Publications

Abstract The existing literature in insurance economics has shown that narrow framing can explain why people buy too little insurance compared to what standard theory predicts. However, there is also ample evidence suggesting people sometimes buy too much insurance. In this paper, we assume S-shaped narrow framing, i.e., the local utility function for evaluating the net insurance payoff is convex in the loss domain but concave in the gain domain, and show that it can reconcile with both insurance puzzles simultaneously. Especially, we show the policyholder under S-shaped narrow framing is more likely to underinsure more negatively skewed risks of loss but to overinsure less negatively skewed risks of loss when only coinsurance is offered. We further characterize the optimal insurance scheme under S-shaped narrow framing while incentive compatibility is satisfied. It contains a straight deductible when the net insurance payoff is negative but partial insurance when the net insurance payoff is positive.
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Abstract We propose a new measure of systemic risk based on interconnectedness, defined as the level of direct and indirect links between financial institutions in a correlation-based network. Deriving interconnectedness in terms of risk, we empirically show that within a financial network, indirect links are strengthened during systemic events. The relevance of our measure is illustrated at both local and global levels. Our framework offers policymakers a useful toolbox for exploring the real-time topology of the complex structure of dependencies in financial systems and for measuring the consequences of regulatory decisions.
Keywords Spillover, Systemic risk, Interconnectedness, Financial networks
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Abstract Soon after the onset of the COVID-19 pandemic, the French government decided to still hold the first round of the 2020 municipal elections as scheduled on March 15. What was the impact of these elections on the spread of COVID-19 in France? Answering this question leads to intricate econometric issues as omitted variables may drive both epidemiological dynamics and electoral turnout, and as a national lockdown was imposed at almost the same time as the elections. In order to disentangle the effect of the elections from that of confounding factors, we first predict each department’s epidemiological dynamics using information up to the election. We then take advantage of differences in electoral turnout across departments to identify the impact of the election on prediction errors in hospitalizations. We report a detrimental effect of the first round of the election on hospitalizations in locations that were already at relatively advanced stages of the epidemic. Estimates suggest that the elections accounted for at least 3,000 hospitalizations, or 11% of all hospitalizations by the end of March. Given the sizable health cost of holding elections during an epidemic, promoting ways of voting that reduce exposure to COVID-19 is key until the pandemic shows signs of abating.
Keywords Prediction errors, Municipal elections, Electoral turnout, Hospitalizations, COVID-19, Prediction errors
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Abstract Dans le cadre du premier appel à projet « Flash-COVID-19 » de l’Agence nationale de la recherche, nous avons mobilisé des méthodes récentes de l’économie comportementale afin de mieux comprendre les décisions des individus face à la crise sanitaire due à la pandémie de COVID-19 ( coronavirus disease 2019 ) et d’identifier les paramètres pouvant influencer le respect des mesures sanitaires. Cet article introduit brièvement l’économie comportementale, présente un compte rendu des attendus du projet CONFINOBS (Observance et observation des mesures barrières et du confinement : une approche d’économie comportementale) et de ses méthodes, puis il propose une synthèse des résultats obtenus.
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Abstract In this paper, we investigate whether small- or mid-cap stocks can be considered as an alternative asset class that allows for the enhancement of the mean-variance characteristics of an investor’s portfolio. Using all the French stocks listed on the Euronext Stock Market from January 2000 to December 2018, we first examine this issue from the perspective of an investor that invests in familiar asset classes such as domestic large-cap stocks and is willing to add small- and/or mid-cap domestic stocks to his or her portfolio. We also examine this issue from the perspective of a French investor who has internationally diversified his portfolio using only international large- cap indices. Finally, we attempt to measure whether the size-based performance of a portfolio varies over time. We show that investors may benefit from adding micro- or small-cap stocks to their portfolios due to the fact that size-based portfolio performance varies over time. In particular, we find that small and mid-cap stocks behave differently to largecap stocks during and after the financial crisis, meaning that they can be considered as an alternative profitable asset class in portfolio management. This result is robust to different methodologies used to classify size-based portfolios as well as to different sets of benchmark assets. Except in the case of large-cap stocks at the beginning of the financial crisis, the spanning hypothesis cannot be rejected for small-, mid- or large-cap portfolios during the period spanning from 2007-2012, but the hypothesis is rejected for all small-cap portfolios during the period spanning from 2012-2018. Our results show that French small-cap stocks behave differently than mid- and large-cap stocks behave, and they also differ when their behavior is compared to that of other international asset classes.
Keywords Asset allocation, Portfolio diversification, Small- and mid-cap stocks
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Abstract A durable good monopolist faces a continuum of heterogeneous customers who make purchase decisions by comparing present and expected price-quality offers. The monopolist designs a sequence of price-quality menus to segment the market. We consider the Markov perfect equilibrium (MPE) of a game where the monopolist is unable to commit to future price-quality menus. We obtain the novel results that: (a) under certain conditions, the monopolist covers the whole market in the first period (even when a static Mussa–Rosen monopolist would not cover the whole market), because this is a strategic means to convince customers that lower prices would not be offered in future periods and that (b) this can happen only under the stage-wise Stackelberg leadership assumption (whereby consumers base their expectations on the value of the state variable at the end of the period). Conditions under which MPE necessarily involves sequentially trading are also derived.
Keywords Product quality, Durable good monopoly, Second-degree price discrimination, Coase conjecture
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Abstract We revisit the canonical policy of eliminating capital taxation by increasing labor taxation in a endogenous-labor, heterogeneous-agent model with income and wealth heterogeneity, when the government is subject to a strict (per-period) balanced-budget constraint. By contrast with its non-budget neutral equivalent-associated with a constant tax rate over time and a permanent increase in the level of public debt-we show that the obtained endogenous path for the labor tax rate is sharply increasing in the initial period and decreasing over time. The policy then generates a deeper recession in the short-run and a greater expansion in the long-run, as well as a smaller decline in wealth inequality associated with a reduced incentive to save for precautionary motives. Overall, the policy still generates significant losses in average welfare.
Keywords Wealth Redistribution, Heterogeneous agents, Tax Composition, Capital Tax Cut, Fiscal policy
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Abstract Le rapport entre positif et normatif est une question méthodologique et théorique centrale en économie. À ce titre, les débats de la littérature spécialisée réclament une synthèse précise, à défaut de la cartographie exhaustive qui paraît une gageure. Le présent ouvrage le reconnaît volontiers en montrant qu’il est pertinent de revenir sur ces enjeux et qu’il est opportun d’élaborer ou d’ouvrir certaines perspectives jusqu’ici peut-être moins explorées. Le point de vue des coordinateurs de ce volume part du constat que l’étude du rapport entre positif et normatif reste précieuse pour la pensée et la philosophie économiques : l’enquête met en évidence des distinctions essentielles, entre normes, valeurs et faits, ou entre l’activité de description, la prescription et l’évaluation, et concernant des notions comme la causalité dans le champ épistémique, la justice et l’intérêt dans le champ éthique. S’ajoutent des leçons instructives pour penser le rapport entre positif et normatif en défendant la primauté de l’un (le positif, le plus souvent) ou de l’autre (le normatif, plus rarement), ou en les séparant. Force est de constater que les écoles de pensée les plus divergentes peuvent se rejoindre, voire s’accorder sur des positions inattendues. Favoriser le positif, voilà qui réunit des économistes d’écoles de pensée aussi influentes et diverses que les écoles marxiste, autrichienne ou de Chicago : celles-ci, et d’autres, trouvent leur place dans ce volume, ainsi que des approches méthodologiques variées (pragmatisme, bayésianisme, théorie des négociations). S’il semble qu’un consensus valorisant les approches positives en économie y obère la recherche, à quoi est-il dû ? L’histoire de la pensée économique permet-elle de dégager quelques positions venant nuancer cette position ? Des perspectives philosophiques peuvent être adaptées à cet effet et l’importance des pratiques est également à relever, peut-être pour mieux valoriser les approches normatives en économie.Telles sont quelques-unes des approches traitées dans les onze contributions réunies dans cet ouvrage à partir d’un colloque tenu en décembre 2020.
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Abstract We estimate the yield curve gap in Japan and examine whether it has contributed to the sustained low growth and low inflation rates observed since the beginning 2000s. We use a semi-structural empirical model that generalizes Laubach and Williams’ approach, considering the entire range of maturities of the interest rates and dealing with the issue of mixed frequency sampling. An important result is that, even in the absence of a zero lower bound, monetary and fiscal policies proved ineffective in bringing the Japanese economy out of a situation of prolonged stagnation and low inflation. This happened even when the yield curve moved below its natural level.
Keywords Japan, State-space model, Potential growth, Yield curve
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Abstract Contexte : Les injustices épistémiques sont de plus en plus décriées dans le domaine de la santé mondiale. Cette étude vise à déterminer si la source des connaissances influence la perception de ces connaissances et la volonté de les utiliser. Méthodes : L’étude suit un devis expérimental randomisé dans lequel les participant·es ont été assigné·es au hasard à l'une des sept notes de politique conçues avec le même contenu scientifique, mais avec différentes organisations présentées comme autrices. Chaque organisation était représentative d'une autorité financière, scientifique ou morale. Pour chaque type d'autorité, deux organisations étaient proposées : l'une nord-américaine ou européenne, l'autre africaine. Résultats : Les résultats montrent que le type d’autorité et la localisation des organisations autrices ne sont pas significativement associés à la qualité perçue et à l’utilisation instrumentale déclarée. Toutefois, des interactions entre le type d’autorité et la localisation étaient significatives. Ainsi, les analyses stratifiées ont mis en évidence que pour la qualité perçue, les notes de politique signées par l'organisme bailleur (autorité financière) africain obtenaient de meilleurs scores que les notes de politique signées par l’organisme bailleur nord-américain/européen. Tant pour la qualité perçue que pour l'utilisation instrumentale déclarée, ces analyses stratifiées ont révélé que les notes de politique signées par l'université africaine (autorité scientifique) étaient associées à des scores plus faibles que les notes de politique signées par l'université nord-américaine/européenne. Interprétation : Les résultats confirment l'influence significative des sources sur la perception des connaissances en santé mondiale et rappellent l’intersectionnalité de l’influence des sources d’autorité. Cette analyse nous permet à la fois d'en apprendre davantage sur les organisations qui dominent la scène de la gouvernance mondiale en santé et de réfléchir aux implications pour les pratiques d'application des connaissances.
Keywords Santé mondiale, Déterminants structurels, Notes de politique, COVID-19, Pouvoir
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Abstract The pre-Global Financial Crisis build-up, followed by the post-crisis collapse, in bank liquidity creation in developed countries is well-documented (Berger and Bowman, Berger and Bouwman, Review of Financial Studies 22:3779–3837, 2009). Comparable analyses on developing and emerging countries (DECs) have been severely hindered by the lack of detailed bank-by-bank balance sheet data. This paper proposes a new, high-frequency, Aggregate Bank Liquidity Creation (A-BLC) measure for 114 DECs on a comparable cross-country basis, which relies on macroeconomic, country-wide, banking systems’ balance sheet data. The A-BLC database allows us to assess the extent of bank fragility arising from illiquidity associated with intermediation at the banking system level for every DEC, at a monthly frequency over the period 2001–2016. Our measure captures more accurately than other measures proposed in the literature the evolution of bank liquidity creation in the DECs. Stylised facts and panel-regression analysis suggest a sharp pre-crisis build-up and post-crisis fall in liquidity creation in DECs, larger then that observed for developed countries. In addition, financial depth and stability appear as particularly important drivers of A-BLC in DECs.
Keywords Developing and emerging countries, Bank liquidity creation, Financial fragility
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Abstract Le changement climatique, la perte de la biodiversité et l’altération globale de l’environnement détériorent la santé des populations. Plus particulièrement, l’augmentation des périodes marquées par des températures élevées et leur persistance pourraient constituer un risque majeur pour une large part de la population et limiter drastiquement l’activité humaine. Pourtant, les vagues de chaleur sont sous-représentées dans les analyses des événements météorologiques extrêmes, en particulier dans les évaluations économiques. Ce manque d’études, associé à la faible perception par la population du risque lié à la chaleur, limite la mise en place de mesures d’adaptation, alors que les effets des canicules sont en grande partie évitables. Cet article présente l’évolution de l’impact économique global des effets sanitaires des vagues de chaleur observées en France entre 1974 et 2020.
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Abstract In this paper, we reexamine the predictive power of the yield spread across countries and over time. Using a dynamic panel/dichotomous model framework and a unique dataset covering 13 OECD countries over the period 1975–2019, we empirically show that the yield spread signals recessions. This result is robust to different econometric specifications, controlling for recession risk factors and time sampling. Using a new cluster analysis methodology, we present empirical evidence of a partial homogeneity of the predictive power of the yield spread. Our results provide a valuable framework for monitoring economic cycles.
Keywords Yield spread Recession Panel binary model Cluster analysis
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Abstract Senegal introduced the infant hepatitis B virus (HBV) vaccination in 2004 and recently committed to eliminating hepatitis B by 2030. Updated epidemiological data are needed to provide information on the progress being made and to develop new interventions. We estimated the prevalence of hepatitis B surface antigen (HBsAg) in children and adults living in rural Senegal and assessed hepatitis B treatment eligibility. A cross-sectional population-based serosurvey of HBsAg was conducted in 2018-2019 in a large sample (n = 3,118) of residents living in the Niakhar area (Fatick region, Senegal). Individuals positive for HBsAg subsequently underwent clinical and biological assessments. Data were weighted for age and sex and calibrated to be representative of the area's population. Among the 3,118 participants, 206 were HBsAg positive (prevalence, 6.9%; 95% confidence interval [CI], 5.6-8.1). Prevalence varied markedly according to age group in individuals aged 0-4, 5-14, 15-34, and >= 35 years as follows: 0.0% (95% CI, 0.00-0.01); 1.5% (95% CI, 0.0-2.3); 12.4% (95% CI, 9.1-15.6); and 8.8% (95% CI, 6.1-11.5), respectively. Of those subsequently assessed, 50.9% (95% CI, 41.8-60.0) had active HBV infection; 4 (2.9%; 95% CI, 0.9-9.4) were eligible for hepatitis B treatment. Conclusion: In this first population-based serosurvey targeting children and adults in rural Senegal, HBsAg prevalence was very low in the former, meeting the World Health Organization's (WHO) < 1% HBsAg 2020 target; however, it was high in young adults (15-34 years old) born before the HBV vaccine was introduced in 2004. To reach national and WHO hepatitis elimination goals, general population testing (particularly for adolescents and young adults), care, and treatment scale-up need to be implemented.
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Abstract Despite its universal nature, the impact of COVID-19 has not been geographically homogeneous. While certain countries and regions have been severely affected, registering record infection rates and excess deaths, others experienced only milder outbreaks. We investigate to what extent human factors, in particular cultural origins reflected in different attitudes and behavioural norms, can explain different degrees of exposure to the virus. Motivated by the linguistic relativity hypothesis, we take language as a proxy for cultural origins and exploit the exogenous variation in the language spoken around the border that divides the French- and German-speaking parts of Switzerland to estimate the impact of culture on exposure to COVID-19. The results obtained using a spatial regression discontinuity design reveal, that within 50- and 25- kilometres bandwidth from the language border, the average COVID-19 exposure levels for individuals in French speaking municipalities was higher. In particular, we find that German speaking municipalities were associated with a reduction of around 40% - 50% in the odds of COVID-19 exposure compared to the French speaking municipalities.
Keywords COVID-19 Culture Language Spatial regression discontinuity
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Abstract Le rapport entre positif et normatif est une question méthodologique et théorique centrale en économie. À ce titre, les débats de la littérature spécialisée réclament une synthèse précise, à défaut de la cartographie exhaustive qui paraît une
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Abstract We test the effectiveness of a social comparison nudge to enhance lockdown compliance during the Covid-19 pandemic, using a representative sampleof metropolitan French adultpopulation(N=1154). Respondents were randomly assigned to a favourable/unfavourable informational feedback (daily road traffic mobility patterns, in Normandy -a region of France) on peer lockdown compliance.Our dependent variable was the intention to comply with a possible future lockdown. We controlled for risk, time, and social preferences and tested the effectiveness of the nudge. We found no evidence of theeffectiveness of thesocial comparison nudge among the wholepopulation, butthe nudgewas effective when its recipient and the reference population shared the same geographical location(Normandy). Exploratory results on this subsample (N=52) suggest that this effectiveness could be driven by non-cooperative individuals.
Keywords Risk preferences, Social preferences, Social Comparison Nudge, Time preferences, Lockdown compliance, COVID-19
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Abstract We consider a general equilibrium model with vertical preferences, where workers and consumers are differentiated respectively by their sensitivity to effort and their intensity of preference for quality. We consider a public monopoly, i.e. which is owned equally by all individuals. The question is under which conditions the firm will be privatized and at which rate/price. The decisions are taken through majority vote in a plurality system. When the firm is controlled by the State, the price is determined through a vote among all the population. Otherwise, the price is the one which maximizes the profit. We prove that, when the maximum disutility of working in the firm is higher than the maximum utility of consuming its output, privatization may emerge as a possible choice of the majority, even if no hypothesis is made on the efficiency of a private management relative to a public one.
Keywords Democracy, General equilibrium, Privatization, Vertical preferences, Majority vote, Public monopoly
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Abstract Who registers to vote? Although extensive research has examined the question of who votes, our understanding of the determinants of political participation will be limited until we know who is missing from the voter register. Studying voter registration in lower-income settings is particularly challenging due to data constraints. We link the official voter register with a complete social network census of 16 villages to analyze the correlates of voter registration in rural Uganda, examining the role of individual-level attributes and social ties. We find evidence that social ties are important for explaining registration status within and across households. Village leaders-and through them, household heads-play an important role in explaining the registration status of others in the village, suggesting a diffuse process of social influence. Socioeconomic factors such as income and education do not explain registration in this setting. Together these findings suggest an alternate theory of participation is required.
Keywords Electoral systems, Representation, Voting behavior, Public opinion, Elections, African politics
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