Working Papers 2013

All new research is first presented in a Working Paper (WP) where the target audience is primarily other researchers. All WP’s from recent years are written in English. Since 2006, a Swedish summary has also been included. A WP usually contains research that has progressed enough to be ready to be submitted to a scientific journal for review and potential publication.


998. Strategic Interaction vs. Regulatory Compliance among Regulated Utilities: The Swedish Water Sector

Erik Lundin

This study provides the first empirical test of strategic interactions in the pricing decisions of regulated utilities. Since publicly owned water utilities in Sweden are governed by a cost-of-service regulation, prices in neighboring municipalities…


997. More Open – Better Governed? Evidence from High- and Low-income Countries

Andreas Bergh, Irina Mirkina and Therese Nilsson

Using World Bank data on institutional quality and the KOF Globalization Index, we examine over 100 countries from 1992 to 2010 to analyze the relationship between economic and social globalization and six measures of institutional quality. Theoretically,…


996. Human Trafficking and Regulating Prostitution

Samuel Lee and Petra Persson

We study sex trafficking in a marriage market model of prostitution. When traffickers can coerce women to sell sex, trafficked prostitutes constitute a non-zero share of supply in any unregulated market for sex. We ask if regulation can eradicate…


995. Attention Manipulation and Information Overload

Petra Persson

When a decision-maker’s attention is limited, her decisions depend on what she focuses on. This gives interested parties an incentive to manipulate not only the substance of communication but also the decision-maker’s attention allocation.…


994. Trust, Welfare States and Income Equality: What Causes What?

Andreas Bergh and Christian Bjørnskov

The cross-country correlation between social trust and income equality is well documented, but few studies examine the direction of causality. We show theoretically that by facilitating cooperation, trust may increase efficiency and lead to more equal…


993. Topping up and the Political Support for Social Insurance

Andreas Bergh

This paper analyzes how the possibility to complement social income insurance schemes with private insurance affects the political support for social insurance. It is shown that political support for social insurance is weakly decreasing in the…


992. Effects of Compulsory Schooling on Mortality: Evidence from Sweden

Martin Fischer, Martin Karlsson and Therese Nilsson

Theoretically, there are several reasons to expect education to have a positive effect on health and empirical research suggests that education can be an important health determinant. However, it has not yet been established whether education and health…


991. EU Trade Preferences and Export Diversification

Maria Persson and Fredrik Wilhelmsson

Since at least the 1960s, the European Union (EU) has offered various kinds of non-reciprocal trade preferences for developing countries. Originally, these trade preferences had at least two policy goals: (i) to increase export volumes for developing…


990. A Simple Method to Account for Measurement Errors in Revealed Preference Tests

Per Hjertstrand

Revealed preference tests are widely used in empirical applications of consumer rationality. These are static tests, and consequently, lack ability to handle measurement errors in the data. This paper extends and generalizes existing procedures that…


989. Risking Other People’s Money: Experimental Evidence on Bonus Schemes, Competition, and Altruism

Ola Andersson, Håkan J. Holm, Jean-Robert Tyran and Erik Wengström

We study risk taking on behalf of others in an experiment on a large random sample. The decision makers in our experiment are facing high-powered incentives to increase the risk on behalf of others through hedged compensation contracts or with tournament…


988. Social Capital and Political Institutions: Evidence that Democracy Fosters Trust

Martin Ljunge

This paper finds evidence that more democratic political institutions increase trust. Second generation immigrants with ancestries from 115 countries are studied within 30 European countries. Comparing individuals born and residing in the same country,…


987. Foreign Direct Investments in Southeast Asia

Fredrik Sjöholm

Foreign direct investment has been of great importance in economic growth and global economic integration over the last decades. South East Asia has been part of this development with rapidly increasing inflows of FDI. However, there are large variations…


986. Product Market Reforms and Incentives to Innovate in Sweden

Harald Edquist and Magnus Henrekson

The Swedish economy has developed rapidly since the mid-1990s relative to most comparable countries, in particular relative to almost all other EU-15 countries. We investigate two policy areas that are believed to have been important for the strong…


985. Gender Quotas and the Crisis of the Mediocre Man: Theory and Evidence from Sweden

Timothy Besley, Olle Folke, Torsten Persson and Johanna Rickne

Efforts to increase female political representation are often thought to be at odds with meritocracy. This paper develops a theoretical framework and an empirical analysis to examine this idea. We show how the survival concerns of a mediocre male party…


984. Entry Regulations, Product Differentiation and Determinants of Market Structure

Florin Maican and Matilda Orth

We use a dynamic oligopoly model of entry and exit to evaluate how entry regulations affect profitability and market structure in retail. The model incorporates demand and store-level heterogeneity. Based on unique data for all retail food stores in…


983. Multilateral Environmental Agreements in the WTO: Silence Speaks Volumes

Henrik Horn and Petros C. Mavroidis

This study contributes to the debate concerning the appropriate role of multilateral environmental agreements (MEAs) in in WTO dispute settlement. Its distinguishing feature is that it seeks to address this relationship in light of the reason why the…


982. Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden

Karin Edmark and Roger Gordon

This paper estimates the role of both tax and non-tax determinants in the choice in Sweden to be a closely-held corporation vs. a proprietorship, using individual data for 2004 to 2008 on owners of closely-held businesses. While lower-income individuals…


981. The Short- and Long-term Effects of School Choice on Student Outcomes — Evidence from a School Choice Reform in Sweden

Verena Wondratschek, Karin Edmark and Markus Frölich

This paper evaluates the effects of a major Swedish school choice reform. The reform in 1992 increased school choice and competition among public schools as well as through a large-scale introduction of private schools. We estimate the effects of school…


980. The ECJ Judgment on the Extensions of the ETS to Aviation: An Economist’s Discontent

Henrik Horn

Few EU decisions have caused more international outcry than the extension of the EU Emissions Trading System (ETS) to apply to aviation. The directive was legally challenged by US airlines before a UK court, which referred the case to the European Court…


979. The Time WTO Panels Require to Issue Reports

Henrik Horn

Almost all WTO dispute panels exceed their statutory time limits. This is often seen to indicate a more general problem for panels to manage their tasks. The time required varies considerably across panels however, suggesting that they do not face the…


978. Changing the Corporate Elite? Not So Easy. Female Directors’ Appointments onto Corporate Boards

Aleksandra Gregorič, Lars Oxelheim, Trond Randøy and Steen Thomsen

Scholars have previously investigated country and organizational-level factors associated with the incidence of female directors on boards. These studies, however, cannot explain why, in countries with strong gender equality and pressure for female…


977. Swedish Labor Income Taxation (1862–2013)

Gunnar Du Rietz, Dan Johansson and Mikael Stenkula

This paper presents annual Swedish time-series data on the top marginal tax wedge and marginal tax wedges on labor income for a low-, average- and high-income earners for the period 1862 to 2013. The tax wedges were initially low and the tax system…


976. Deciding for Others Reduces Loss Aversion

Ola Andersson, Håkan J. Holm, Jean-Robert Tyran and Erik Wengström

We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people…


975. Can Indifference Make the World Greener?

Johan Egebark and Mathias Ekström

We test whether people’s tendency to stick with the default option can help save resources. In a natural field experiment we switch printers’ default settings, from simplex to duplex printing, at a large Swedish university. The results confirm…


974. The Role of Language in Corporate Governance: The Case of Board Internationalization

Rebecca Piekkari, Lars Oxelheim and Trond Randøy

Multinational corporations internationalize their corporate boardrooms in order to capitalize on their commercial and financial internationalization. Board internationalization provides access to specialized knowledge and skills, broadens social networks…


973. The Bracteate as Economic Idea and Monetary Instrument

Roger Svensson

Although the leaf-thin bracteates are the most fragile coins in monetary history, they were the main coin type for almost two centuries in large parts of medieval Europe. The usefulness of the bracteates can be linked to the contemporary monetary taxation…


972. What Do Revealed Preference Axioms Reveal about Elasticities of Demand?

Per Hjertstrand and Barry E. Jones

It is well-known that observed data on prices and quantities of a set of goods is consistent with rational choice if the data satisfy revealed preference. In this paper, we derive estimators for demand and substitution elasticities at the observed data…


971. Revealed Preference Tests of Utility Maximization and Weak Separability of Consumption, Leisure and Money with Incomplete Adjustment

Per Hjertstrand, James L. Swofford and Gerald A. Whitney

Swofford and Whitney (1987) investigated the validity of two types of assumptions that underlie the representative agent models of modern macroeconomics and monetary economics. These assumptions are utility maximization and weak or functional separability…


970. Experience and Entrepreneurship

Christopher I. Rider, Peter Thompson, Aleksandra Kacperczyk and Joacim Tåg

We document in two very different datasets an inverted U-shaped relationship between work experience and entrepreneurship among movers. The first dataset consists of 1,248, U.S. lawyers who were forced to seek alternative employment after the sudden…


969. Now or Later? Trading Wind Power Closer to Real-time and How Poorly Designed Subsidies Lead to Higher Balancing Costs

Johannes Mauritzen

An important challenge facing many deregulated electricity markets is dealing with the increasing penetration of intermittent generation. Simulation studies have pointed to the advantages of trading closer to real-time with large amounts of intermittent…


968. Renewable Electricity Policy and Market Integration

Thomas Tangerås

I analyze renewable electricity policy in a multinational electricity market with transmission investment. If national policy makers choose support schemes to maximize domestic welfare, then a trade policy motive arises operating independently of any…


967. Social Capital and the Family: Evidence that Strong Family Ties Cultivate Civic Virtues

Martin Ljunge

I establish a positive relationship between family ties and civic virtues, as captured by disapproval of tax and benefit cheating, corruption, and a range of other dimensions of exploiting others for personal gain. I find that family ties are a complement…


966. Competitive Pressure and Technology Adoption: Evidence from a Policy Reform in Western Canada

Shon Ferguson and Rose Olfert

We measure the impact of the removal of a railway transportation subsidy on the adoption of technology for Western Canadian farms, using a unique combination of Census and freight rate data. We exploit the large regional variation in these one-time…


965. Rich Man’s War, Poor Man’s Fight? Socioeconomic Representativeness in the Modern Military

Andrea Asoni and Tino Sanandaji

Historically, the American armed forces were disproportionally drawn from lower socioeconomic backgrounds. A transition toward a smaller and more selective military has changed this tendency. Since the armed forces do not gather data on…


964. Risk Aversion Relates to Cognitive Ability: Fact or Fiction?

Ola Andersson, Jean-Robert Tyran, Erik Wengström and Håkan J. Holm

Online appendix Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish…


963. Production Hierarchies in Sweden

Joacim Tåg

I study the internal organization of firms using occupation data on workers in Swedish manufacturing firms. Firms with more layers are larger in size, in value added, and they pay higher wages. Firms are hierarchal in that lower layers have more workers…


962. How to Combine High Sunk Costs of Exporting and Low Export Survival

Joakim Gullstrand and Maria Persson

In endeavouring to explain the empirical puzzle that the sunk costs of exporting are important, but that, at the same time, trade flows do not, on average, survive for very long, this paper explores the concepts of core and peripheral markets. First, it…


961. Using Lasso-Type Penalties to Model Time-Varying Covariate Effects in Panel Data Regressions – A Novel Approach Illustrated by the ‘Death of Distance’ in International Trade

Wolfgang Hess, Maria Persson, Stephanie Rubenbauer and Jan Gertheiss

When analyzing panel data using regression models, it is often reasonable to allow for time-varying covariate effects. We propose a novel approach to modelling timevarying coefficients in panel data regressions, which is based on penalized regression…


960. In the Shadow of the DSU: Addressing Specific Trade Concerns in the WTO SPS and TBT Committees

Henrik Horn, Petros C. Mavroidis and Erik N. Wijkström

The paper argues that focusing only on disputes formally raised in the WTO Dispute Settlement system underestimates the extent of trade conflict resolution within the WTO.  Both the SPS and TBT Committees address a significant number of…


959. Small Business Activity Does not Measure Entrepreneurship

Magnus Henrekson and Tino Sanandaji

Entrepreneurship policy mainly aims to promote innovative "Schumpeterian" entrepreneurship. However, the rate of entrepreneurship is commonly proxied using quantity-based metrics, such as small business activity, the self-employment rate or the…


958. Globalization of Monitoring Practices: The Case of American Influences on the Dismissal Risk of European CEOs

Lars Oxelheim and Trond Randøy

This study examines globalization of monitoring practices by focusing on how American (U.S.) influences on European firms impact the dismissal risk for these firms' CEOs.  Specifically, we argue that the stronger short term orientation of the…


957. Heterogeneous Firms, Globalization and the Distance Puzzle

Mario Larch, Pehr-Johan Norbäck, Steffen Sirries and Dieter Urban

Despite the strong pace of globalization, the distance effect on trade is persistent or even growing over time (Disdier and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman, Melitz and…


956. Taxation of Goods and Services in Sweden (1862 to 2013)

Mikael Stenkula

This paper presents annual Swedish time-series data regarding consumption taxes, i.e., the indirect taxation of goods and services, for the 1862–2013 period. As a share of total state tax revenue, consumption tax revenue was high at the beginning of…


955. Ethnic Diversity and Preferences for Redistribution: Reply

Matz Dahlberg, Karin Edmark and Helene Lundqvist

In a comment to Dahlberg, Edmark and Lundqvist (2012), Nekby and Pettersson-Lidbom (2012) argue (i) that the refugee placement program should be measured with contracted rather than actually placed refugees, and claim that the correlation between the two…


954. Hierarchies and Entrepreneurship

Joacim Tåg, Thomas Åstebro and Peter Thompson

We establish a correlation between the hierarchical structure of a firm and the likelihood of business creation among its former employees, using a sample of 16 million observations of Swedish workers and a novel proxy for hierarchies based on occupation…


953. Market Specific News and Its Impact on Electricity Prices – Forward Premia

Ewa Lazarczyk

This paper studies the impact of market specific news on the short-time forward premia on the Scandinavian electricity market. I show that the short time premia between the day-ahead and intra-day electricity prices on the Scandinavian market can be…


952. Employment Protection and Parental Child Care

Martin Olsson

I examine if employment protection affects parental childcare. I find that a softer employment protection has a substantial effect on how parents use and divide paid childcare between them. The identification relies on a reform that made it easier for…


951. On the Internationalization of Corporate Boards

Lars Oxelheim, Aleksandra Gregorič, Trond Randøy and Steen Thomsen

Despite the global reach of their commercial activities, many multinational firms have proved slow in internationalizing their boards of directors. Based on a panel study of the internationalization of the boards of 347 non-financial firms from the Nordic…


950. Re-Coinage as a Monetary Tax: Conditions, Consequences and Comparisons with Debasement

Roger Svensson

Re-coinage implies that old coins are declared invalid and exchanged for new ones at fixed exchange rates and dates. Empirical evidence shows that re-coinage could occur as often as twice a year within a currency area in the Middle Ages. The exchange fee…


949. Effects of Competition between Healthcare Providers on Prescription of Antibiotics

Sara Fogelberg

The introduction of antibiotics as a medical treatment after World War II helped to dramatically increase life expectancy in the industrialized world. However, over-prescription of antibiotics during the last few decades has led to a sharp increase in…


948. The Evolving Domain of Entrepreneurship Research

Bo Carlsson, Pontus Braunerhjelm, Maureen McKelvey, Christer Olofsson, Lars Persson and Håkan Ylinenpää

Research on entrepreneurship has flourished in recent years and is evolving rapidly. This paper explores the history of entrepreneurship research, how the research domain has evolved, and its current status as an academic field. The need to concretize…

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