Massimo Filippini, Economies Of Scale In The Swiss Nursing Home Industry, In: Working paper series / Socioeconomic Institute, No. No. 9901, 1999. (Working Paper)
This paper examines costs in the Swiss nursing home industry, an issue of concern to Swiss policy makers because of the explosion of elderly care costs and the aging of the population. The paper considers estimation of a translog cost function employing panel data for a sample of 36 nonprofit nursing homes operating in Ticino, a canton of Switzerland, over the period 19931995. Using a set of dummy variables quality differences are considered. The results of this analysis indicate the existence of economies of scale for most output levels. 

Hans Gersbach, Armin Schmutzler, Endogenous Spillovers and Incentives to Innovate, In: Working paper series / Socioeconomic Institute, No. No. 9902, 1999. (Working Paper)


Michael Breuer, ParetoVerbesserungen in der Sozialversicherung durch Selbstselektion ihrer Mitglieder, In: Working paper series / Socioeconomic Institute, No. No. 9804, 1998. (Working Paper)
In der Sozialversicherung gelten Risikoselektionen als unerwuenscht, weil sie die Gefahr mit sich bringen, dass der einheitliche Risikopool in der Sozialversicherung aufgespalten und die sozialpolitisch gewuenschten Umverteilungsstroeme zwischen den Versicherten reduziert werden. Der Beitrag zeigt am Beispiel der sozialen Krankenversicherung in der Schweiz und der Bundesrepublik Deutschland auf, dass die Selbstselektion von Versicherten in der Sozialversicherung produktiv, das heisst wohlfahrtssteigernd eingesetzt werden kann, ohne den ‚solidarischen‘ Charakter der Sozialversicherung in Frage zu stellen. Konkret wird vorgeschlagen, den Versicherten innerhalb eines durch einen Risikoausgleich gestuetzten Wettbewerbs zwischen den Krankenkassen eine groessere Wahlfreiheit ueber die Hoehe des Versicherungsschutzes einzuraeumen. Fuer Versicherte mit niedrigem Risiko oder hohem Einkommen kann es sinnvoll sein, ihren Versicherungsschutz innerhalb der Sozialversicherung zu reduzieren, obwohl sie dann aufgrund des konstanten Transfers an andere Versicherte der sozialen Krankenversicherung einen hoeheren Preis pro Einheit Sozialversicherungsschutz zu zahlen haben. 

Armin Schmutzler, Environmental Regulations and Managerial Myopia, In: Working paper series / Socioeconomic Institute, No. No. 9903, 1998. (Working Paper)


Massimo Filippini, Jörg Wild, The Estimation of an Average Cost Frontier to Calculate Benchmark Tariffs for Electricity Distribution, In: Working paper series / Socioeconomic Institute, No. No. 9803, 1998. (Working Paper)
In this paper we have examined the scale and cost inefficiency of a sample of Swiss electricity distribution utilities. To do so, we have considered estimation of a stochastic frontier average cost model using the approach suggested by Schmidt and Sickles (1984) for panel data. A translog cost function was estimated using panel data for a sample of 30 municipal utilities over the period 19921996. The results indicate the existence of economies of output and customer density and economies of scale. Moreover, the findings on cost inefficiency show that a majority of the distribution utilities is not producing at the minimum level of the cost and that a possible application of the frontier methodology employed in this paper relates to the regulation and benchmarking of the delivery rates. 

Christoph Zaborowski, Peter Zweifel, Getting Out of Debt: Attachment of wage in whose interest?, In: Working paper series / Socioeconomic Institute, No. No. 9802, 1998. (Working Paper)
Attachment of wage as a way for creditors to enforce payment by unwilling or insolvent debtors is not very successful in several countries. Based on a dynamic model of debtor behaviour, this paper explores two alternatives of reform. One is to reduce the rate of attachment, which at present amounts to 100 percent of the wage income exceeding the subsistence level, thus probably destroying incentives to work. According to model simulations, reducing the attachment rate is likely to result in an increase of labour supply but a decrease of attachment revenue per period. Second, the introduction of a debt release would have an ambiguous effect on labour supply. While resulting in a partial loss for creditors, it would permit debtors to get out of debt. A Pareto improvement thus does not seem to be possible. When taking the taxpayers as an involved third party into account, however, a potential Pareto improvement appears attainable. 

Susanne Bonomo, Massimo Filippini, Peter Zweifel, Neue Aufschlüsse über die Elektrizitätsnachfrage der schweizerischen Haushalte, In: Working paper series / Socioeconomic Institute, No. No. 9801, 1998. (Working Paper)
Die vorliegende Untersuchung wurde ermöglicht durch das vom Bundesamt für Energiewirtschaft finanzierte Projekt „Auswirkungen einer grenzkostenorientierten Tarifrevision auf die Elektrizitätsnachfrage“. Wir danken dem Bundesamt für Energiewirtschaft, dem Bundesamt für Statistik sowie den Elektrizitätswerken der Städte Zürich, Bern und Basel für die tatkräftige Unterstützung des Projekts. 

Massimo Filippini, Jörg Wild, Ein PoolModell für die schweizerische Elektrizitätswirtschaft, In: Working paper series / Socioeconomic Institute, No. No. 9701, 1997. (Working Paper)


Steve Cicala, David Hémous, Morten G Olsen, Adverse selection as a policy instrument: unraveling climate change, In: NBER Working Paper Series, No. 30283, 2023. (Working Paper)
This paper applies principles of adverse selection to overcome obstacles that prevent the implementation of Pigouvian policies to internalize externalities. Focusing on negative externalities from production (such as pollution), we consider settings in which aggregate emissions are known, but individual contributions are unobserved by the government. We evaluate a policy that gives firms the option to pay a tax on their voluntarily and verifiably disclosed emissions, or pay an output tax based on the average rate of emissions among the undisclosed firms. The certification of relatively clean firms raises the outputbased tax, setting off a process of unraveling in favor of disclosure. We derive sufficient statistics formulas to calculate the welfare of such a program relative to mandatory output or emissions taxes. We find that the voluntary certification mechanism would deliver significant gains over outputbased taxation in two empirical applications: methane emissions from oil and gas fields, and carbon emissions from imported steel. 

Jacob Goeree, Alexey Kushnir, A geometric approach to mechanism design, In: Working paper series / Department of Economics, No. 56, 2013. (Working Paper)
We develop a novel geometric approach to mechanism design using an important result in convex analysis: the duality between a closed convex set and its support function. By deriving the support function for the set of feasible interim values we extend the wellknown MaskinRileyMatthewsBorder conditions for reducedform auctions to social choice environments. We next refine the support function to include incentive constraints using a geometric characterization of incentive compatibility. Borrowing results from majorization theory that date back to the work of Hardy, Littlewood, and Pólya (1929) we elucidate the "ironing" procedure introduced by Myerson (1981) and Mussa and Rosen (1978). The inclusion of Bayesian and dominant strategy incentive constraints result in the same support function, which establishes equivalence between these implementation concepts. Using Hotelling's lemma we next derive the optimal mechanism for any social choice problem and any linear objective, including revenue and surplus maximization. We extend the approach to include general concave objectives by providing a fixedpoint condition characterizing the optimal mechanism. We generalize reducedform implementation to environments with multidimensional, correlated types, nonlinear utilities, and interdependent values. When value interdependencies are linear we are able to include incentive constraints into the support function and provide a condition when the secondbest allocation is ex post incentive compatible. 

Philippe K Widmer, Peter Zweifel, Mehdi Farsi, Accounting for heterogeneity in the measurement of hospital performance, In: Working paper series / Department of Economics, No. No. 52, 2011. (Working Paper)
With prospective payment of hospitals becoming more common, measuring their performance is gaining in importance. However, the standard cost frontier model yields biased efficiency scores because it ignores technological heterogeneity between hospitals. In this paper, efficiency scores are derived from a random intercept and an extended random parameter frontier model, designed to overcome
the problem of unobserved heterogeneity in stochastic frontier analysis. Using a sample of 100 Swiss hospitals covering the years 2004 to 2007 and applying Bayesian inference, significant heterogeneity is found, suggesting rejection of the standard cost frontier model. Estimated inefficiency decreases even below the 14 percent reported by Hollingsworth (2008) for European countries. Accounting for unobserved heterogeneity would make hospitals rated below 85 percent efficiency according to the standard model gain up to 12 percentage points, serving to highlight the importance of heterogeneity correction in the estimation of hospital performance. 

Christoph Winter, Accounting for the Changing Role of Family Income in Determining College Entry, In: Working paper series / Institute for Empirical Research in Economics, No. No. 402, 2011. (Working Paper)
In recent decades, the US has experienced a widening of the college enrolment gap between rich and poor families. This is commonly interpreted as evidence for a tightening of borrowing constraints. This paper asks whether this is indeed the case. I present an incompletemarkets overlappinggenerations model with college enrolment, in which altruistic parents provide transfers to their children. In the model the rise in earnings inequality observed between 1980 and 2000 acts as the driving force for generating the trends in the data. With the help of counterfactual experiments, I find that fraction of constrained households is much higher (24 instead of 8 percent) than indicated by the narrow enrolment gap in 1980. Contrary to what the development of the enrolment gap in the data suggests, the share of constrained households actually fell (to 18 percent) between 1980 and 2000. I show that altruism is important for explaining these findings. 

Philippe K Widmer, Does prospective payment increase hospital (in)efficiency? Evidence from the Swiss hospital sector, In: Working paper series / Department of Economics, No. No. 53, 2011. (Working Paper)
Several European countries have followed the United States in introducing prospective payment for hospitals with the expectation of achieving cost efficiency gains. This article examines whether theoretical expectations of cost efficiency gains can be empirically confirmed. In contrast to previous studies, the analysis of Switzerland provides a comparison of a retrospective per diem payment system with a prospective global budget and a payment per patient case system. Using a sample of approximately 90 public financed Swiss hospitals during the years 2004 to 2009 and Bayesian inference of a standard and a random parameter frontier model, cost efficiency gains are found, particularly with a payment per patient case system. Payment systems designed to put hospitals at operating risk are more effective than retrospective payment systems. However, hospitals are heterogeneous with respect to their production technologies, making a random parameter frontier model the superior specification for Switzerland. 

Boris Krey, Philippe K Widmer, Peter Zweifel, Efficient Provision of Electricity for the United States and Switzerland, In: Working paper series / Socioeconomic Institute, No. No. 0812, 2011. (Working Paper)
This study applies financial portfolio theory to determine efficient frontiers in the provision of electricity for the United States and Switzerland. Expected returns are defined by the rate of productivity increase of power generation (adjusted for external costs), volatility, by its standard deviation. Since unobserved productivity shocks are found to be correlated, Seemingly Unrelated Regression Estimation (SURE) is used to filter out the systematic component of the covariance matrix of the productivity changes. Results suggest that as of 2003, the feasible maximum expected return (MER) electricity portfolio for the United States contains more Coal, Nuclear, and Wind than actual but markedly less Gas and Oil. The minimum variance (MV) portfolio contains markedly more Oil, again more Coal, Nuclear, and Wind but almost no Gas. Regardless of the choice between MER and MV, U.S. utilities are found to lie substantially inside the efficient frontier. This is even more true of their Swiss counterparts, likely due to continuing regulation of electricity markets. 

Mathias Hoffmann, Ulrich Woitek, Emerging from the war: gold standard mentality, current accounts and the international business cycle 18851939, In: Working paper series / Department of Economics, No. No. 57, 2011. (Working Paper)
We study international business cycles and capital flows in the UK, the United States and the Emerging Periphery in the period 18851939. Based on the same set of parameters, our model explains current account dynamics under both the Classical Gold Standard and during the Interwar period. We interpret this as evidence for Gold Standard mentality: the expectation formation mechanism with respect to major macroeconomic variables driving the current account – output, exchange rates and interest rates – has remained fundamentally stable between the two periods. Nonetheless, the macroeconomic environment changed: Volatility increased generally, but less so for international capital flows than for GDP. This pattern is consistent with shocks in the Interwar period becoming more persistent and more global. 

Olivier Ledoit, Michael Wolf, Nonlinear Shrinkage Estimation of LargeDimensional Covariance Matrices, In: Working paper series / Institute for Empirical Research in Economics, No. No. 515, 2011. (Working Paper)
Many statistical applications require an estimate of a covariance matrix and/or its inverse. When the matrix dimension is large compared to the sample size, which happens frequently, the sample covariance matrix is known to perform poorly and may suffer from illconditioning. There already exists an extensive literature concerning improved estimators in such situations. In the absence of further knowledge about the structure of the true covariance matrix, the most successful approach so far, arguably, has been shrinkage estimation. Shrinking the sample covariance matrix to a multiple of the identity, by taking a weighted average of the two, turns out to be equivalent to linearly shrinking the sample eigenvalues to their grand mean, while retaining the sample eigenvectors. Our paper extends this approach by considering nonlinear transformations of the sample eigenvalues. We show how to construct an estimator that is asymptotically equivalent to an oracle estimator suggested in previous work. As demonstrated in extensive Monte Carlo simulations, the resulting bona fide estimator can result in sizeable improvements over the sample covariance matrix and also over linear shrinkage. 

Alexander Rathke, Tobias Straumann, Ulrich Woitek, Overvalued: Swedish monetary policy in the 1930s, In: Working paper series / Department of Economics, No. No. 58, 2011. (Working Paper)
This paper reconsiders the role of monetary policy in Sweden’s strong recovery from the Great Depression. The Riksbank in the 1930s is sometimes seen as an example of a central bank that was relatively innovative in terms of the conduct of monetary policy. To consider this analytically, we estimate a smallscale, structural general equilibrium model of a small open economy using Bayesian methods. We find that the model captures the key dynamics of the period surprisingly well. Importantly, our findings suggest that Sweden avoided the worst excesses of the depression by conducting conservative rather than innovative monetary policy. We find that, by keeping the Swedish krona undervalued to replenish foreign reserves, Sweden’s exchange rate policy unintentionally contributed to the Swedish growth miracle of the 1930s, avoiding a major slump in 1932 and enabling the country to benefit quickly from the eventual recovery of world demand. 

Dominic Rohner, Mathias Thoenig, Fabrizio Zilibotti, Seeds of distrust: conflict in Uganda, In: Working paper series / Department of Economics, No. No. 54, 2011. (Working Paper)
We study the effect of civil conflict on social capital, focusing on the experience of Uganda during the last decade. Using individual and countylevel data, we document causal effects on trust and ethnic identity of an exogenous outburst of ethnic conflicts in 200204. We exploit two waves of survey data from Afrobarometer 2000 and 2008, including information on socioeconomic characteristics at the individual level, and georeferenced measures of fighting events from ACLED. Our identification strategy exploits variations in the intensity of fighting both in the spatial and crossethnic dimensions. We find that more intense fighting decreases generalized trust and increases ethnic identity. The effects are quantitatively large and robust to a number of control variables, alternative measures of violence, and different statistical techniques involving ethnic and county fixed effects and instrumental variables. We also document that the postwar effects of ethnic violence depend on the ethnic fractionalization. Fighting has a negative effect on the economic situation in highly fractionalized counties, but has no effect in less fractionalized counties. Our findings are consistent with the existence of a selfreinforcing process between conflicts and ethnic cleavages. 

Maria Saez Marti, Siesta: a theory of freelancing, In: Working paper series / Department of Economics, No. No. 55, 2011. (Working Paper)
I study the effect of fatigue and innate ability on performance in a model with incomplete contracts, lumpy tasks requiring multiple periods of work and stochastic productivity shocks. I find that increasing ability or reducing fatigue does not lead necessarily to more productive efficiency, since it may exacerbate the incentive for agents take "too much" onthejob leisure. In a world with heterogenous agents, the problem may be ameliorated by the introduction of a dual labour market with freelancers (who can take breaks at their discretion) and regular workers (who work on a fixed schedule). 

Sigrid Röhrs, Christoph Winter, Wealth inequality and the optimal level of government debt, In: Working paper series / Department of Economics, No. No. 51, 2011. (Working Paper)
In this paper, we quantitatively analyze to what extent a benevolent government should issue debt in a model where households are subject to idiosyncratic productivity shocks, insurance markets are missing and borrowing is restricted. In this environment, issuing government bonds facilitates saving for selfinsurance. Despite this, we find that in a calibrated version of the model that is consistent with the skewed wealth and earnings distribution observable in the U.S., the government should buy private bonds, and not issue public debt in the long run. The reason is that in the U.S., a large fraction of the population has almost no wealth or is even in debt. The wealthpoor, however, do not profit from an increase in the interest rate following an increase in public debt. Instead, they gain from higher wages that result from a reduction in debt. We show that even when the short run costs of higher capital taxation are taken into account, it still pays off to reduce government debt on overall. Moreover, we find that endogenizing household’s borrowing constraints by assuming limited commitment leads to even higher asset levels being optimal in the long run. 
