply shocks matter for the UK, Kuwait, and UAE. Mexico is the only country where stock returns are unaffected by oil shocks. These results shed important light on investor sentiment toward the relationship between oil shocks and stock markets in oil exporting countries. Length: 39 pages Creation-Date: 2017-10 Revision-Date: 2017-10 File-URL: http://www.otago.ac.nz/economics/otago665042.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1710 Classification-JEL: E44, G15, Q43 Keywords: Markov-switching; oil-exporting countries; oil-market shocks; stock returns Handle: RePEc:otg:wpaper:1710 Template-Type: ReDIF-Paper 1.0 Author-Name: David Fielding Author-Name-First: David Author-Name-Last: Fielding Author-Email: david.fielding@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Stephen Knowles Author-Name-First: Stephen Author-Name-Last: Knowles Author-Email: stephen.knowles@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Kirsten Robertson Author-Name-First: Kirsten Author-Name-Last: Robertson Author-Email: kirsten.robertson@otago.ac.nz Author-Workplace-Name: Department of Marketing, University of Otago, New Zealand Title: Alcohol Expenditure, Generosity and Empathy Abstract: Existing studies suggest that alcohol dependency (or recovery from alcohol dependency) is associated with lower levels of empathy and generosity. We present results from a charitable donation experiment which shows that in a student population, higher levels of alcohol expenditure are associated with significantly less generosity. However, there is no significant association between alcohol expenditure and empathy (as measured by the Empathy Quotient Scale), which suggests that the relationship between alcohol expenditure on generosity is mediated through some other channel. Length: 34 pages Creation-Date: 2017-12 Revision-Date: 2017-12 File-URL: http://www.otago.ac.nz/economics/otago670096.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1711 Classification-JEL: D64; I19 Keywords: alcohol; generosity; empathy; Dictator Game Handle: RePEc:otg:wpaper:1711 Template-Type: ReDIF-Paper 1.0 Author-Name: Arlene Garces-Ozanne Author-Name-First: Arlene Author-Name-Last: Gardes-Ozanne Author-Email: arlene.ozanne@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Avatar Singh Author-Name-First: Avtar Author-Name-Last: Singh Author-Email: samra.sudana85@gmail.com Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Revisiting The Decline In India’s Female Labour Force Participation: The Rise Of Machines And Security Risks Abstract: This article posits that the mechanisation of agriculture and security risks have significant negative effects on India’s female labour force participation rate. Despite remarkable economic progress in India, aggregate female labour force participation rate still show a declining trend since the late 1970s and traditional explanations such as decreasing fertility rates, rising wages and education levels could not completely explain this trend in female labour force participation. Using time-series data from 1980, we find evidence that the share of agriculture to the GDP, the mechanisation of agriculture, and security risks are the key determinants of female labour force participation. Length: 36 pages Creation-Date: 2017-12 Revision-Date: 2017-12 File-URL: http://www.otago.ac.nz/economics/otago670806.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1712 Classification-JEL: J01, J20, J21 Keywords: Handle: RePEc:otg:wpaper:1712 Template-Type: ReDIF-Paper 1.0 Author-Name: Paul Thorsnes Author-Name-First: Paul Author-Name-Last: Thorsnes Author-Email: paul.thorsnes@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Heterogeneity in household preferences for energy-efficient heating systems Abstract: This paper reports analysis of the results of two stated-choice surveys to elicit the preferences of New Zealand homeowners for attributes of improvements in space and water heating systems. We implement the survey using web-based software especially well-suited to exploration of heterogeneity in preferences across participants; independently for each participant it provides estimates of the relative strength of preference for each attribute. Cluster analysis reveals five groups of participants with similar patterns of preferences. Interestingly, the cluster comprising people who prefer to avoid a large upfront expenditure – those targeted by current subsidy policy – is the smallest of the five clusters. The attributes of most concern to each of the other four groups suggest alternative policy interventions. Length: 40 pages Creation-Date: 2017-12 Revision-Date: 2017-12 File-URL: http://www.otago.ac.nz/economics/research/otago671642.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1713 Classification-JEL: Keywords: Handle: RePEc:otg:wpaper:1713 Template-Type: ReDIF-Paper 1.0 Author-Name: Leon Stirk-Wang Author-Name-First: Leon Author-Name-Last: Stirk-Wang Author-Email: leon.stirkwang@postgrad.otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Paul Thorsnes Author-Name-First: Paul Author-Name-Last: Thorsnes Author-Email: paul.thorsnes@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Title: Geographic variation in intra-city house price appreciation over the boom-bust cycle: evidence from Auckland, NZ Abstract: This study contributes to the empirical literature on intra-urban house-price dynamics. A demand shock affects metropolitan-area house prices, but the effect of the shock varies across neighborhoods. For example, in a relatively recent paper, Guerrieri et al. (2013) provide evidence that the variation in house-price appreciation across the census tracts in relatively large US cities is greater than the variation across cities overall; the intra-city standard deviation in house prices is about 0.5 relative to the inter-city standard deviation of about 0.2. Of interest is why this happens. More specifically, this paper contributes to the literature that addresses the question of how and why the effects of a demand shock flow through the metro-area housing market. The key data needed for this kind of analysis consist of price indices at relatively small geographic scales. Guerrieri et al., for example, use annual Case-Shiller repeat-sales indices at the zip code level. They also use much less frequent information from the decennial census at the smaller census tract level. In this study we use observations on estimates of median house value on 1 July in each of 111 census ‘area units’ – similar to US census tracts – in Auckland, New Zealand from year 2000 through 2016. This gives us relatively high spatial resolution and, conveniently, this time period covers a general boom, a mild bust, and then another boom in house prices Length: 30 pages Creation-Date: 2017-12 Revision-Date: 2017-12 File-URL: http://www.otago.ac.nz/economics/research/otago671643.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1714 Classification-JEL: Keywords: Handle: RePEc:otg:wpaper:1714 Template-Type: ReDIF-Paper 1.0 Author-Name: Dorian Owen Author-Name-First: Dorian Author-Name-Last: Owen Author-Email: dorian.owen@otago.ac.nz Author-Workplace-Name: Department of Economics, University of Otago, New Zealand Author-Name: Caitlin Owen Author-Name-First: Caitlin Author-Name-Last: Owen Author-Email: caitlin.owen@otago.ac.nz Author-Workplace-Name: Department of Information Science, University of Otago, New Zealand Title: Simulation Evidence on Herfindahl-Hirschman Indices as Measures of Competitive Balance Abstract: Measurement of the degree of competitive balance, how evenly teams are matched, is central to the economic analysis of professional sports leagues. A common problem with competitive balance measures, however, is their sensitivity to the number of teams and the number of matches played by each team, i.e., season length. This paper uses simulation methods to examine the effects of changes in season length on the distributions of several widely used variants of the Herfindahl- Hirschman index applied to wins in a season. Of the measures considered, a normalized measure, accounting for lower and upper bounds, and an adjusted measure perform best, although neither completely removes biases associated with different season lengths. Length: 34 pages Creation-Date: 2017-12 Revision-Date: 2017-12 File-URL: http://www.otago.ac.nz/economics/research/otago671741.pdf File-Format: Application/pdf File-Function: First version, 2017 Number: 1715 Classification-JEL: D63, C63, L83, Z20 Keywords: Herfindahl-Hirschman, Competitive balance, Simulation Handle: RePEc:otg:wpaper:1715