This paper analyses how institutional factors affect satisfaction with democracy (SWD). It employs a panel of observations from Eurobarometers in the time span 1990-2000, and thus is one of the first studies to consider the longitudinal dimension of the driving forces of SWD. We find that...

In this note we model the individual decision on income underreporting in a system with a negative income tax. We show that a change in the tax rate has opposing effects on the compliance behavior of the poor and the rich.

We use data on announced and actual exchange rate arrangements to ask which countries follow de facto regimes different from their de iure ones, that is, do not do what they say. Our results suggest that countries with poor institutional quality have difficulty in maintaining pegging and abandon...

This paper analyzes the pricing of issuer credit risk in retail structured products. After the default of Lehman Brothers, investors are compensated for the counterparty risk they bear if the products are not constructed to provide an implicit “credit enhancement", i.e., if they do not feature...

A principal provides budgets to agents (e.g., divisions of a firm or the principal’s children) whose expenditures provide her benefits, either materially or because of altruism. Only agents know their potential to generate benefits. We prove that if the more “productive” agents are also...

Economists have expended considerable effort to develop economically meaningful definitions of the somewhat elusive concept of "sustainability." We relate such a definition of sustainability to well known concepts from neoclassical economics, in particular, potential Pareto improvements (in the...

We develop and apply a new method for estimating the economic benefits of an environmental amenity. The method is based upon the notion of estimating the derived demand for a privately traded option to utilize an open access good. In particular, the demand for state fishing licenses is used to...