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511. Mega-Sporting Events as Experience Goods

Author:
Malte Heyne, Wolfgang Maennig, and Bernd Suessmuth
Publication Date:
01-2007
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
This paper tests the hypothesis that a nation’s hosting of a mega-sporting event is an experience good for its residents. Applying data from an ex-ante and ex-post query based on contingent valuation methods, we use the Soccer World Cup 2006 as a natural experiment. The significant ex-post increase in valuation is shown to be due to adventitious citizens requiring an involving experience, rather than to an updating of a-prior assessment.
Topic:
Economics, Sports, World Cup, Cotingent Valuation Method, and Experience Goods
Political Geography:
Global Focus

512. Arenas vs. Multifunctional Stadia – Which Do Spectators Prefer?

Author:
Arne Feddersen and Wolfgang Maennig
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
Large sports stadia construction follows two different general concepts: (1) Mono-functional arenas which are specially suited for one sport exclusively and which are characterised by the absence of an athletic track. (2) Multifunctional sports stadia which can be used for different sporting or cultural events. Officials of clubs often argue that the atmosphere in an arena is significantly better than that of a multipurpose facility and that spectators prefer such an atmosphere. Estimated panel regressions with fixed effects show a significant positive effect of a mono-functional soccer stadium on spectator demand. Controlling for other demand determinants in the German professional soccer league, Bundesliga, an isolated effect of around 4,800 additional spectators a game can be found. This translates into a substantial increase of about 18.7% against the mean value of 25,602 spectators per Bundesliga game.
Topic:
Economics, Sports, Soccer, and Stadiums
Political Geography:
Global Focus

513. Reconstruction and Reconciliation: What’s Economics Got to Do With It?

Author:
Christopher J. Coyne
Publication Date:
01-2007
Content Type:
Journal Article
Journal:
The Journal of Diplomacy and International Relations
Institution:
School of Diplomacy and International Relations, Seton Hall University
Abstract:
Reconstruction and reconciliation are perhaps the most pressing issues of our time. The ongoing conflicts in the Middle East, as well as the many problems generated by weak, failed, and conflict-torn states in other parts of the world, are examples of situations where these topics are relevant. Reconstruction entails rebuilding, and in some cases constructing, both formal and informal institutions in weak, failed, and postwar countries. More specifically, the reconstruction process involves the restoration of physical infrastructure and facilities, minimal social services, and structural reform in the political, economic, social, and security sectors. The end goal is the establishment of liberal democratic institutions, or at least the foundations of such institutions. A liberal democracy refers to political institutions which recognizes, respects, and enforces individual and civil rights, the rule of law, and private property.1 Typically the reconstruction process involves some array of indigenous citizens and elites as well as exogenous actors, whether they are military occupiers or international policymakers. Reconciliation can be seen as a key aspect of the broader reconstruction process and involves individuals coming to terms with past human and civil rights abuses, oppression, and violations of the rule of law and private property. Any shift from an illiberal to a liberal regime requires some form of reconciliation between enemies. The past violations of human, civil, and property rights by certain individuals must be addressed, but when doing so, a balance of retribution and reconciliation should be established. In the absence of such an ethic of forgiveness and reconciliation, the transition toward a liberal order will be incomplete.
Topic:
Economics, Reconstruction, Reconciliation, and Post-Conflict
Political Geography:
Middle East and Global Focus

514. Welfare Gains from Optimal Policies in a Partially Dollarized Economy

Author:
Carlos Gustavo Machicado
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This paper evaluates welfare under optimal monetary and fiscal policy in a dynamic stochastic model of currency substitution and capital. It shows that in a partially dollarized economy, the main optimal policy results, i.e. the Friedman Rule and the zero capital tax, hold. Welfare implications of these optimal policies are computed for the Bolivian economy using a second-order approximation technique. The primary conclusions are that the welfare gains under optimal monetary policy are negligible. The welfare gains when optimal fiscal policy is considered alone or in conjunction with optimal monetary policy are sizable and come from the increase in real variables and also by the increase in real balances in local currency. Thus, welfare gains are negatively related to dollarization.
Topic:
Economics, Monetary Policy, Fiscal Policy, Welfare, and Dollarization
Political Geography:
Global Focus

515. Inequality and Suicide Rates: A Cross-Country Study

Author:
Antonio Rodríguez Andrés
Publication Date:
10-2006
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This paper tests whether economic inequality is related to suicide mortality. Using an unbalanced panel of 40 countries for the period 1947-2001 allows us to control for the effect of unobserved factors that may have an impact on suicide rates. Our results indicate that there is a statistically insignificant positive effect of inequality on the incidence of suicide. The latter result seems to be robust to a number of specification issues explored in a sensitivity analysis. Our results also suggest that female labour participation has a significant positive effect on the total (males and female) suicide rates, supporting the sociological argument that the role conflict dominates more than the role expansion. Contrary to the total and male suicide rates findings, the fertility rate matters in explaining female suicide rates. Finally, in contrast to previous studies, suicide rates were not sensitive to income levels, divorce rates and alcohol consumption.
Topic:
Economics, Inequality, Public Health, Data, and Suicide
Political Geography:
Global Focus

516. Stadium Architecture and regional economic development: International experience and the plans of Durban

Author:
Wolfgang Maennig
Publication Date:
01-2006
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
For the FIFA World Cup 2010, South Africa plans to invest heavily. The positive economic effects that the country is hoping for stand in contrast to almost all statistical ex-post studies. This contribution emphasises that these results, usually from research under-taken in the USA, can only be generalised to a limited degree. The density of sports venues in developed countries is so high, that the marginal effects of new stadia are necessarily limited. We also emphasise that stadium design around the world was not hitherto adequately targeted towards positive economic effects. The example of Durban and its plans for a new “iconic” stadium is used to illustrate fundamental principles of stadium design and their embedding in a re-urbanisation process that have to be undertaken in order to consciously achieve positive regional economic effects.
Topic:
Development, Economics, Sports, Architecture, World Cup, Regional Economy, and Soccer
Political Geography:
Africa, South Africa, and Global Focus

517. The Case Against a Dollar Policy

Author:
Samuel Brittan
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Milton Friedman’s classic “The Case for Flexible Exchange Rates” was published in 1953, but its inception dates back to 1950 when the author was a consultant to the U.S. Economic Cooperation Administration that was responsible for implementing the Marshall Plan. At that time, it was taken for granted that the Western nations were committed to a system of fixed exchange rates, except for periodic adjustments to new parities. Little did he know that in 1952 the British Treasury had proposed—in a very pessimistic vein and as a result of gloomy and wrongheaded forebodings—that sterling should move to a floating rate. The plan, known as “Robot,” was defeated in the British Cabinet. The country had to wait until 1972 to move to floating and another 20 years—after it was forced out of the European Exchange Rate Mechanism—to learn how to operate economic policy under such a system. Internationally the big shift to floating dates to the early 1970s, between President Nixon’s suspension of gold convertibility in 1971 and the collapse of the Smithsonian attempt to rebuild a fixed exchange rate system in 1973. The fixed rate system broke down because of the inherent tensions between the goals of free multilateral trade, national freedom to determine monetary policy, and fixed exchange rates. It is fortunate that a fixed exchange rate regime was the element that gave way in the end. The main force for change was as usual the pressure of events. Insofar as there was an intellectual influence it was the coming together of a coalition of “sound money” economists who wanted to be free to run stable domestic policies and “expansionists” who wanted to experiment with a more rapid increase in domestic nominal demand.
Topic:
Economics, Exchange Rate Policy, Currency, and Exchange Rates
Political Geography:
Global Focus

518. Building Better Institutions

Author:
Rodrigo de Rato
Publication Date:
07-2006
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is a pleasure to be here today at the Cato Institute. I know that Cato believes in competition. Perhaps it is this spirit of competition that led you to schedule today’s conference to coincide with the International Monetary Fund’s research conference and steal the IMF’s managing director and its current and past directors of research as participants. But while you have missed out on our research conference you will not miss out on our research: my talk today is based to a large extent on the findings of our latest World Economic Outlook, which conveniently has the theme “Building Institutions” [IMF 2005a]. My remarks address three questions. First, what have we learned about the importance of institutions in promoting economic development? Second, how we can accelerate the transition to better institutions? And, third, what reforms of international organizations, the IMF in particular, are needed to help this transition?
Topic:
Economics, International Organization, Reform, Economic Development, and Financial Institutions
Political Geography:
Global Focus

519. Trends in Competitive Balance: Is there Evidence for Growing Imbalance in Professional Sport Leagues?

Author:
Arne Feddersen and Wolfgang Maennig
Publication Date:
01-2005
Content Type:
Working Paper
Institution:
Chair for Economic Policy, University of Hamburg
Abstract:
The concept of competitive balance is a central aspect in the literature of sports economics. A popular argumentation of sport functionaries is that dominance of one or a few teams could lead to unequal incomes for the clubs, restrictions in the clubs’ ability to improve sporting performance and ultimately to a loss of attractiveness and loss of income for the league. Following this line of reasoning and alleging a negative trend in competitive sports functionaries often try to implement regulations in team sport leagues. The aim of this paper is to analyze for eight different leagues if there is such a trend existing. For an empirical test for trends in competitive balance of four European soccer leagues (ENG, ESP, GER, ITA) and four US Major Leagues (MLB, NBA, NFL, NHL), OLS regressions with a constant were carried out. For the entire observation period from 1969/70 to 2003/2004, of 48 trends ascertained, only 12 could be observed as being significantly positive (i.e. growing imbalance) with 19 significantly negative (i.e. growing balance). The remaining 17 trends were insignificantly different from zero.
Topic:
Economics, Sports, Soccer, Competitive Balance, and Sports Leagues
Political Geography:
Europe, Global Focus, and United States of America

520. Slow Passthrough Around the World: A New Import for Developing Countries?

Author:
Jeffrey Frankel, David Parsley, and Shang-Jin Wei
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Developing countries traditionally experience passthrough of exchange rate changes that is greater and more rapid than high-income countries experience. This is true equally of the determination of prices of imported goods, prices of local competitors’ products, and the general CPI. But developing countries in the 1990s experienced a rapid downward trend in the degree of passthrough and speed of adjustment, more so than did high-income countries. As a consequence, slow and incomplete passthrough is no longer exclusively a luxury of industrial countries. Using a new data set -- prices of eight narrowly defined brand commodities, observed in 76 countries -- we find empirical support for some of the factors that have been hypothesized in the literature, but not for others. Significant determinants of the passthrough coefficient include per capita incomes, bilateral distance, tariffs, country size, wages, long-term inflation, and long-term exchange rate variability. Some of these factors changed during the 1990s. Part (and only part) of the downward trend in passthrough to imported goods prices, and in turn to competitors’ prices and the CPI, can be explained by changes in the monetary environment – including a fall in long-term inflation. Real wages work to reduce passthrough to competitors’ prices and the CPI, confirming the hypothesized role of distribution and retail costs in pricing to market. Rising distribution costs, due perhaps to the Balassa-Samuelson-Baumol effect, could contribute to the decline in the passthrough coefficient in some developing countries.
Topic:
Economics, Markets, Developing World, Tariffs, Exchange Rate Policy, and Inflation
Political Geography:
Global Focus