Subjective well-being and basic needs: Evidence from rural Guatemala

This paper deals with basic needs fulfillment interpreted in a subjective way. We develop a framework in which the basic needs of households in developing areas are valued from a subjective point of view. We estimate how certain indicators and assets influence basic needs perception. We compare income and perceived basic needs poverty measures, finding that they mismatch. We conclude that income-based approaches should be complemented with other indicators such as subjective satisfaction measures to understand development and measure poverty.Subjective well-being, basic needs, poverty, Guatemala, Highlands.

Do interregional transfers improve the economic performance of poor regions? The case of Spain

The 17 regional governments of Spain receive grants from both the central government and the European Union. The grants are generally redistributive and are intended to stimulate economic activity in the poorer regions. We evaluate the effectiveness of the grants by comparing the economic performance of the regions before and after the implementation of the grant programs using a differences--in-- differences approach. We find that these policies have not been effective at stimulating private investment or improving the overall economies of the poorer regions.Regional grants and economic development

Tax incentives and the city

It is difficult to justify tax incentives within the existing economics literature on tax competition. We develop a model in which communities are interested in attracting firms not only for their own capital but also for the “concentration externalities,” a form of agglomeration economies, their location bestows on existing firms. We find that it is efficient in this case for communities to offer tax incentives, defined as a tax rate below the benefit tax level, to firms. We present the recent relocation of the Boeing Corporation's headquarters from Seattle to Chicago as a case study.Tax incentives, concentration externalities, agglomeration economies, tax competition, benefit tax

Fiscal decentralization in Spain: An asymmetric transition to democracy

Asymmetric fiscal decentralization, by which we mean different fiscal arrangements between the central government and different groups of, or individual, lower-level governments, may be justified from an economic efficiency perspective. As argued by Tiebout (1956), Oates (1972) and others, a decentralized system of regional and local governments is better able to accommodate differences in tastes for public goods and services. This efficiency argument calls for decentralization of fiscal authority to regional and local governments, but not necessarily asymmetric decentralization. However, when the differences in tastes for public goods and services arise out of differences in history, culture and language across regions of a country, asymmetric treatment may be justified. History, culture and language may influence how a group of people (a region) views autonomy, independence and fiscal authority. Some regions may have had experience with autonomous government in the past, they may have a culture that is strongly reliant upon (or leery of) the central government, or they may be fearful of losing their separate languages if they do not have special arrangements. To accommodate differences in taste for independence, autonomy, and fiscal authority, it may be necessary to have different fiscal arrangements between the central government and the different regions comprising the country.Fiscal decentralization, autonomous communities, asymmetric devolution, Spanish regions, fiscal imbalance

The Demand for Excess Reserves in the Euro Area and the Impact of the Current Credit Crisis

One of the risks that banks need to manage, in their financial intermediation activities, is liquidity risk. Thus, banks hold reserves for precautionary reasons, in order to keep enough cash to meet their obligations. In this work, we analyze the demand for excess reserves by Euro Area banks, since the change in the framework of the single monetary policy in March 2004. Our main conclusions are that there is a positive relationship between the demand for reserves and its financing cost and also that the environment of uncertainty present in the credit crisis is not significant in the demand for excess reserves: the ECB achieved control over the money market tensions.banks; excess reserves; liquidity risk

The link between water access and subjective well-being: some methods and proposals.

The study of happiness or subjective well-being has traditionally been studied within the disciplines of psychology or sociology. Although economics has contemplated happiness in research terms, it has only recently been studied in any depth. In this paper we offer several proposals in order to investigate the relationship between water access and happiness, suggesting some situations that would merit further research. Moreover, we have included some methodological notes in order to achieve this objective. This relationship can be useful in two ways. Firstly, it can favour the contemplation of water access as a human right. Secondly, it can serve as a framework for the decision-making process carried out by Governments and NGOs in developing countries.

Why do differences in the degree of fiscal decentralization endure?

A notable difference between the U.S. and many countries in Europe is in the degree of fiscal decentralization. Regional (and local) governments in the U.S. have significant autonomy in setting their own taxes and determining how to spend their revenues. This is not true of their counterparts in Spain, France, the United Kingdom, Czech Republic and many other European countries. In recent years, many countries formerly subject to dictatorships or communism have been considering decentralizing fiscal responsibility to sub-national governments as part of the process of democratization (see Bird and Ebel, forthcoming). Yet, much of Europe remains immune to adopting effective decentralization in which sub-national units have true taxing authority.Fiscal decentralization, regional solidarity, efficiency, preferences for equality

Dynamic panel data: A useful technique in experiments

Numerous experimental studies use a panel approach to analyze repeated experiments involving a large number of periods. They use “static” panel techniques and do not incorporate any temporal dependency (lags) of the dependent variable. This paper introduces dynamic panel data techniques to experimental economists. This is a standard tool in many other fields of economics and might also be useful in our discipline. It uses the lags of the dependent variable as explanatory variables. Although the coefficients on lagged dependent variables might be far from our interest, the introduction of these lags becomes crucial to control for the dynamics of the process. To show the advantages of this technique, we have compared two datasets using static and dynamic panel data. We conclude that the use of dynamic panel data models in the context of experiments allows to unravel new relationships between experimental variables and highlighting new paths in behaviors