Contributions in Merlin

Reducing the externalities from energy use is crucial for sustainability. There are basically four ways to reduce externalities from energy use: increasing technical efficiency (“energy input per unit energy service”), increasing economic efficiency (“internalising external costs”), using “clean” energy sources with few externalities, or sufficiency (“identifying ‘optimal’ energy service levels”). A combination of those strategies is most promising for sustainable energy systems. However, the debate on sustainable energy is dominated by efficiency and clean energy strategies, while sufficiency plays a minor role. Efficiency and clean energy face several problems, though. Thus,the current debate should be complemented with a critical discussion of sufficiency. In this paper, I develop a concept of sufficiency, which is adequate for liberal societies. I focus on ethical foundations for sufficiency, as the discussion of such is missing or cursory only in the existing literature. I first show that many examples of sufficiency can be understood as (economic) efficiency, but that the two concepts do not coincide. I then show that sufficiency based on moralization of actions can be understood as implementation of the boundary conditions for social justice that come with notions of liberal societies, in particular the duty not to harm other people. By this, to increase sufficiency becomes a duty beyond individual taste. I further illustrate this in the context of the adverse effects of climate change as externalities from energy use.

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries. Our framework is rich enough to highlight three broad reasons for productivity differences: inappropriate technologies, policy-induced barriers to technology adoption, and within-country misallocations across sectors due to policy distortions. We also discuss the effects of two aspects of globalization, trade in goods and migration, on the wealth of nations through their impact on the direction of technical progress. By doing so, we illustrate some of the equalizing and unequalizing forces of globalization.

Watching television is a widespread activity that takes up a large amount of leisure time in many people’s lives. Television and other mass media play a leading role in transmitting information to voters and in shaping their political attitudes. This contrasts with the paucity of economic research on television consumption. This dissertation presents a comprehensive economic analysis of television consumption and empirically investigates the determinants of TV viewing and its effects on individual well-being and behavior. In Chapter 2, the theoretical foundation is laid out, and television consumption is integrated into a modern economic framework that goes beyond standard rational choice theory. Additionally, the determinants of TV consumption are investigated at individual as well as at institutional levels. Chapters 3 and 4 provide empirical investigations into the consequences of television consumption. The results reveal beneficial as well as unfavorable impacts of TV consumption. Chapter 3 provides evidence that some individuals, due to television’s immediate gratification at low immediate marginal costs, are induced to spend more time consuming TV than they would actually prefer, and their utility is thus reduced. Long hours of TV consumption are associated with lower life satisfaction. The negative effects are especially strong among people with high opportunity costs of time and in countries with a large number of TV channels. Chapter 4 conveys that television consumption also serves an important informational need, especially for people not attracted by more cognitively demanding media, such as newspapers. When local TV is available, people with low and intermediate education consume more news and increase participation in elections in Switzerland. The importance of television is furthermore established by its effects on election campaigns: when local TV is available, political parties react to its presence by putting up more candidates in the highly visible Council of States elections. Chapter 5 presents the conclusions. Zusammenfassung Fernsehkonsum ist eine weit verbreitete Aktivität, die einen Grossteil der Freizeit vieler Leute einnimmt. Fernsehen und andere Massenmedien spielen auch eine wichtige Rolle um Wähler zu informieren und ihre Meinungsbildung zu unterstützen. Dennoch gibt es bisher kaum ökonomische Forschung zu Fernsehkonsum. Diese Dissertation unternimmt eine umfassende ökonomische Analyse von Fernsehkonsum und untersucht empirisch seine Determinanten und seine Auswirkungen auf individuelles Verhalten und Wohlbefinden. Kapitel 2 legt das theoretische Fundament und integriert Fernsehkonsum in ein modernes ökonomisches Framework, das über die Standardtheorie und den Rationalansatz hinausgeht. Des Weiteren werden die Determinanten von Fernsehkonsum auf individueller und institutioneller Ebene untersucht. In Kapitel 3 und 4 werden die Auswirkungen von Fernsehkonsum empirisch analysiert. Die Resultate weisen sowohl nutzbringende als auch nachteilige Folgen nach. Kapitel 3 zeigt auf, dass der unmittelbare Konsumgenuss des Fernsehens bei gleichzeitig geringen marginalen Kosten einige Leute dazu verleitet, mehr Zeit vor dem Fernseher zu verbringen, als sie eigentlich möchten und deshalb ihr Nutzen verringert wird. Viel vor dem Fernseher verbrachte Zeit ist mit geringer Lebenszufriedenheit verbunden. Leute mit hohen Zeitopportunitätskosten und Leute in Ländern mit einer grossen Auswahl an Fernsehsendern sind vermehrt von diesen negativen Effekten betroffen. Kapitel 4 legt dar, dass Fernsehen auch eine wichtige Informationsfunktion wahrnimmt, und dies hauptsächlich für Personen, welche kognitiv anspruchsvollere Medien weniger attraktiv finden. Wenn in der Schweiz Zugang zu lokalen Fernsehsendern besteht, so schauen Leute mit niedrigerer und mittlerer Bildung öfter Nachrichten und nehmen vermehrt an Wahlen teil. Die Wichtigkeit des Fernsehens zeigt sich auch darin, dass die Politiker auf seine Präsenz reagieren und die Parteien mehr Ständeratskandidaten aufstellen wenn es lokale Fernsehsender gibt. Kapitel 5 legt die Schlussfolgerungen dar.

The phenomenon of empathy entails the ability to share the affective experiences of others. In recent years social neuroscience made considerable progress in revealing the mechanisms that enable a person to feel what another is feeling. The present review provides an in-depth and critical discussion of these findings. Consistent evidence shows that sharing the emotions of others is associated with activation in neural structures that are also active during the first-hand experience of that emotion. Part of the neural activation shared between self- and other-related experiences seems to be rather automatically activated. However, recent studies also show that empathy is a highly flexible phenomenon, and that vicarious responses are malleable with respect to a number of factors--such as contextual appraisal, the interpersonal relationship between empathizer and other, or the perspective adopted during observation of the other. Future investigations are needed to provide more detailed insights into these factors and their neural underpinnings. Questions such as whether individual differences in empathy can be explained by stable personality traits, whether we can train ourselves to be more empathic, and how empathy relates to prosocial behavior are of utmost relevance for both science and society.

This article reviews the economic literature on the economic and social costs of terrorism with a special emphasis on the consequences on the tourism industry. Several studies find a negative and economically important effect of terrorism on tourism demand. The studies also highlight dif-ferences in the consequences of different types of terror attacks, causality, the temporal patterns of the impact as well as interdependencies between different countries’ tourism industries and their terrorist campaigns. Further, the paper briefly discusses studies on the consequences on foreign direct investment, consumption, savings and investment, international trade, overall eco-nomic development and on subjective life satisfaction.

This paper argues that life satisfaction data can be used to value natural disasters. We discuss the strengths of this approach, compare it to traditional methods and apply it to estimate and monetize utility losses caused by floods in 16 European countries between 1973 and 1998. Using combined cross-section and time-series data, we find a negative impact of floods on life satisfaction that is sizeable, robust and significant. The estimates are comparable to price discounts found in housing markets. In an exploratory analysis, we find that risk transfer mechanisms such as mandatory insurance have large mitigating effects.

This classroom experiment introduces students to the concept of double marginalization, i.e., the exercise of market power at successive vertical layers in a supply chain. By taking on roles of firms, students determine how the mark-ups are set at each successive production stage. They learn that final retail prices tend to be higher than if the firms were vertically integrated. Students compare the welfare implications of two potential solutions to the double marginalization problem: acquisition and franchise fees. The experiment also can stimulate a discussion of two-part tariffs, transfer pricing, contracting, and the Coase theorem.