This paper demonstrates that institutional factors influence the subjective well-being of individuals differently in rich versus poor countries. A lower level of corruption, a more democratic government and better civil rights increase the well-being of individuals in rich countries, whereas an increase in per capita income has no impact. On the contrary, in poor countries the extent of corrupt...

This paper considers a model of defensive medicine where doctors are imperfect agents of insured patients. A national insurer subsidises both curative and preventive medical care consumed by risk averse patients. We show that in such an environment, the optimal liability regime is similar to the no-fault systems of Sweden and New Zealand where the doctor faces zero liability. The reason is that...

This paper explores five topics where Georg Simmel’s Philosophy of Money poses challenges for contemporary monetary scholarship. First, any microfoundations for macroeconomics would be erected upon catallactical and not choice-theoretic foundations. Second, money is a tool of thought and not just a veil. Third, Simmel points to a way to make sense of a claim that goes back at least to Richard C...

Aggregation without the Aggravation? Nonparametric Analysis of the Representative Consumer In the tradition of Afriat (1967), Diewert (1973) and Varian (1982), we provide a revealed preference characterisation of the representative consumer. Our results are simple and complement those of Gorman (1953, 1961), Samuelson (1956) and others. They can also be applied to data very readily and without ...

Social network formation models are often compared by their network structures, which satisfy specific equilibrium or welfare properties. Here, we concentrate on welfare criteria and define properties of utility function which are causal for certain network structures. We hope the identification of different properties of utility function will enhance the understanding of the relationship of di...

This paper examines how domestic, foreign, private and public investments affect incomeinequality through financial intermediary dynamics. With the exception of financial allocation efficiency, financial channels of depth and activity are good for the poor as they diminish estimated household income-inequality. Financial size does not have a significant incomeredistributive effect. Financial ef...

We propose a two-stage process called minority voting to allocate public projects in a polity. In the first period, a society decides by a simple majority decision whether to provide the public project. If the proposal in the first period is rejected, the process ends. Otherwise the process continues, but only the members of the minority keep agenda and voting rights for the second stage, in wh...

I study an economy with sellers and buyers with unit supplies and unit demands. Both parties have valuations uniformly distributed on a unit interval. I quantify the inefficiency, compared to the Walrasian market, caused by a market where the agents meet randomly. There are several causes of inefficiency that I deal with separately. First, even if there is perfect information about valuations i...

In this paper, we shed more light on the subjective well-being of workfare participants and compare it to the well-being of unemployed and employed workers. We use data from a selfconducted survey among participants in workfare schemes in Germany. We examine two subdimensions of subjective well-being – life satisfaction and emotional well-being – separately to obtain a more comprehensive view o...

We study the spending profile of workers who experience both a positive transitory income shock (lump-sum severance pay) and negative permanent (layoff). Using de-identified expenditure employment data from Brazil, we show that increase at layoff by 35 percent despite experiencing 14 long-term loss. find high sensitivity to cash-on-hand across consumption categories for several sources variatio...