Working papers

Permanent URI for this collectionhttps://gupea-staging.ub.gu.se/handle/2077/821

Browse

Now showing 1 - 20 of 858

Just the right amount of caution? Remote instruction and student performance in Sweden during the COVID-19 pandemic
(University of Gothenburg, 2025-09) Hall, Caroline; Lindskog, Annika; Lundin, Martin; Department of Economics; JEL-codes: I21; I28
The impact of politicized and costly climate policies on trust in scientific information and policy support
(Gothenburg University, 2025-08) Carlsson, Fredrik; Kataria, Mitesh; Lampi, Elina
We investigate how politicization and the financial cost of climate policies influence public trust in scientific information about climate change. We find that citizens' trust in science-based information on climate is influenced by its political context. When climate policy is associated with a political affiliation, trust in the scientific information decreases, independent of the political party supporting the policy. However, there is no effect on policy support on political endorsement. Varying the financial cost of the policy to induce cognitive dissonance had no significant effect on trust in the scientific information; instead, as expected, higher cost substantially reduced policy support.
Winning ways: How rank-based incentives shape risk-taking decisions
(2025-04-07) Fang, Dawei; Ke, Changxia; Kubitz, Greg; Liu, Yang; Noe, Thomas; Page, Lionel; Department of Economics, University of Gothenburg
Risk-taking spurred by rank-based contest rewards can have enormous consequences, from breakthrough innovations in research competitions to hedge fund collapses engendered by risky bets aimed at raising league-table rankings. This paper provides a novel theoretical and experimental framework of rank-motivated risk-taking that both allows for complex prize structures and permits participants to make arbitrary mean-preserving changes to their random performance. As predicted by our theory, participants choose positively skewed performance under highly convex prize schedules and negatively skewed performance under concave ones. Convexifying the prize schedule or increasing competition for identical winner prizes induces riskier and more skewed performance.
Reverse Auctions to Procure Negative Emissions at Industrial Scale
(2025-04-28) Burtraw, Dallas; Holt, Charles; Löfgren, Åsa; Shobe, William; Department of Economics, University of Gothenburg
Many climate solutions including carbon dioxide removal (CDR) technologies require investments in capital intensive technologies that require large capacity investments and exhibit modest unit costs. Governments seeking to achieve net zero goals may invest directly in CDR to procure negative emissions credits to offset emissions in hard-to-abate sectors such as agriculture. In a procurement auction for a declining cost industry, the optimal allocation will generally require all winning bidders operating at full capacity. Because of the lumpy nature of investments, this may not fit within the government’s budget, leaving one or more winning bidders at the margin, operating at less than full capacity, and consequently with higher average costs. Protection can be provided to the marginal bidder by letting bids specify a range of acceptable quantities up to full capacity. The auction can be executed with sealed bids (specifying prices with associated minimum quantities) or by having the proposed bid price be lowered sequentially in a “clock auction” with quantity intervals specified by bidders at the current clock price. We consider the performance of sealed bid and clock auctions, in the presence of 1) a fixed government procurement budget, 2) “common value” uncertainty about the true per-unit production cost, and 3) the presence of a large, fixed cost. Laboratory experiment simulations with financially motivated human subjects are valuable for testing and developing auction designs that have never been used before, without relying on theoretical properties that depend on strong assumptions of perfect cost information and “truthful bidding.” Preliminary experiment results indicate that winner’s curse effects (bidder losses) are infrequent in both auction formats (clock and sealed bid), but the clock tends to restrict bidder profits in a manner that reduces the average cost for the buyer of the “units” representing CDR. Our experiments are informed by the projected use of auctions by the government of Sweden to procure carbon capture and sequestration from its domestic wood products and energy industry.
Long-Run Stock Return Distributions: Empirical Inference and Uncertainty
(2025-04-25) Andreas, Dzemski; Adam, Farago; Erik, Hjalmarsson; Tamas, Kiss; Department of Economics, University of Gothenburg
We analyze empirical estimation of the distribution of total payoffs for stock investments over very long horizons, such as 30 years. Formal results for recently proposed bootstrap estimators are derived and alternative parametric methods are proposed. All estimators should be viewed as inconsistent for longer investment horizons. Valid confidence bands are derived and should be the focus when performing inference. Empirically, confidence bands around long-run distributions are very wide and point estimates must be interpreted with great caution. Consequently, it is difficult to distinguish long-run aggregate return distributions across countries; long-run U.S. returns are not significantly different from global returns.
Inference on effect size after multiple hypothesis testing
(University of Gothenburg, 2025-04-01) Dzemski, Andreas; Okui, Ryo; Wang, Wenjie; Department of Economics
Significant treatment effects are often emphasized when interpreting and summarizing empirical findings in studies that estimate multiple, possibly many, treatment effects. Under this kind of selective reporting, conventional treatment effect estimates may be biased and their corresponding confidence intervals may undercover the true effect sizes. We propose new estimators and confidence intervals that provide valid inferences on the effect sizes of the significant effects after multiple hypothesis testing. Our methods are based on the principle of selective conditional inference and complement a wide range of tests, including step-up tests and bootstrap-based step-down tests. Our approach is scalable, allowing us to study an application with over 370 estimated effects. We justify our procedure for asymptotically normal treatment effect estimators. We provide two empirical examples that demonstrate bias correction and confidence interval adjustments for significant effects. The magnitude and direction of the bias correction depend on the correlation structure of the estimated effects and whether the interpretation of the significant effects depends on the (in)significance of other effects.
Location Characteristics of Conditional Selective Confidence Intervals via Polyhedral Methods
(2025-03-20) Dzemski, Andreas; Okui, Ryo; Wang, Wenjie; Department of Economics, University of Gothenburg
We examine the location characteristics of a conditional selective confidence interval based on the polyhedral method. This interval is constructed from the distribution of a test statistic conditional upon the event of statistical significance. In the case of a one-sided test, the behavior of the interval varies depending on whether the parameter is highly significant or only marginally significant. When the parameter is highly significant, the interval is similar to the usual confidence interval derived without considering selection. However, when the parameter is only marginally significant, the interval falls into an extreme range and deviates greatly from the estimated value of the parameter. In contrast, an interval conditional on two-sided significance does not yield extreme results, although it may exclude the estimated parameter value.
The Political Economy of Bread and Circuses: Weather Shocks and Classic Maya Monument Construction
(University of Gothenburg, 2024-11-18) Rubio-Ramos, Melissa; Isendahl, Christian; Olsson, Ola; Department of Economics
In early states, government elites provided both productivity-enhancing infrastructure, such as irrigation systems, as well as seemingly non-productive monumental architecture like temples and pyramids. The nature of this ”bread-and-circuses”-tradeoff is not well understood. In this paper, we examine this phenomenon in the Classic Maya civilization (c. 250-950 CE) where city-state elites chose between investing in essential water management infrastructure (reservoirs, canals), and monumental architecture. We analyze information from 870 dated monuments from 110 cities. Correlating this dataset with a proxy record for variations in annual rainfall, we find–perhaps counter-intuitively–that monumental construction activity was more intense during drought years. A text analysis of 2.2 million words from deciphered hieroglyphic inscriptions on monuments, further shows higher frequencies of terms associated with war or violent conflict during periods of drought. We propose that in the Classic Maya setting, with numerous small city-states, monument construction functioned as a costly signaling device about state capacity, designed to attract labor for future control of revenue.
Female empowerment and male backlash: Experimental evidence from India
(2024-11) Cullen, Claire; Sarthak, Josh; Vecci, Joseph; Talbot-Jones, Julia; Department of Economics, University of Gothenburg
Public spending on gender equality and women’s empowerment is rising rapidly in many countries. However, the unintended consequences of women’s empowerment is rarely measured and remains poorly understood. We study the impact of female empowerment programs on male backlash through a series of experiments involving 1,007 households in rural India. The paper has four key parts. First, we use an experiment to measure backlash, observing men’s decisions to financially penalize women who participated in empowerment programs.We find that men pay to punish empowered women at double the rate of women in an otherwise identical control group (17 percent versus 8 percent). We also show that men engaging in backlash tend to hold more conservative gender attitudes and are more likely to accept or commit intimate partner violence. Second, we test multiple theories on the conditions that trigger backlash and find that backlash occurs regardless of how women become empowered. Third, we examine social image concerns as a potential behavioral mechanism and find that 18 percent of men are willing to pay to conceal their household’s involvement in empowerment programs. Those who choose to conceal are more likely to engage in backlash, suggesting that reputational concerns play a key role in driving this behavior. Finally, we test several policies to reduce backlash and find that reframing empowerment programs to emphasize broader community benefits can help mitigate backlash.
Can teaching children about the environment influence household behavior? Experiments in Swedish schools
(2024-10-30) Ek, Claes; Söderberg, Magnus; Kataria, Mitesh; Department of Economics, University of Gothenburg
In two separate field experiments with Swedish school children aged 10-16, we evaluate variants of an Environmental Education Program (EEP) designed to reduce household waste. We match the addresses of participating students with high-resolution municipal administrative records on collected household waste. This allows us to estimate causal effects on the waste generated in households where a child was treated. Both experiments produce null effects on waste generation. In the second experiment, we are also able to estimate the effect of regular environmental education within the Swedish school curriculum, and find only weak evidence that this affects household waste.
Geographical Cross-Collateralization, Universal Coverage, and Co-Investment Policy
(2024-09) Bouckaert, Jan; Stennek, Johan; Department of Economics
We argue that geographical cross-collateralization – a firm’s ability to pledge incomes earned in more populated areas as “collateral” for the loans needed to finance in- vestments in less populated areas – plays an important role for ensuring universal coverage of next generation communication networks. Our main result is that when firms are capital-constrained, co-investments in urban areas enhance geographical cross-collateralization and thus contribute to universal service through increased coverage for rural consumers. Co-investment may, in addition, introduce retail com- petition to the benefits of sub-urban consumers. The catch is that urban consumers may suffer from lower infrastructure competition. Co-investment policy therefore may raise tradeoffs between consumers in different (relevant) geographical markets.
The Impact of PhD Studies on Mental Health—A Longitudinal Population Study
(University of Gothenburg, 2024-09) Bergall, Sanna; Fernström, Clara; Ranehill, Eva; Sandberg, Anna; Department of Economics
Recent self-reported and cross-sectional survey evidence documents high levels of mental health problems among PhD students. We study the impact of PhD studies on mental health care uptake using Swedish administrative records of prescriptions for psychiatric medication for the full population of PhD students. First, we provide descriptive evidence that PhD students collect psychiatric medication at a higher rate than a matched sample of individuals holding a master’s degree, but at a lower rate than a matched sample from the general population. Second, we implement an event study analysis and document that, in the years preceding their PhD studies, prospective students collect psychiatric medication at a rate similar to that of a matched sample of individuals holding a master’s degree. However, following the start of PhD studies, the use of psychiatric medication among PhD students increasessubstantially. This upward trend continues throughout the course of PhD studies, with estimates showing a 40 percent increase by the fifth year compared to pre-PhD levels. After the fifth year, which represents the average duration of PhD studies in our sample, we observe a notable decrease in the utilization of psychiatric medication.
Gender Identity and Economic Decision Making
(University of Gothenburg, 2024-09) Ardila Brenoe, Anne; Eyibak, Zeynep; Heursen, Lea; Ranehill, Eva; Weber, Robert A; Department of Economics
Economic research on gender gaps in preferences and economic outcomes has focused on variation with respect to sex—a binary classification as either a “man” or “woman.” We validate a novel and simple measure of self-reported continuous gender identity (CGI) and explore whether gender identity correlates with variation in economic decisions and outcomes beyond the relationship with binary sex. We use four datasets (N=8,073) measuring various dimensions of economic preferences and educational and labor market outcomes for which prior research has documented gaps between men and women. Our analysis rejects the null hypothesis that CGI has no relationship with behaviors and preferences beyond the relationship with binary sex, particularly for men, and suggests that incorporating self-reported measures of gender identity may have value for understanding gender gaps and for targeting policy. However, when considering specific domains, the relationships vary in statistical significance and are often small.
Motherhood and Domestic Violence: A Longitudinal Study Using Population Wide Administrative Data
(University of Gothenburg, 2024-09) Bergvall, Sanna; Rodriguez-Planas, Nuria; Department of Economics
Most empirical studies indicate that becoming a mother is an augmenting factor for the perpetration of intimate partner violence (IPV). Using rich population-wide hospital records data from Sweden, we conduct a stacked DiD analysis comparing the paths of women two years before and after the birth of their first child with same-age women who are several quarters older when giving birth to their first child and find that, in contrast to the consensus view, violence sharply decreases with pregnancy and motherhood. This decline has both a short-term and longer-term component, with the temporary decline in IPV covering most of the pregnancy until the child is 6 months old, mimicking a temporary decrease in hospital visits for alcohol abuse by the children’s fathers. The more persistent decline is driven by women who leave the relationship after the birth of the child. Our evidence is not supportive of alternative mechanisms including suspicious hospitalizations, an overall reduction in hospital visits or selection in seeking medical care, mothers’ added value as the main nurturer, or mothers’ drop in relative earnings within the household. Our findings suggest the need to push for public health awareness campaigns underscoring the risk of victimization associated with substance abuse and to also provide women with more support to identify and leave a violent relationship.
A Dual Approach to the Derivation of Feedback Demand Functions for Capital-Accumulating Agents
(University of Gothenburg, 2024-05) Bolin, Kristian; Caputo, Michael R.; Department of Economics
An optimal control model of a consumer is developed that accounts for the consumption of many goods and services, the accumulation of wealth, a state variable that affects instantaneous preferences and wealth accumulation, and contains several canonical models as special cases. Formulas are provided for the feedback consumption functions in terms of certain partial derivatives of a consumer’s lifetime indirect utility function, thereby obviating the need to solve the necessary conditions of Pontryagin or the Hamilton-Jacobi-Bellman equation. The intrinsic qualitative properties of the optimal control model in differential form are derived, and an example of how to implement the results for econometric purposes is provided as well.
Nudges and Monetary Incentives: A Green Partnership?
(University of Gothenburg, 2024-03) Maris, Robbie; Dorner, Zack; Carlsson, Fredrik; Department of Economics, Gothenburg University
Shifting individual behaviour is an important tool for addressing environmental issues and there is a wide literature evaluating interventions to encourage pro-environmental behaviour. One important but under-researched area is the effect of combining interventions to affect behaviour. In this paper, we evaluate the effects of two interventions – monetary incentives and nudges – on nature restoration volunteering. We use a two-by-two treatment design to evaluate the individual and combined effects of the interventions in a field experiment setting. We find that the monetary incentive significantly increases volunteering behaviour, despite concerns incentives may crowd out motivation, but that nudging alone is ineffective at shifting behaviour. However, there are considerable positive synergies between the monetary incentive and nudge. The monetary incentive becomes more than twice as effective when it is combined with a nudge. We find support for our theoretical prediction that this synergy arises because the nudge reduces motivational crowding out effects from the incentive. Our results have important policy implications, showing that concerns around motivation crowding out from monetary incentives could be mitigated by simple, low-cost nudges.
How Much Liberty Should We Have? Citizens versus Experts on Regulating Externalities and Internalities
(University of Gothenburg, 2024-01) Carlsson, Fredrik; Johansson-Stenman, Olof; Kataria, Mitesh; Department of Economics, University of Gothenburg
Based on a tailor-made survey, we find that experts – academics and civil servants – are much more willing than citizens in Sweden to accept liberty-reducing regulations. Moreover, both citizens and experts are more supportive of regulating negative internalities (in terms of health) than negative externalities (in terms of climate change). While less liberty-reducing policy instruments receive more support, around 20 percent of citizens and experts support very intrusive measures such as non-transferable individual quotas for air travel and unhealthy foods. Both experts and citizens prefer encouraging to discouraging information provision, while experts are more positive than citizens to tax instruments
Child Labour Background, Challenges, and the Role of Research in Achieving Sustainable Development Goal 8.7
(Gothenburg University, 2024-01) Congdon Fors, Heather; Department of Economics, Gothenburg University
The focus of this report is on child labour, which is a main component of Sustainable Development Goal (SDG) 8.7. After providing a brief background on child labour, this report provides an overview of the factors that research has identified as main contributors to child labor, categorized broadly as either microeconomic factors, macroeconomic factors, or other household factors. Microeconomic factors include household poverty, market imperfections, and the role of education in shaping outcomes while macroeconomic factors include economic growth and globalization. Other relevant parental and household factors are also discussed, such as altruism and cultural norms. The report next provides an overview of policies aimed at combating child labor, including policies related to the legal framework, poverty reduction initiatives, and access to education. A critical evaluation of the indicator used to measure child labor is conducted, focusing on standardization, measurement accuracy, conceptualization, and areas for potential improvement. Finally, the report identifies major challenges faced in eradicating child labor.
Saddlepoint approximations for credit portfolio distributions with applications in equity risk management
(University of Gothenburg, 2023-12) Herbertsson, Alexander; Department of Economics, University of Gothenburg
We study saddlepoint approximations to the tail-distribution for credit portfolio losses in continuous time intensity based models under conditional independent homogeneous settings. In such models, conditional on the filtration generated by the individual default intensity up to time t, the conditional number of defaults distribution (in the portfolio) will be a binomial distribution that is a function of a factor Z_t which typically is the integrated default intensity up to time t. This will lead to an explicit closed-form solution of the saddlepoint equation for each point used in the number of defaults distribution when conditioning on the factor Z_t, and we hence do not have to solve the saddlepoint equation numerically. The ordo-complexity of our algorithm computing the whole distribution for the number of defaults will be linear in the portfolio size, which is a dramatic improvement compared to e.g. recursive methods which have a quadratic ordo-complexity in the portfolio size. The individual default intensities can be arbitrary as long as they are conditionally independent given the factor Z_t in a homogeneous portfolio. We also outline how our method for computing the number of defaults distribution can be extend to heterogeneous portfolios. Furthermore, we show that all our results can be extended to hold for any factor copula model. We give several numerical applications and in particular, in a setting where the individual default intensities follow a CIR process we study both the tail distribution and the number of defaults distribution. We then repeat similar numerical studies in a one-factor Gaussian copula model. We also numerically benchmark our saddlepoint method to other computational methods. Finally, we apply of our saddlepoint method to efficiently investigate Value-at-Risk for equity portfolios where the individual stock prices have simultaneous downward jumps at the defaults of an exogenous group of defaultable entities driven by a one-factor Gaussian copula model were we focus on Value-at-Risk as function of the default correlation parameter in the one-factor Gaussian copula model.
Encouraging adoption of fuel-efficient vehicles – A policy reform evaluation from Ethiopia
(University of Gothenburg, 2023-11) Tesemma, Tewodros; ; Department of Economics, University of Gothenburg
The extent of vehicle ownership is increasing in many developing countries. Most of the increase takes place through import of second-hand vehicles that are usually fuel-inefficient and have poor emissions standards. This is creating enormous environmental pressures, since most developing countries also lack the necessary policies to regulate the sector. This study investigates the effect of a recent policy reform in Ethiopia that aimed at encouraging adoption of cleaner vehicles. In March 2020, Ethiopia introduced a new vehicle excise tax that linked the excise tax rate to engine size and age of vehicles, imposing lower rates on ‘fuel-efficient’ vehicles and higher rates on ‘fuel-inefficient’ ones. Exploiting the quasiexperimental nature of the reform and employing a difference-in-differences design, the study investigates the reform’s effect on vehicle ownership and composition of the vehicles, and in reducing CO2 emissions. The results show that while the reform has no significant effect on total vehicle ownership, it has a significant effect in increasing the adoption of newer vehicles. We also find no significant increase in the adoption of smaller-engine vehicles. The reformled to no significant reduction on CO2 emissions intensity of the vehicles. The reform, however, significantly increased adoption of small-engine but new vehicles - relatively the most ‘fuel-efficient’ alternatives. The results are robust to various robustness checks. The study discusses the policy implications of the results, especially for developing countries.

Browse

Recent Submissions