Economics

The use of the social accounting matrix (SAM) in income distribution analysis is a method recommended by economists. However, until now, there have only been a few SAM developed in Malaysia. The last SAM produced for Malaysia was developed in 1984 based upon data from 1970 and has not been updated since this time despite the significance changes in the structure of the Malaysian economy. The paper proposes a new Malaysian SAM framework to analyse public expenditure impact on income distribution in Malaysia. The SAM developed in the present paper is based on more recent data, providing an up-to date and coherent picture of the complexity of the Malaysian economy. The paper describes the structure of the SAM framework with a detailed aggregation and disaggregation of accounts related to public expenditure and income distribution issues. In the SAM utilized in the present study, the detailed framework of the different components of public expenditure in the production sectors and household groups is essential in the analysis of the different effects of the various public expenditure programmes on the incomes of households among different groups.

Ad exchanges, i.e., platforms where real-time auctions for ad impressions take place, have developed sophisticated technology and data ecosystems to allow advertisers to target users, yet advertisers may not know which sites their ads appear on, i.e., the ad context. In practice, ad exchanges can require publishers to provide accurate ad placement information to ad buyers prior to submitting their bids, allowing them to adjust their bids for ads at specific domains, subdomains or URLs. However, ad exchanges have historically been reluctant to disclose placement information due to fears that buyers will start buying ads only on the most desirable sites leaving inventory on other sites unsold and lowering average revenue. This paper explores the empirical effect of ad placement disclosure using a unique data set describing a change in context information provided by a major private European ad exchange. Analyzing this as a quasi-experiment using diff-in-diff, we find that average revenue per impression rose when more context information was provided. This shows that ad context information is important to ad buyers and that providing more context information will not lead to deconflation. The exception to this are sites which had a low number of buyers prior to the policy change; consistent with theory, these sites with thin markets do not show a rise in prices. Our analysis adds evidence that ad exchanges with reputable publishers, particularly smaller volume, high quality sites, should provide ad buyers with site placement information, which can be done at almost no cost.

The main advantage of wind and solar power plants is the power production free of CO2. Their main disadvantage is the volatility of the generated power. According to the estimates of H.-W. Sinn[1], suppressing this volatility requires pumped-storage plants with a huge capacity, several orders of magnitude larger than the present available capacity in Germany[2]. Sinn concluded that wind-solar power can be used only together with conventional power plants as backups. However, based on German power data[3] of 2019 we show that the required storage capacity can significantly be reduced, provided i) a surplus of wind-solar power plants is supplied, ii) smart meters are installed, iii) partly a different kind of wind turbines and solar panels are used in Germany. Our calculations suggest that all the electric energy, presently produced in Germany, can be obtained from wind-solar power alone. And our results let us predict that wind-solar power can be used to produce in addition the energy for transportation, warm water, space heating and in part for process heating, meaning an increase of the present electric energy production by a factor of about 5[1]. Of course, to put such a prediction on firm ground the present calculations have to be confirmed for a period of many years. And it should be kept in mind, that in any case a huge number of wind turbines and solar panels is required.

Does COVID-19 change the willingness to cooperate? Four Austrian university courses in economics play a public goods game in consecutive semesters on the e-learning platform Moodle: two of them in the year before the crisis, one immediately after the beginning of the first lockdown in March 2020 and the last one in the days before the announcement of the second lockdown in October 2020. Between 67% and 76% of the students choose to cooperate, i.e. contribute to the public good, in the pre-crisis year. Immediately after the imposition of the lockdown, 71% choose to cooperate. Seven months into the crisis, however, cooperation drops to 43%. Depending on whether two types of biases resulting from the experimental design are eliminated or not, probit and logit regressions show that this drop is statistically significant at the 0.05 or the 0.1 significance level.

We investigate the allegation that legacy U.S. airlines communicated via earnings calls to coordinate with other legacy airlines in offering fewer seats on competitive routes. To this end, we first use text analytics to build a novel dataset on communication among airlines about their capacity choices. Estimates from our preferred specification show that the number of offered seats is 2% lower when all legacy airlines in a market discuss the concept of "capacity discipline." We verify that this reduction materializes only when legacy airlines communicate concurrently, and that it cannot be explained by other possibilities, including that airlines are simply announcing to investors their unilateral plans to reduce capacity, and then following through on those announcements.

We provide one of the first systematic assessments of the development and determinants of economic anxiety at the onset of the coronavirus pandemic. Using a global dataset on internet searches and two representative surveys from the US, we document a substantial increase in economic anxiety during and after the arrival of the coronavirus. We also document a large dispersion in beliefs about the pandemic risk factors of the coronavirus, and demonstrate that these beliefs causally affect individuals' economic anxieties. Finally, we show that individuals' mental models of infectious disease spread understate non-linear growth and shape the extent of economic anxiety.

We present a systematic approach to effectively evaluate potential risk cost caused by exposure to solar proton events (SPEs) from solar flares for the airline industry. We also evaluate associated health risks from radiation, to provide relevant alternative ways to minimize economic loss and opportunity. The estimated radiation dose induced by each SPE for the passengers of each flight is calculated using ExoKyoto and PHITS. We determine a few scenarios for the estimated dose limit at 1 and 20mSv, corresponding to the effective dose limit for the general public and occupational exposure, respectively, as well as a higher dose induced an extreme superflare. We set a hypothetical airline shutdown scenario at 1mSv for a single flight per passenger, due to legal restrictions under the potential radiation dose. In such a scenario, we calculate the potential loss in direct and opportunity cost under the cancelation of the flight. At the same time, we considered that, even under such a scenario, if the airplane flies at a slightly lower altitude (from 12 to 9.5km: atmospheric depth from 234 to 365g/cm 2 ), the total loss becomes much smaller than flight cancelation, and the estimated total dose goes down from 1.2 to 0.45mSv, which is below the effective dose limit for the general public. In case of flying at an even lower altitude (7km: atmospheric depth 484g/cm 2 ), the estimated total dose becomes much smaller, 0.12 mSv. If we assume the increase of fuel cost is proportional to the increase in atmospheric depth, the increase in cost becomes 1.56 and 2.07 for the case of flying at 9.5 km and at 7 km, respectively. Lower altitude flights provide more safety for the potential risk of radiation doses induced by severe SPEs. At the same time, since there is total loss caused by flight cancelation, we propose that considering lower flight altitude is the best protection against solar flares.

I critique a recent analysis (Miles, Stedman & Heald, 2020) of COVID-19 lockdown costs and benefits, focussing on the United Kingdom (UK). Miles et al. (2020) argue that the March-June UK lockdown was more costly than the benefit of lives saved, evaluated using the NICE threshold of £30000 for a quality-adjusted life year (QALY) and that the costs of a lockdown for 13 weeks from mid-June would be vastly greater than any plausible estimate of the benefits, even if easing produced a second infection wave causing over 7000 deaths weekly by mid-September. I note here two key problems that significantly affect their estimates and cast doubt on their conclusions. Firstly, their calculations arbitrarily cut off after 13 weeks, without costing the epidemic end state. That is, they assume indifference between mid-September states of 13 or 7500 weekly deaths and corresponding infection rates. This seems indefensible unless one assumes that (a) there is little chance of any effective vaccine or improved medical or social interventions for the foreseeable future, (b) notwithstanding temporary lockdowns, COVID-19 will very likely propagate until herd immunity. Even under these assumptions it is very questionable. Secondly, they ignore the costs of serious illness, possible long-term lowering of life quality and expectancy for survivors. These are uncertain, but plausibly at least as large as the costs in deaths. In summary, policy on tackling COVID-19 cannot be rationally made without estimating probabilities of future medical interventions and long-term illness costs. More work on modelling these uncertainties is urgently needed.

We present a model for the equilibrium frequency of offenses and the informativeness of witness reports when potential offenders can commit multiple offenses and witnesses are subject to retaliation risk and idiosyncratic reporting preferences. We compare two ways of handling multiple accusations discussed in legal scholarship: (i) When convictions are based on the probability that the defendant committed at least one, unspecified offense and entail a severe punishment, potential offenders induce negative correlation in witnesses' private information, which leads to uninformative reports, information aggregation failures, and frequent offenses in equilibrium. Moreover, lowering the punishment in case of conviction can improve deterrence and the informativeness of witnesses' reports. (ii) When accusations are treated separately to adjudicate guilt and conviction entails a severe punishment, witness reports are highly informative and offenses are infrequent in equilibrium.

Within national and international innovation systems a pandemic calls for large-scale action by many actors across sectors, to mobilise resources, developing and manufacturing Crisis-Critical Products (CC-Products) efficiently and in the huge quantities needed. Nowadays, this also includes digital innovations from complex epidemiological models, AI, to open data platforms for prevention, diagnostic and treatment. Amongst the many challenges during a pandemic, innovation and manufacturing stakeholders find themselves engaged in new relationships, and are likely to face intellectual property (IP) related challenges. This paper adopts an IP perspective on the COVID-19 pandemic to identify pandemic related IP considerations and IP challenges. The focus is on challenges related to research, development and urgent upscaling of capacity to manufacture CC-Products in the huge volumes suddenly in demand. Its purpose is to provide a structure for steering clear of IP challenges to avoid delays in fighting a pandemic. We identify 4 stakeholder groups concerned with IP challenges: (i) governments, (ii) organisations owning existing Crisis-Critical IP, described as incumbents in Crisis-Critical Sectors (CC-Sectors), (iii) manufacturing firms from other sectors normally not producing CC-Products suddenly rushing into CC-Sectors to support the manufacturing of CC-Products (new entrants), and (iv) voluntary grassroot initiatives that are formed during a pandemic. This paper discusses IP challenges related to the development and manufacturing of technologies and products for (i) prevention (of spread), (ii) diagnosis of infected patients and (iii) the development of treatments. We offer an initial discussion of potential response measures to reduce IP associated risks among industrial stakeholders during a pandemic.