Published since November 1, 2001

The B.E. Journal of Economic Analysis & Policy

ISSN: 1935-1682

Editors-in-chief: Sandra Ludwig, Hendrik Schmitz

Edited by: Francesca Barigozzi, Ainoa Aparicio Fenoll, Robert Fleck, Matthew McGinty, Mariapia Mendola, Till Requate, Frans de Vries, Tobias Wenzel

Impact Factor: 0.905

About this journal

Objective
The B.E. Journal of Economic Analysis & Policy (BEJEAP) welcomes submissions that employ microeconomics to analyze issues in organizational economics, consumer behavior, and public policy. Articles submitted to BEJEAP can come in two formats: research papers and letters. Authors should bring to their analysis whatever microeconomic theoretical, experimental or econometric tools are helpful. We publish both empirical work and applied theory (though not more abstract forms of applied theory), and our aim is to disseminate papers that have practical implications for public policy, organizational or individual decision making.

Topics

Design of organizations and institutions
Industrial organization
Health economics
Public finance
Labour Economics
Economics of education, family, development, law, or the environment
Effects of domestic and international policy

Article formats
Research Papers, Letters

> Information on submission process

Your Benefits

Your benefits:

Quick publication of cutting-edge research
Practical implications for public policies
Empirical work and applied theory
High quality peer-review

History

Content available since 2001 (Volume 1, Issue 1)

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Supplementary Materials

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Volume 23 Issue 1

January 2023

Publicly Available January 23, 2023

Frontmatter

Page range: i-ii

Download PDF

Research Articles

October 17, 2022

Political Commitment, Policy Consequences, and Moral Beliefs: Survey Evidence on the Minimum Wage

Neha Agarwal, David Fairris

Page range: 1-54

Abstract

Does information regarding the economic consequences of a minimum wage affect the level of support for or opposition to minimum wage policy? We conduct an online survey of 2242 US respondents to study this question. We randomly assign differing, empirically plausible estimates of minimum wage impacts on three outcomes—employment, the distribution of minimum wage gains to households, and comparative impacts of a government transfer program versus a minimum wage— in order to explore the relationship between minimum wage consequences and political commitment. Our results show that while political commitment is indeed influenced by information on the policy’s consequences, such information rarely leads to fundamental changes in political commitment. This is consistent with findings in the larger literature on the effects of information provision on political commitment. We offer a novel explanation for such findings by surveying respondents on their moral beliefs regarding the minimum wage, focusing on the extent to which these beliefs are consequentialist or non-consequentialist in nature. We find that non-consequentialist moral beliefs are prevalent among survey respondents and that the more intense are these beliefs, the less likely people are to be swayed by the policy’s consequences.

November 17, 2022

Managerial Delegation, Product R&D and Subsidies on R&D Investment Costs

Chung-Hui Chou

Page range: 55-78

Abstract

This paper studies owners’ optimal designs of incentive schemes in a market with managerial firms competing in prices as well as in product research and development (R&D) investment in which owners use a linear combination of gross profits which are defined to be sales revenue minus production costs, sales revenue and R&D costs to evaluate managers’ performances. The main contribution of our research is showing that owners not only deflate R&D costs to induce managers to invest more in product R&D but also place different weights on production costs and R&D costs optimally. If product R&D is highly efficient, managerial delegation improves consumers’ surplus at cost of firms’ profits which is sharply contrasting to the standard conclusion of sales delegation under price competition. Moreover, managerial delegation may achieve Pareto efficiency if product R&D is mildly inefficient. Finally, we find that copyright protection benefits consumers’ surplus but could reduce social welfare.

January 3, 2023

Counterfactual Decomposition of Health Care Expenditures: From Cost-Based Payment to a Global Budget System

Ya-Ming Liu

Page range: 79-111

Abstract

This study divides health care expenditures into observable effects and structural shifts to explore the impacts of population ageing and high technology on the growth in outpatient service, inpatient service, and prescription drug expenditures in a health care system that has experienced a shift in payment schemes from a cost-based to a global budget system. By using the quantile decomposition method to examine data from Taiwan, the study shows that, in the short run, all expenditures exhibit an increasing trend in the higher percentiles. In the long run, an observable effect dominates the growth of health care expenditures. Specifically, population ageing leads to the growth of prescription drug expenditures in the higher percentiles. The adoption of high technology drives the growth of the top outpatient and inpatient service expenditures. These results suggest that while the government health care agency aims to control health care expenditures, improving the management of high-cost patients is likely to be one important avenue to improving the effectiveness of the cost control policy.

Publicly Available November 14, 2022

Legalizing Harmful Drugs: Government Participation and Optimal policies

Luis Rodrigo Arnabal Rocca

Page range: 113-164

More Download PDF

Abstract

We are currently witnessing a shift in the approach to combat traffic and consumption of illegal harmful drugs, being cannabis legalization a prominent example. In this paper, we study how to optimally regulate the market for cannabis, in a setting where consumers differ in their utility from consumption of the psychoactive component of cannabis, THC, and suffer from misperception of the health damage it causes. We analyze this problem through a vertical differentiation model, where a black market firm and a public firm compete in prices and qualities (THC content). A paternalistic government would like to correct for the misperceived health damage caused by cannabis consumption, as well as to reduce the size of the black market. It is the undesirability of black market profits what explains that the first-best allocation cannot be decentralized. We find two possible equilibria, depending on whether the public firm serves those consumers with the highest or lowest willingness to pay for quality. Paradoxically, when the public firm serves those consumers with higher taste for THC, a lower average health damage is achieved together with a better economic result for the public firm.

November 29, 2022

Subsidized Crop Insurance under Limited Access to Incomplete Financial Markets

Daniel C. Voica

Page range: 165-189

Abstract

Almost universally, crop insurance uptake has been very low in the absence of significant governmental subsidies. We proposed an explanation for the low uptake by analyzing farmers’ optimal behavior in the presence of subsidized crop insurance and incomplete financial markets. Under specific replication conditions, farmers’ valuation of crop insurance is lower than insurers’ valuation if farmers have access to fewer financial assets than insurers. A potential rationalization is that farmers and insurers have dissimilar price formation processes. Our model implies that subsidized crop insurance changes farmers’ production choices by altering both the relative returns across states of Nature and their risk choices. However, because of the separation between consumption and production decisions, farmers will use crop insurance in a manner consistent with profit maximization, independent of risk preferences.

December 19, 2022

Network Effect, Business Dynamism and Wage Inequality in a Sharing Economy

Hamid Beladi, Chi-Chur Chao, Pamela Smith

Page range: 191-212

Abstract

This paper examines the network effect on income distribution and social welfare in a sharing economy with rural-urban migration. A rise in the urban network effect via an increase of the number of users attracts capital to the urban sector. Urban skilled wage rises but rural unskilled wage falls. Due to rising costs from capital rental and skilled wage, urban firms exit if the demand elasticity of urban goods is large. This business-dynamism effect via firm exit mitigates the skilled-unskilled wage gap in the long run. Furthermore, rural-urban migration is mitigated from business dynamism by relocating capital to the rural sector. Network effects thus serves as a mitigator to cope with urban unemployment. In addition, the role of network effects on the effects of changes in the endowments are examined in the sharing economy.

Letters

October 24, 2022

Global Politico-Economic Dynamics during a Local Conflict: Reciprocal Patterns of Cooperation and Sanctions

Reinhard A. Weisser

Page range: 213-242

Abstract

Employing global daily news coverage on interactions between stakeholders in G20 countries, this research offers a near-real-time analysis of changing interaction patterns between Russia and other G20 economies after the onset of open military conflict. Building on an event study over eight months, further analyses of reciprocal response dynamics point to potentially costly short-term consequences of sanctions, such as the breakdown and diversion of international cooperation amongst major economies in a broader sense. Once such a reciprocal cooperation decay has set in, re-establishing international cooperation between major societal actors may take considerable time.

November 14, 2022

Welfare Effects of Socially Conscious Platforms in Two-Sided Markets

Hayama Abe, Yusuke Zennyo

Page range: 243-251

Abstract

This note presents a model of platform competition in a two-sided market, with one competing platform pursuing not only its own profit but also consumer surplus. We investigate how the presence of such a socially conscious platform affects market competition. Results indicate that greater emphasis as an objective put on consumer surplus by the socially conscious platform leads to higher market share. Creation of a larger network enhances the total benefits associated with indirect network externalities in the two-sided market. When the extent of indirect network externalities is sufficiently strong, increased network benefits can improve social welfare. By contrast, if indirect network externalities are weak, then the socially conscious platform might be detrimental to society.

November 21, 2022

Private Benefits of Control and the Core

Kyounghun Lee, Frederick Dongchuhl Oh

Page range: 253-260

Abstract

This study aims to analyze the core in production economies with private benefits of control. We consider two types of shareholders in a firm: small shareholders and the controlling shareholder. Unlike small shareholders, the controlling shareholder’s utility increases not only with the consumption of goods but also with private benefits related to the production level of the firm and his controlling power. We observe that the private benefits of control are allowed in the core only when the transferred utility from the controlling shareholder to small shareholders is higher than the small shareholders’ utility loss from private benefits.

November 21, 2022

What is the Short-Term Impact of Decreasing the Speed Limit for Motor Vehicles on Bicycle Commuting? Evidence from French Cities during Covid-19 Pandemic

Léonard Moulin

Page range: 261-269

Abstract

This article investigates the effect of a decrease in the speed limit for motor vehicles on bicycle commuting in French cities. I use a difference-in-differences event study design to measure a possible causal effect of motor vehicle speed limits on changes in bicycle traffic. I do not find any effect of the reduction of the speed limit from 50 km/h to 30 km/h on bicycle commuting. This result is important for public policy design, since increasing the number of bicycles is one of the benefits that politicians expect from decreasing the speed limit for motor vehicles.

December 14, 2022

Gone with the Flood: Natural Disasters and Children’s Schooling in Pakistan

Qaisar Khan, Karrar Hussain

Page range: 271-283

Abstract

This study investigates the impact of mass floods on children’s schooling in Pakistan. More precisely, it explores the effect of the 2010 floods that destroyed nearly 11,000 schools and left approximately half a million children out of school. Analyzing household data, we show that the flood resulted in children dropping out of school and plummeting education levels and literacy and school completion rates. Furthermore, the mechanisms behind these poor schooling outcomes are that employment and income levels fall drastically, and households adopt a self-insuring strategy—withdraw children from school and put them into child labor.

December 19, 2022

Major-Occupation Match Quality: An Empirical Measure Based on Relative Productivity

Margaret Leighton, Jamin D. Speer

Page range: 285-292

Abstract

The match quality between a worker’s field of study in college and her occupation is an important labor market outcome. Yet this match quality is difficult to define and measure. We propose a new measure of major-occupation match quality based on relative productivity. A worker is well-matched if graduates from her major, working in her occupation, have high earnings relative to other major-occupation pairs. We show that some majors can be very well-matched or very badly matched (e.g. nursing), while others are never very well- or badly matched (e.g. humanities). Our measure has two desirable features: it is continuous, and it can be estimated in any data set including field of study, wage, and occupation.

Ahead of Print / Just Accepted

Ahead of Print / Just Accepted

Volume 23 (2023)

Issue 1

Volume 22 (2022)

Volume 21 (2021)

Volume 20 (2020)

Volume 19 (2019)

Volume 18 (2018)

Volume 17 (2017)

Volume 16 (2016)

Volume 15 (2015)

Volume 14 (2014)

Volume 13 (2013)

Volume 12 (2012)

Volume 11 (2011)

Volume 10 (2010)

Volume 9 (2009)

Volume 8 (2008)

Volume 7 (2007)

Volume 6 (2006)

Volume 5 (2006)

Volume 4 (2005)

Volume 3 (2004)

Volume 2 (2003)

Issue 1

Volume 1 (2001)

Issue 1

5-year Impact Factor	0.743
Cite Score	1.0
European Reference Index for the Humanities
Impact Factor	0.905
Journal Citation Indicator	0.24
SCImago Journal Rank	0.343
Source Normalized Impact per Paper	0.525

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You can easily submit your manuscript online. Simply go to http://mc.manuscriptcentral.com/dgbejeap and you will be guided through the whole peer-reviewing and publishing process.

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Peer review process (you will be guided through every step)
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If accepted: you have the option to publish it open access

In the interest of a fast track from submission to publication, there will be no major revision rounds for letters. BEJEAP will either accept manuscripts (subject to editorial revisions), invite minor revisions, or reject manuscripts without a detailed referee report. Submitted letters should hence be ready for publication if accepted for publication by the editors.

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Manuscripts must be written in clear and concise English
Before submitting your article please have a look at our Information for Authors and Copyright Transfer Agreement
Once your article is accepted you have the option to publish it open access
Our Repository Policy allows you to distribute 30 PDF copies of your published article to colleagues (the PDF has to include the information that it is an author's copy). Please also feel free to distribute the link to the online abstract
If you have any general questions please visit our FAQ page for authors

We look forward to receiving your manuscript!

Editorial

Editors-in-Chief
Sandra Ludwig, Ulm University, Germany
Hendrik Schmitz, Paderborn University, Germany

Editors
Francesca Barigozzi, University of Bologna, Italy
Robert Fleck, Clemson University, USA
Ainoa Aparicio Fenoll, University of Turin, Italy
Matthew McGinty, University of Wisconsin-Milwaukee, USA
Mariapia Mendola, University of Milano-Bicocca, Italy
Till Requate, Kiel University, Germany
Frans de Vries, University of Aberdeen Business School, UK
Tobias Wenzel, University of Sheffield, UK

(Deutsch)

Online ISSN: 1935-1682
Type: Journal
Language: English
Publisher: De Gruyter
First published: November 1, 2001
Publication Frequency: 4 Issues per Year
Audience: researchers in the field of economic analysis and policy