Gregor Pfeifer

The incidence of Cash for Clunkers: an analysis of the 2009 car scrappage scheme in Germany

Governments all over the world have invested tens of billions of dollars in car scrappage programs to fuel the economy in 2009. We investigate the German case using a unique micro transaction dataset covering the years 2007 to 2010. Our focus is on the incidence of the subsidy, i.e., we ask how much of the € 2,500 buyer subsidy is captured by the supply-side through an increase in selling prices. Using regression analysis, we find that average prices in fact decreased for subsidized buyers in comparison to non-subsidized ones, suggesting that eventually subsidized customers benefitted by more than the subsidy amount. However, the incidence was heterogeneous across price segments. Subsidized buyers of cheap cars paid more than comparable buyers who did not receive the subsidy, e.g. for cars of € 12,000 car dealers reaped about 8% of the scrappage prime. The opposite was true for more expensive cars, e.g. subsidized buyers of cars of € 32,000 were granted an extra discount of about € 1,100. For cars priced about € 18,000, we find no price discrimination, i.e., in this price segment consumers fully captured the transfer. Our results can be explained by optimizing behavior on the supply-side both in the lower and upper price segments. The results are extremely robust to extensive sensitivity checks.

Comparative politics and the synthetic control method revisited: a note on Abadie et al. (2015)

Recently, Abadie et al. (Am J Polit Sci 59:495–510, 2015) have expanded synthetic control methods by the so-called cross-validation technique. We find that their results are not being reproduced when alternative software packages are used or when the variables’ ordering within the dataset is changed. We show that this failure stems from the cross-validation technique relying on non-uniquely defined predictor weights. While the amount of the resulting ambiguity is negligible for the main application of Abadie et al. (Am J Polit Sci 59:495–510, 2015), we find it to be substantial for several of their robustness analyses. Applying well-defined, standard synthetic control methods reveals that the authors’ results are particularly driven by a specific control country, the USA.

Outside the box: using synthetic control methods as a forecasting technique

ABSTRACT We introduce synthetic control methods (SCM) as a forecasting technique. Using (i) as economic predictors solely the outcome itself, i.e. lagged values of the dependent variable, and (ii) lagged time series of the outcome to build the donor pool, we let SCM choose and weight appropriate values in order to come up with a sensible forecast of the US GDP growth. This procedure performs competitively viable compared with alternative forecasting methods.

The Importance of Tax Adjustments when Evaluating Wage Expectations

Using elicited expectations of future gross salaries, we evaluate characteristics causing German students to make larger or smaller estimation errors. While students seem to underestimate actual salaries by 18 percent, we show that these errors are highly attributable to misconceptions of the progressive income tax. Developing a suitable adjustment procedure, we correct students’ estimates and find that errors decline by 12 percentage points. Conducting regression analyses, we reveal strong connections with students’ age, gender, work experience, secondary school track, and knowledge about student loans. These results change notably if not controlling for students’ misconceptions of the tax system.

Illuminating the world cup effect: Night lights evidence from South Africa

This paper evaluates the economic impact of the

Skaleneffekte bei Verwaltungs- und Verfahrenskosten der Unfallversicherungsträger der öffentlichen Hand

14 billion preparatory investments for the 2010 FIFA World Cup in South Africa. We use satellite data on night light luminosity at municipality and electoral district level as a proxy for economic development, applying synthetic control methods for estimation. For the average World Cup municipality, we find significantly positive, short-run effects before the tournament, corresponding to a reduction of unemployment by 1.3 percentage points. At the electoral district level, we reveal distinct effect heterogeneity, where especially investments in transport infrastructure are shown to have long-lasting, positive effects, particularly in more rural areas.

Synthetic Control Methods: Never Use All Pre-Intervention Outcomes as Economic Predictors

Die gesetzliche Unfallversicherung wurde im Rahmen des Unfallversicherungsmodernisierungsgesetzes (UVMG) zum 1.1.2009 grundlegend reformiert. Ein wesentliches Ziel der Reformen war es, durch Fusionen der Versiche-rungstrager die Verwaltungs- und Verfahrenskosten je Versicherten zu reduzieren, also Skaleneffekte zu realisieren. Allerdings gab es zum Zeitpunkt der Reform keinerlei empirische Evidenz, dass bedeutsame Skaleneffekte zu erwar-ten waren. Basierend auf Daten der Jahre 1998-2007 wird die Frage untersucht, ob grose Unfallkassen geringere Verwaltungs- und Verfahrenskosten je Versicherten aufwenden mussen als kleine. Mittels Paneldatenanalyse kann uber mehrere Spezifikationen hinweg robust gezeigt werden, dass die Hohe der Verwaltungs- und Verfahrenskos-ten je Versicherten negativ von der Grose des Tragers (gemessen durch die Anzahl der Versicherten) abhangt. Im statistischen Mittel sinken die Verwaltungs- und Verfahrenskosten je Versicherten um ca. 33 Cent, wenn die Anzahl der Versicherten um 100.000 zunimmt. Bei mittleren Kosten von ca. 6,54 € je Versicherten uber den betrachteten Zeitraum und durchschnittlich 960.000 Versicherten je Unfallkasse ist dieses Einsparpotential erheblich. Bei einer Steigerung der Kassengrose um ca. 600.000 Versicherte (um eine Standardabweichung) besteht damit ein Einspar-potenzial von ca. 30%.