Equivalence Scales for the Former West Germany

Equivalence scales provide answers to questions like how much a household with four children needs to spend compared to a household with two children or how much a childless couple needs to spend compared to a single person household to attain the same welfare level. These are important questions for child allowances, social benefits and to assess the cost of children over the life-cycle for example. The latter is also interesting from a theoretical point of view, especially if future events are allowed to be uncertain. We discuss equivalence scales in an intertemporal setting with uncertainty. To estimate equivalence scales we use subjective data on satisfaction with life and satisfaction with income to represent the welfare level. Because satisfaction is measured on a discrete scale we use limited dependent variable models in estimation. The results are based on a panel from German households (GSOEP). Using satisfaction with life data we find that larger households do not need any additional income to be as satisfied with their life as a couple. Using satisfaction with income, however, indicates that an increase in the household size leads to a significant drop in the satisfaction with their income. This result is used to compute equivalence scales.(lifetime) equivalence scales;panel data;parametric models

Prepayment Behavior of Dutch Mortgagors: An Empirical Analysis

The booming Dutch mortgage market and the development of a promising secondary mortgage market in the Netherlands stress the need for an accurate mortgage prepayment model that incorporates typical Dutch market and contract characteristics.One of those typical Dutch features prescribes that each calendar year the mortgagor is allowed to prepay penalty-free 10 to 20 percent of the original loan amount.As a consequence, Dutch mortgagees suffer a loss when borrowers prepay their loans.This risk, once again, underlines the importance of a prepayment model that focuses on the Dutch market.To derive such model we use historical data on mortgages originated between January 1989 and June 1999.We estimate separate models for two popular redemption types: savings mortgages and interest-only mortgages.In both models we allow for suboptimal prepayment behaviour.The results clearly indicate that prepayment rates depend on interest rates and the age of the mortgage contract.Moreover, Dutch prepayment rates peak in the month December.mortgages;econometric models

Limited dependent variable models for panel data

Many economic phenomena require limited variable models for an appropriate treatment. In addition, panel data models allow the inclusion of unobserved individual-specific effects. These models are combined in this thesis. Distributional assumptions in the limited dependent variable models are important for consistency of the estimators. Parametric models require strong distributional assumptions. The hypothesis of correct specification of these distributional assumptions is often rejected. Therefore these assumptions are relaxed, resulting in semiparametric models. The empirical evidence shows that the results based on less restrictive semiparametric models often differ in terms of both parameter estimates and economically interesting issues like Engel curves and equivalence scales. Testing the specification of the semiparametric models sometimes leads to the conclusion that an even more general model is required.

An Analysis of Housing Expenditure Using Semiparametric Cross-Section Models

In this paper we model expenditure on housing for owners and renters by means of endogenous switching regression models using cross-section data. We explain the share of housing in total expenditure from family characteristics and total expenditure, where the latter is allowed to be endogenous. We apply various existing parametric and semiparametric techniques for cross-section data. Exogeneity of total expenditure is rejected for the parametric models but not for most semiparametric models. The results are compared on the basis of graphs of the estimated relationship between the budget share spent on housing and the logarithm of total expenditure and on the baisi of budget elasticities.sample selection;Engel curves;semiparametric cross-section models

Equivalence Scales for the Former West Germany

Equivalence scales provide answers to questions like how much a household with four children needs to spend compared to a household with two children or how much a childless couple needs to spend compared to a single person household to attain the same welfare level. These are important questions for child allowances, social benefits and to assess the cost of children over the life-cycle for example. The latter is also interesting from a theoretical point of view, especially if future events are allowed to be uncertain. We discuss equivalence scales in an intertemporal setting with uncertainty. To estimate equivalence scales we use subjective data on satisfaction with life and satisfaction with income to represent the welfare level. Because satisfaction is measured on a discrete scale we use limited dependent variable models in estimation. The results are based on a panel from German households (GSOEP). Using satisfaction with life data we find that larger households do not need any additional income to be as satisfied with their life as a couple. Using satisfaction with income, however, indicates that an increase in the household size leads to a significant drop in the satisfaction with their income. This result is used to compute equivalence scales

The Apparent Fractal Conjecture

This short communication advances the hypothesis that the observed fractal structure of large-scale distribution of galaxies is due to a geometrical effect, which arises when observational quantities relevant for the characterization of a cosmological fractal structure are calculated along the past light cone. If this hypothesis proves, even partially, correct, most, if not all, objections raised against fractals in cosmology may be solved. For instance, under this view the standard cosmology has zero average density, as predicted by an infinite fractal structure, with, at the same time, the cosmological principle remaining valid. The theoretical results which suggest this conjecture are reviewed, as well as possible ways of checking its validity.Comment: 6 pages, LaTeX. Text unchanged. Two references corrected. Contributed paper presented at the "South Africa Relativistic Cosmology Conference in Honour of George F. R. Ellis 60th Birthday"; University of Cape Town, February 1-5, 199

An Analysis of Housing Expenditure Using Semiparametric Models and Panel Data

In this paper we model expenditure on housing for owners and renters by means of endogenous switching regression models for panel data. We explain the share of housing in total expenditure from a household specific effect, family characteristics and total expenditure, where the latter is allowed to be endogenous. We consider both random and fixed effects panel data models. We compare estimates for the random effects model with estimates for the linear panel data model in which selection only enters through the fixed effects and with estimates allowing for fixed effects and a more general type of selectivity. Differences appear to be substantial. The results imply that the random effects model as well as the linear panel data model are too restrictive.sample selection;Engel curves;semiparametric models;panel data

Prepayment Behavior of Dutch Mortgagors:An Empirical Analysis

The booming Dutch mortgage market and the development of a promising secondary mortgage market in the Netherlands stress the need for an accurate mortgage prepayment model that incorporates typical Dutch market and contract characteristics.One of those typical Dutch features prescribes that each calendar year the mortgagor is allowed to prepay penalty-free 10 to 20 percent of the original loan amount.As a consequence, Dutch mortgagees suffer a loss when borrowers prepay their loans.This risk, once again, underlines the importance of a prepayment model that focuses on the Dutch market.To derive such model we use historical data on mortgages originated between January 1989 and June 1999.We estimate separate models for two popular redemption types: savings mortgages and interest-only mortgages.In both models we allow for suboptimal prepayment behaviour.The results clearly indicate that prepayment rates depend on interest rates and the age of the mortgage contract.Moreover, Dutch prepayment rates peak in the month December

Prepayment Behavior of Dutch Mortgagors:An Empirical Analysis

The booming Dutch mortgage market and the development of a promising secondary mortgage market in the Netherlands stress the need for an accurate mortgage prepayment model that incorporates typical Dutch market and contract characteristics.One of those typical Dutch features prescribes that each calendar year the mortgagor is allowed to prepay penalty-free 10 to 20 percent of the original loan amount.As a consequence, Dutch mortgagees suffer a loss when borrowers prepay their loans.This risk, once again, underlines the importance of a prepayment model that focuses on the Dutch market.To derive such model we use historical data on mortgages originated between January 1989 and June 1999.We estimate separate models for two popular redemption types: savings mortgages and interest-only mortgages.In both models we allow for suboptimal prepayment behaviour.The results clearly indicate that prepayment rates depend on interest rates and the age of the mortgage contract.Moreover, Dutch prepayment rates peak in the month December.

First-Principle Description of Correlation Effects in Layered Materials

We present a first-principles description of anisotropic materials characterized by having both weak (dispersion-like) and strong covalent bonds, based on the Adiabatic--Connection Fluctuation--Dissipation Theorem within Density Functional Theory. For hexagonal boron nitride the in-plane and out of plane bonding as well as vibrational dynamics are well described both at equilibrium and when the layers are pulled apart. Also bonding in covalent and ionic solids is described. The formalism allows to ping-down the deficiencies of common exchange-correlation functionals and provides insight towards the inclusion of dispersion interactions into the correlation functional.Comment: Accepted for publication in Physical Review Letter