Public Economics / Public Finance (Hintermann)Head of Research Unit Prof. Dr.Beat HintermannOverviewMembersPublicationsProjects & CollaborationsProjects & Collaborations OverviewMembersPublicationsProjects & Collaborations Projects & Collaborations 37 foundShow per page10 10 20 50 Pollution, environmental regulation and firm performance Research Project | 2 Project MembersThis project investigates the impact of the EU Emissions Trading Scheme (EU ETS) on firms using administrative data from German manufacturing for the years 2003-2019. We study the implications of climate policy on firms and, indirectly via changes in emissions intensities, on the environment. At the same time, there is mounting evidence that environmental quality also affects firms. The second part of our project focuses on this reverse causality and thus contributes to our knowledge about the interactions between the economy and the environment. Our work builds on our previous research funded by the SNSF involving the same data. The first work package examines the long-term effects of the EU ETS via its impact on regulated firms' product choices. The introduction of a price on greenhouse gas emissions changes the relative production costs, which will be reflected in product prices. This is the subject of our previous research, in which we show that manufacturing firms in Germany pass on their marginal costs fully to consumers. In that previous work, we took a short-term perspective and examined what happens to the output price if the production costs increase by one Euro. In this project, we focus on the long-term implications in the form of product choice. Over time, consumers can be expected to substitute away from emissions-intensive products, which have become costlier, towards greener products. In order to retain market share and profits in the face of this demand response, firms will need to adjust their product portfolio towards less emission-intensive products over time. In WP1, we investigate whether such a shift can be observed among German manufacturing firms, and whether this shift is stronger for the firms covered by the EU ETS. Our second work package builds on the recent literature about the effect of air quality and tem-perature on firm outcomes. There is an older literature that documents detrimental health effects as a consequence of air pollution and temperature variations. This is a first-order reason to establish clean air standards. Environmental policy is usually interpreted as a tradeoff between more environmental quality (and better health) on the one hand, and a reduction in GDP and growth on the other. However, if workers (and thus firms) become more productive if the air quality improves, as suggested by the recent literature, then this tradeoff may in fact be a win-win-situation, at least within certain pollution bounds. To investigate this question, we will link satellite-based data of ambient air pollution and temperature to the location of individual manufacturing plants in Germany and investigate whether changes in environ-mental quality causally affect firms' productivity. We address the potential endogeneity problem between industrial production/productivity and pollution by using an instrumental variable approach that relies on temperature inversions and prevailing wind directions. As the main measure for productivity, we propose to use the total factor productivity that we have computed for the firms in our sample in the context of our previous project. There is a high degree of synergy between the proposed and the previous research as both projects rely on the same administrative firm-level data. The data are very rich in terms of information content, but the prevailing confidentiality rules render them difficult to work with. Having incurred significant fixed costs in terms of our understanding the data and their limitations, we are now in a position where additional time invested will likely have a high benefit-cost ratio. We propose to use the same data to follow up on our previous project with a new set of research questions. Including both a Postdoc and a Ph.D. in the project will furthermore contribute to capacity building in research. We hope that the proposed work will deepen our understanding of the effects of air pollution and its regulation on firms and thus inform policy makers about the costs and benefits of environmental regulation. FV-88 Budgetzyklen in Schweizer Gesundheitsausgaben Research Project | 2 Project MembersThe increase of public health care expenditure (PHCE) of Swiss cantons doubles before elections once a health minister faces re-election. Hospital spending is the main driver for this result. Outcome-based indicators, measuring the number of hospitals and beds, confirm these findings. There are indications of a redistribution pattern within total PHCE, in which additional expenditure in acute care is compensated for in other areas. Opportunistic policies regarding the number of acute care hospitals are found to be particularly strong among health ministers at risk of being voted out of office. The effect of nudges on the external costs of transport Research Project | 3 Project MembersThis study is a randomized controlled trial to investigate the effect of recurring reports on total external costs in the mobility context. The study included 777 participants from Switzerland who tracked their mobility using a GPS tracker app. Results show that the reports reduced the total of measured external costs (including health, congestion, and climate externalities) by 2.0%, though this reduction was not statistically significant. Climate related costs that include CO2 emission reduced by 5.7%. Reports with positive feedback led to reductions in external costs, while negative feedback had a "boomerang effect" with participants generating even higher external costs. The effects of the treatment diminished over time, resulting in no significant long-term effects. Finally, the average participant values the received feedback between 0.62 and 2.42 Swiss francs per report. The implications of Covid-19 for mobility-related energy use and external costs Research Project | 2 Project MembersWe investigate the effects of the Covid-19 pandemic on energy use and emissions in the Swiss transport sector, both in the short and in the long run. The short-run effects will be estimated by means of an existing panel for which we have been tracking individual mobility behaviour since September 2019 and thus have a history spanning the onset of the pandemic. To examine the long-term effects we will carry out a stated choice experiment with a new sample of participants, in which we will estimate likely changes in mobility tool ownership (e.g., ownership of a car or a public transportation pass) as a function of infection rates and the possibility to work from home in the future. The change in mobility tool ownership in different scenarios will be used to compute the long-term changes in energy use and emissions in the transport sector. Mobility Behavior in Switzerland during the COVID-19 Pandemic Research Project | 3 Project MembersWe study the effect of the COVID-19 pandemic and the associated government measures on individual mobility choices in Switzerland. Our data is based on over 1,000 people for which we observe all trips during eight weeks before the pandemic and again for up to 6 months after its onset. We find an overall reduction of travel distances by 60 percent, followed by a gradual recovery during the subsequent re-opening of the economy. Whereas driving distances have almost completely recovered, public transport remains under-used. The introduction of a requirement to wear a mask in public transport had no measurable impact on ridership. We study the heterogeneity of the individual travel response to the pandemic and find that it varies along socio-economic dimensions such as education and household size, with mobility tool ownership, and with personal values and lifestyles. Impact of climate policy on firms and the labor market in Germany Research Project | 2 Project MembersThe project deals with the impact of climate policies on companies and the German labour market. Using official micro-data, the analysis aims to identify the causal impacts of changes in electricity costs on economic performance and employment. Since most climate policies ultimately are related to an increase in electricity prices, this question is essential in assessing the impact of climate policy on economic and labour market outcomes. The effects of electricity prices are investigated both along the intensive and the extensive margin, with a particular focus on the German manufacturing sector. Exploiting variation in regulated electricity network charges at spatial discontinuities and over time, several research questions are addressed: (1) How do electricity prices affect energy use and associated CO2 emissions? (2) How do electricity prices affect economic performance and labour market outcomes? (3) How does electricity price variation affect plant openings and closures? The project thereby assesses the economic vulnerability of specific regions as well as industrial sectors in Germany to changing electricity costs over time and across space. Can cap-and-trade be beneficial for firm cost efficiency? Research Project | 2 Project MembersA persistent concern in the literature on climate policy is that the emissions abatement, which is achieved via environmental regulation, has potentially adverse affects on firms' economic performance. I investigate this issue in the context of the European Union Emissions Trading Scheme (EU ETS) and the German manufacturing sector. My investigation uses confidential data from an administrative firm-level production census. As a measure of the economic performance, I estimate cost efficiencies and their determinants for narrowly defined industries with a stochastic cost frontier (SCF) analysis. In order to directly compare cost efficiencies across treatment groups, I use a stochastic meta frontier (SMF) analysis. I provide additional evidence of the causal impact of the EU ETS on various types of firms` costs with a difference-in-differences (DD) framework. My results indicate that the EU ETS regulation has resulted in a small but significant increase in costs across the German manufacturing sector. This increase is driven mostly by an increase in energy and capital costs. I demonstrate that the potential to increase cost efficiency exists for most industries in the German manufacturing sector. The analysis of the drivers of cost efficiency confirms that in most industries, exporting firms are more cost efficient than their counterparts. In contrast, the results show that innovating firms and firms that are regulated by the EU ETS are less cost efficient than unregulated firms. Cost-effectiveness of Emissions Trading Schemes Research Project | 3 Project MembersThe use of price instruments is often advocated by economists, based on their ability to bring about marginal abatement cost equalisation, and hence to achieve targets at least cost. We use the EU ETS as a case study and test this theoretical prediction. We parametrically estimate separate enhanced hyperbolic distance functions for various industries of the German manufacturing sector and are therefore able to compute the shadow value of CO2 emissions. We are the first to provide firm-level estimates of the marginal cost of CO2 emissions using confidential administrative data for German manufacturing firms between 2005 and 2014. This allows for an unprecedented insight into the cost of the EU flagship climate policy for manufacturing firms. We are able to describe the evolution of the abatement costs over time and across industries, tracking the impact of changes in the policy design and its stringency on the behaviour of the firms in our panel. Our findings provide valuable information for policy makers in the European Union and beyond on the actual level of the costs imposed by climate change policy, and its distributional impacts across firms and industries. The Impact of a Business Cycle Shock on the Gender Wage Gap: Evidence from Switzerland Research Project | 3 Project MembersWe provide first estimates for the impact of an exogenous business cycle shock on the unexplained gender wage gap. Using detailed labour market data for Switzerland, we exploit the unanticipated appreciation of the Swiss Franc in January 2015 ("Swiss Franc Shock") as an exogenous shock with heterogeneous impacts on firms, depending on their relative trade exposure. The semi-parametric identification strategy ensures covariate balance and reduces potential bias compared to estimates using the standard parametric methods in the gender wage gap literature. We identify a widening of the unexplained gender wage gap for sectors with relatively negative trade exposure and a shrinking of the gap for relatively positively exposed sectors, which is due to compositional changes in the respective labour markets. Our results suggest that the negative effects are driven in part by the laying off of so-called "substitutable" workers. The impact of the EU ETS on productivity and markups Research Project | 3 Project MembersWe investigate productivity and cost pass-through of German manufacturing firms using administrative data from 2001 to 2014. Our framework allows for the estimation of quantity-based production functions for multi-product firms while controlling for unobserved productivity shocks and unobserved input quality. Using our parameter estimates, we can compute total factor productivity, markups and marginal costs. We find no effect of the EU ETS on firm productivity or profits for the whole sector, and a positive effect for some industries. Firms pass on shocks to materials costs completely, or even more than completely, whereas pass-through of energy costs is around 35-60%. Although pass-through of energy costs is incomplete, it nevertheless allowed firms to recover more than their total carbon costs due to generous free allocation of allowances. Our results add to the recent literature concerning the causal effects of climate policy on firms and are relevant for policy makers when defining the level of free allowance allocation to industry. 1234 1...4 OverviewMembersPublicationsProjects & Collaborations
Projects & Collaborations 37 foundShow per page10 10 20 50 Pollution, environmental regulation and firm performance Research Project | 2 Project MembersThis project investigates the impact of the EU Emissions Trading Scheme (EU ETS) on firms using administrative data from German manufacturing for the years 2003-2019. We study the implications of climate policy on firms and, indirectly via changes in emissions intensities, on the environment. At the same time, there is mounting evidence that environmental quality also affects firms. The second part of our project focuses on this reverse causality and thus contributes to our knowledge about the interactions between the economy and the environment. Our work builds on our previous research funded by the SNSF involving the same data. The first work package examines the long-term effects of the EU ETS via its impact on regulated firms' product choices. The introduction of a price on greenhouse gas emissions changes the relative production costs, which will be reflected in product prices. This is the subject of our previous research, in which we show that manufacturing firms in Germany pass on their marginal costs fully to consumers. In that previous work, we took a short-term perspective and examined what happens to the output price if the production costs increase by one Euro. In this project, we focus on the long-term implications in the form of product choice. Over time, consumers can be expected to substitute away from emissions-intensive products, which have become costlier, towards greener products. In order to retain market share and profits in the face of this demand response, firms will need to adjust their product portfolio towards less emission-intensive products over time. In WP1, we investigate whether such a shift can be observed among German manufacturing firms, and whether this shift is stronger for the firms covered by the EU ETS. Our second work package builds on the recent literature about the effect of air quality and tem-perature on firm outcomes. There is an older literature that documents detrimental health effects as a consequence of air pollution and temperature variations. This is a first-order reason to establish clean air standards. Environmental policy is usually interpreted as a tradeoff between more environmental quality (and better health) on the one hand, and a reduction in GDP and growth on the other. However, if workers (and thus firms) become more productive if the air quality improves, as suggested by the recent literature, then this tradeoff may in fact be a win-win-situation, at least within certain pollution bounds. To investigate this question, we will link satellite-based data of ambient air pollution and temperature to the location of individual manufacturing plants in Germany and investigate whether changes in environ-mental quality causally affect firms' productivity. We address the potential endogeneity problem between industrial production/productivity and pollution by using an instrumental variable approach that relies on temperature inversions and prevailing wind directions. As the main measure for productivity, we propose to use the total factor productivity that we have computed for the firms in our sample in the context of our previous project. There is a high degree of synergy between the proposed and the previous research as both projects rely on the same administrative firm-level data. The data are very rich in terms of information content, but the prevailing confidentiality rules render them difficult to work with. Having incurred significant fixed costs in terms of our understanding the data and their limitations, we are now in a position where additional time invested will likely have a high benefit-cost ratio. We propose to use the same data to follow up on our previous project with a new set of research questions. Including both a Postdoc and a Ph.D. in the project will furthermore contribute to capacity building in research. We hope that the proposed work will deepen our understanding of the effects of air pollution and its regulation on firms and thus inform policy makers about the costs and benefits of environmental regulation. FV-88 Budgetzyklen in Schweizer Gesundheitsausgaben Research Project | 2 Project MembersThe increase of public health care expenditure (PHCE) of Swiss cantons doubles before elections once a health minister faces re-election. Hospital spending is the main driver for this result. Outcome-based indicators, measuring the number of hospitals and beds, confirm these findings. There are indications of a redistribution pattern within total PHCE, in which additional expenditure in acute care is compensated for in other areas. Opportunistic policies regarding the number of acute care hospitals are found to be particularly strong among health ministers at risk of being voted out of office. The effect of nudges on the external costs of transport Research Project | 3 Project MembersThis study is a randomized controlled trial to investigate the effect of recurring reports on total external costs in the mobility context. The study included 777 participants from Switzerland who tracked their mobility using a GPS tracker app. Results show that the reports reduced the total of measured external costs (including health, congestion, and climate externalities) by 2.0%, though this reduction was not statistically significant. Climate related costs that include CO2 emission reduced by 5.7%. Reports with positive feedback led to reductions in external costs, while negative feedback had a "boomerang effect" with participants generating even higher external costs. The effects of the treatment diminished over time, resulting in no significant long-term effects. Finally, the average participant values the received feedback between 0.62 and 2.42 Swiss francs per report. The implications of Covid-19 for mobility-related energy use and external costs Research Project | 2 Project MembersWe investigate the effects of the Covid-19 pandemic on energy use and emissions in the Swiss transport sector, both in the short and in the long run. The short-run effects will be estimated by means of an existing panel for which we have been tracking individual mobility behaviour since September 2019 and thus have a history spanning the onset of the pandemic. To examine the long-term effects we will carry out a stated choice experiment with a new sample of participants, in which we will estimate likely changes in mobility tool ownership (e.g., ownership of a car or a public transportation pass) as a function of infection rates and the possibility to work from home in the future. The change in mobility tool ownership in different scenarios will be used to compute the long-term changes in energy use and emissions in the transport sector. Mobility Behavior in Switzerland during the COVID-19 Pandemic Research Project | 3 Project MembersWe study the effect of the COVID-19 pandemic and the associated government measures on individual mobility choices in Switzerland. Our data is based on over 1,000 people for which we observe all trips during eight weeks before the pandemic and again for up to 6 months after its onset. We find an overall reduction of travel distances by 60 percent, followed by a gradual recovery during the subsequent re-opening of the economy. Whereas driving distances have almost completely recovered, public transport remains under-used. The introduction of a requirement to wear a mask in public transport had no measurable impact on ridership. We study the heterogeneity of the individual travel response to the pandemic and find that it varies along socio-economic dimensions such as education and household size, with mobility tool ownership, and with personal values and lifestyles. Impact of climate policy on firms and the labor market in Germany Research Project | 2 Project MembersThe project deals with the impact of climate policies on companies and the German labour market. Using official micro-data, the analysis aims to identify the causal impacts of changes in electricity costs on economic performance and employment. Since most climate policies ultimately are related to an increase in electricity prices, this question is essential in assessing the impact of climate policy on economic and labour market outcomes. The effects of electricity prices are investigated both along the intensive and the extensive margin, with a particular focus on the German manufacturing sector. Exploiting variation in regulated electricity network charges at spatial discontinuities and over time, several research questions are addressed: (1) How do electricity prices affect energy use and associated CO2 emissions? (2) How do electricity prices affect economic performance and labour market outcomes? (3) How does electricity price variation affect plant openings and closures? The project thereby assesses the economic vulnerability of specific regions as well as industrial sectors in Germany to changing electricity costs over time and across space. Can cap-and-trade be beneficial for firm cost efficiency? Research Project | 2 Project MembersA persistent concern in the literature on climate policy is that the emissions abatement, which is achieved via environmental regulation, has potentially adverse affects on firms' economic performance. I investigate this issue in the context of the European Union Emissions Trading Scheme (EU ETS) and the German manufacturing sector. My investigation uses confidential data from an administrative firm-level production census. As a measure of the economic performance, I estimate cost efficiencies and their determinants for narrowly defined industries with a stochastic cost frontier (SCF) analysis. In order to directly compare cost efficiencies across treatment groups, I use a stochastic meta frontier (SMF) analysis. I provide additional evidence of the causal impact of the EU ETS on various types of firms` costs with a difference-in-differences (DD) framework. My results indicate that the EU ETS regulation has resulted in a small but significant increase in costs across the German manufacturing sector. This increase is driven mostly by an increase in energy and capital costs. I demonstrate that the potential to increase cost efficiency exists for most industries in the German manufacturing sector. The analysis of the drivers of cost efficiency confirms that in most industries, exporting firms are more cost efficient than their counterparts. In contrast, the results show that innovating firms and firms that are regulated by the EU ETS are less cost efficient than unregulated firms. Cost-effectiveness of Emissions Trading Schemes Research Project | 3 Project MembersThe use of price instruments is often advocated by economists, based on their ability to bring about marginal abatement cost equalisation, and hence to achieve targets at least cost. We use the EU ETS as a case study and test this theoretical prediction. We parametrically estimate separate enhanced hyperbolic distance functions for various industries of the German manufacturing sector and are therefore able to compute the shadow value of CO2 emissions. We are the first to provide firm-level estimates of the marginal cost of CO2 emissions using confidential administrative data for German manufacturing firms between 2005 and 2014. This allows for an unprecedented insight into the cost of the EU flagship climate policy for manufacturing firms. We are able to describe the evolution of the abatement costs over time and across industries, tracking the impact of changes in the policy design and its stringency on the behaviour of the firms in our panel. Our findings provide valuable information for policy makers in the European Union and beyond on the actual level of the costs imposed by climate change policy, and its distributional impacts across firms and industries. The Impact of a Business Cycle Shock on the Gender Wage Gap: Evidence from Switzerland Research Project | 3 Project MembersWe provide first estimates for the impact of an exogenous business cycle shock on the unexplained gender wage gap. Using detailed labour market data for Switzerland, we exploit the unanticipated appreciation of the Swiss Franc in January 2015 ("Swiss Franc Shock") as an exogenous shock with heterogeneous impacts on firms, depending on their relative trade exposure. The semi-parametric identification strategy ensures covariate balance and reduces potential bias compared to estimates using the standard parametric methods in the gender wage gap literature. We identify a widening of the unexplained gender wage gap for sectors with relatively negative trade exposure and a shrinking of the gap for relatively positively exposed sectors, which is due to compositional changes in the respective labour markets. Our results suggest that the negative effects are driven in part by the laying off of so-called "substitutable" workers. The impact of the EU ETS on productivity and markups Research Project | 3 Project MembersWe investigate productivity and cost pass-through of German manufacturing firms using administrative data from 2001 to 2014. Our framework allows for the estimation of quantity-based production functions for multi-product firms while controlling for unobserved productivity shocks and unobserved input quality. Using our parameter estimates, we can compute total factor productivity, markups and marginal costs. We find no effect of the EU ETS on firm productivity or profits for the whole sector, and a positive effect for some industries. Firms pass on shocks to materials costs completely, or even more than completely, whereas pass-through of energy costs is around 35-60%. Although pass-through of energy costs is incomplete, it nevertheless allowed firms to recover more than their total carbon costs due to generous free allocation of allowances. Our results add to the recent literature concerning the causal effects of climate policy on firms and are relevant for policy makers when defining the level of free allowance allocation to industry. 1234 1...4
Pollution, environmental regulation and firm performance Research Project | 2 Project MembersThis project investigates the impact of the EU Emissions Trading Scheme (EU ETS) on firms using administrative data from German manufacturing for the years 2003-2019. We study the implications of climate policy on firms and, indirectly via changes in emissions intensities, on the environment. At the same time, there is mounting evidence that environmental quality also affects firms. The second part of our project focuses on this reverse causality and thus contributes to our knowledge about the interactions between the economy and the environment. Our work builds on our previous research funded by the SNSF involving the same data. The first work package examines the long-term effects of the EU ETS via its impact on regulated firms' product choices. The introduction of a price on greenhouse gas emissions changes the relative production costs, which will be reflected in product prices. This is the subject of our previous research, in which we show that manufacturing firms in Germany pass on their marginal costs fully to consumers. In that previous work, we took a short-term perspective and examined what happens to the output price if the production costs increase by one Euro. In this project, we focus on the long-term implications in the form of product choice. Over time, consumers can be expected to substitute away from emissions-intensive products, which have become costlier, towards greener products. In order to retain market share and profits in the face of this demand response, firms will need to adjust their product portfolio towards less emission-intensive products over time. In WP1, we investigate whether such a shift can be observed among German manufacturing firms, and whether this shift is stronger for the firms covered by the EU ETS. Our second work package builds on the recent literature about the effect of air quality and tem-perature on firm outcomes. There is an older literature that documents detrimental health effects as a consequence of air pollution and temperature variations. This is a first-order reason to establish clean air standards. Environmental policy is usually interpreted as a tradeoff between more environmental quality (and better health) on the one hand, and a reduction in GDP and growth on the other. However, if workers (and thus firms) become more productive if the air quality improves, as suggested by the recent literature, then this tradeoff may in fact be a win-win-situation, at least within certain pollution bounds. To investigate this question, we will link satellite-based data of ambient air pollution and temperature to the location of individual manufacturing plants in Germany and investigate whether changes in environ-mental quality causally affect firms' productivity. We address the potential endogeneity problem between industrial production/productivity and pollution by using an instrumental variable approach that relies on temperature inversions and prevailing wind directions. As the main measure for productivity, we propose to use the total factor productivity that we have computed for the firms in our sample in the context of our previous project. There is a high degree of synergy between the proposed and the previous research as both projects rely on the same administrative firm-level data. The data are very rich in terms of information content, but the prevailing confidentiality rules render them difficult to work with. Having incurred significant fixed costs in terms of our understanding the data and their limitations, we are now in a position where additional time invested will likely have a high benefit-cost ratio. We propose to use the same data to follow up on our previous project with a new set of research questions. Including both a Postdoc and a Ph.D. in the project will furthermore contribute to capacity building in research. We hope that the proposed work will deepen our understanding of the effects of air pollution and its regulation on firms and thus inform policy makers about the costs and benefits of environmental regulation.
FV-88 Budgetzyklen in Schweizer Gesundheitsausgaben Research Project | 2 Project MembersThe increase of public health care expenditure (PHCE) of Swiss cantons doubles before elections once a health minister faces re-election. Hospital spending is the main driver for this result. Outcome-based indicators, measuring the number of hospitals and beds, confirm these findings. There are indications of a redistribution pattern within total PHCE, in which additional expenditure in acute care is compensated for in other areas. Opportunistic policies regarding the number of acute care hospitals are found to be particularly strong among health ministers at risk of being voted out of office.
The effect of nudges on the external costs of transport Research Project | 3 Project MembersThis study is a randomized controlled trial to investigate the effect of recurring reports on total external costs in the mobility context. The study included 777 participants from Switzerland who tracked their mobility using a GPS tracker app. Results show that the reports reduced the total of measured external costs (including health, congestion, and climate externalities) by 2.0%, though this reduction was not statistically significant. Climate related costs that include CO2 emission reduced by 5.7%. Reports with positive feedback led to reductions in external costs, while negative feedback had a "boomerang effect" with participants generating even higher external costs. The effects of the treatment diminished over time, resulting in no significant long-term effects. Finally, the average participant values the received feedback between 0.62 and 2.42 Swiss francs per report.
The implications of Covid-19 for mobility-related energy use and external costs Research Project | 2 Project MembersWe investigate the effects of the Covid-19 pandemic on energy use and emissions in the Swiss transport sector, both in the short and in the long run. The short-run effects will be estimated by means of an existing panel for which we have been tracking individual mobility behaviour since September 2019 and thus have a history spanning the onset of the pandemic. To examine the long-term effects we will carry out a stated choice experiment with a new sample of participants, in which we will estimate likely changes in mobility tool ownership (e.g., ownership of a car or a public transportation pass) as a function of infection rates and the possibility to work from home in the future. The change in mobility tool ownership in different scenarios will be used to compute the long-term changes in energy use and emissions in the transport sector.
Mobility Behavior in Switzerland during the COVID-19 Pandemic Research Project | 3 Project MembersWe study the effect of the COVID-19 pandemic and the associated government measures on individual mobility choices in Switzerland. Our data is based on over 1,000 people for which we observe all trips during eight weeks before the pandemic and again for up to 6 months after its onset. We find an overall reduction of travel distances by 60 percent, followed by a gradual recovery during the subsequent re-opening of the economy. Whereas driving distances have almost completely recovered, public transport remains under-used. The introduction of a requirement to wear a mask in public transport had no measurable impact on ridership. We study the heterogeneity of the individual travel response to the pandemic and find that it varies along socio-economic dimensions such as education and household size, with mobility tool ownership, and with personal values and lifestyles.
Impact of climate policy on firms and the labor market in Germany Research Project | 2 Project MembersThe project deals with the impact of climate policies on companies and the German labour market. Using official micro-data, the analysis aims to identify the causal impacts of changes in electricity costs on economic performance and employment. Since most climate policies ultimately are related to an increase in electricity prices, this question is essential in assessing the impact of climate policy on economic and labour market outcomes. The effects of electricity prices are investigated both along the intensive and the extensive margin, with a particular focus on the German manufacturing sector. Exploiting variation in regulated electricity network charges at spatial discontinuities and over time, several research questions are addressed: (1) How do electricity prices affect energy use and associated CO2 emissions? (2) How do electricity prices affect economic performance and labour market outcomes? (3) How does electricity price variation affect plant openings and closures? The project thereby assesses the economic vulnerability of specific regions as well as industrial sectors in Germany to changing electricity costs over time and across space.
Can cap-and-trade be beneficial for firm cost efficiency? Research Project | 2 Project MembersA persistent concern in the literature on climate policy is that the emissions abatement, which is achieved via environmental regulation, has potentially adverse affects on firms' economic performance. I investigate this issue in the context of the European Union Emissions Trading Scheme (EU ETS) and the German manufacturing sector. My investigation uses confidential data from an administrative firm-level production census. As a measure of the economic performance, I estimate cost efficiencies and their determinants for narrowly defined industries with a stochastic cost frontier (SCF) analysis. In order to directly compare cost efficiencies across treatment groups, I use a stochastic meta frontier (SMF) analysis. I provide additional evidence of the causal impact of the EU ETS on various types of firms` costs with a difference-in-differences (DD) framework. My results indicate that the EU ETS regulation has resulted in a small but significant increase in costs across the German manufacturing sector. This increase is driven mostly by an increase in energy and capital costs. I demonstrate that the potential to increase cost efficiency exists for most industries in the German manufacturing sector. The analysis of the drivers of cost efficiency confirms that in most industries, exporting firms are more cost efficient than their counterparts. In contrast, the results show that innovating firms and firms that are regulated by the EU ETS are less cost efficient than unregulated firms.
Cost-effectiveness of Emissions Trading Schemes Research Project | 3 Project MembersThe use of price instruments is often advocated by economists, based on their ability to bring about marginal abatement cost equalisation, and hence to achieve targets at least cost. We use the EU ETS as a case study and test this theoretical prediction. We parametrically estimate separate enhanced hyperbolic distance functions for various industries of the German manufacturing sector and are therefore able to compute the shadow value of CO2 emissions. We are the first to provide firm-level estimates of the marginal cost of CO2 emissions using confidential administrative data for German manufacturing firms between 2005 and 2014. This allows for an unprecedented insight into the cost of the EU flagship climate policy for manufacturing firms. We are able to describe the evolution of the abatement costs over time and across industries, tracking the impact of changes in the policy design and its stringency on the behaviour of the firms in our panel. Our findings provide valuable information for policy makers in the European Union and beyond on the actual level of the costs imposed by climate change policy, and its distributional impacts across firms and industries.
The Impact of a Business Cycle Shock on the Gender Wage Gap: Evidence from Switzerland Research Project | 3 Project MembersWe provide first estimates for the impact of an exogenous business cycle shock on the unexplained gender wage gap. Using detailed labour market data for Switzerland, we exploit the unanticipated appreciation of the Swiss Franc in January 2015 ("Swiss Franc Shock") as an exogenous shock with heterogeneous impacts on firms, depending on their relative trade exposure. The semi-parametric identification strategy ensures covariate balance and reduces potential bias compared to estimates using the standard parametric methods in the gender wage gap literature. We identify a widening of the unexplained gender wage gap for sectors with relatively negative trade exposure and a shrinking of the gap for relatively positively exposed sectors, which is due to compositional changes in the respective labour markets. Our results suggest that the negative effects are driven in part by the laying off of so-called "substitutable" workers.
The impact of the EU ETS on productivity and markups Research Project | 3 Project MembersWe investigate productivity and cost pass-through of German manufacturing firms using administrative data from 2001 to 2014. Our framework allows for the estimation of quantity-based production functions for multi-product firms while controlling for unobserved productivity shocks and unobserved input quality. Using our parameter estimates, we can compute total factor productivity, markups and marginal costs. We find no effect of the EU ETS on firm productivity or profits for the whole sector, and a positive effect for some industries. Firms pass on shocks to materials costs completely, or even more than completely, whereas pass-through of energy costs is around 35-60%. Although pass-through of energy costs is incomplete, it nevertheless allowed firms to recover more than their total carbon costs due to generous free allocation of allowances. Our results add to the recent literature concerning the causal effects of climate policy on firms and are relevant for policy makers when defining the level of free allowance allocation to industry.
