The Baltic Economic Association
Promoting Economics in the Baltic States since 2018
Working Papers of Eesti Pank 3/2024
Alfred V. Guender
Working Papers of Eesti Pank 4/2024
Liina Rebane, Merike Kukk and Tairi Rõõm
On 23 May at 10.30 am you are kindly invited to attend in Webex the Eesti Pankʼs research seminar in which András Borsos (Magyar Nemzeti Bank) will make the presentation on “Firm-level production networks: what do we (really) know?”.
Are standard production network properties similar across all available datasets, and if not, why? We provide benchmark results from two administrative datasets (Ecuador and Hungary), which are exceptional in that there is no reporting threshold. We compare these networks to a leading commercial dataset (FactSet) and published results on national firm-level production networks. Administrative datasets with no reporting thresholds have remarkably similar quantitative properties, while a number of important properties are biased in datasets with missing data.
Co-authors of the paper: Andrea Bacilieri, András Borsos, Pablo Astudillo-Estevez and François Lafond
Full-text of the paper
Meeting information in Webex:
https://eestipank.webex.com/eestipank/j.php?MTID=m96d2570935d3e0896b05eeead66fd202
Meeting number: 2744 731 6268
Password: Jnv5P3gPti5 (56857347, from phones and video systems)
You are welcome to join the Research Seminar of the Department of Economics and Finance of Tallinn University of Technology (TalTech) on Wednesday, 22 May at 16:00-17:00.
In MS Teams, please join via LINK
“Explaining consumer inertia: Drivers of attention and choice in car insurance market”
Kaido Kepp and Kadri Männasoo (Department of Economics and Finance, TalTech)
We study the vehicle lessees’ Motor Own Damage insurance search frictions and choices. We use a consumer-level annual panel of policy and insurance offers’ data from 2010-2018 from the biggest insurance broker consolidating the Estonian car insurance market offers. We apply the two-stage discrete choice model by Hortaçsu et al 2017 that identifies the sources of consumer inertia by separating the attention and choice decisions given the observed switches to new providers. Our results show strong inertia that stems from consumer inattention and considerable heterogeneity of inattention across consumer groups. Consumers choose from a set of offers and their decisions to switch or stay with the current provider reveal substantial price elasticity and a modest effect of insurance provider’s brand preference.
Keywords: car insurance, consumer behavior, choice frictions, consumer inertia, inattention
JEL classification: D12, D83, G22, G52, L84, M31
Authors: Kaido Kepp (Department of Economics and Finance, TalTech), Kadri Männasoo (Department of Economics and Finance, TalTech)
Funding: This work was supported by the European Economic Area (EEA) Financial Mechanism 2014–2021 Baltic Research Program under project S-BMT-21-8 (LT08-2-LMT-K-01-073), COST Action HiTEc, CA21163 (European Cooperation in Science and Technology) and the European Commission Research and Innovation program grant (agreement 952547).
On 16 May at 10.30 am you are kindly invited to attend in Webex the Eesti Pankʼs research seminar in which Julia Le Blanc (Joint Research Centre at the European Commission) will make the presentation on “Housing Wealth Across Countries: The Role of Expectations, Institutions and Preferences”.
Homeownership rates and holdings of housing wealth differ immensely across countries. We specify and estimate a life cycle model with risky labor income and house prices in which households face a discrete–continuous choice between renting and owning a house, whose sale is subject to transaction costs. The model allows us to quantify three groups of explanatory factors for long-run, structural differences in the extensive and intensive margins of housing: the homeownership rate and the value of housing wealth of homeowners. First, in line with survey evidence, we allow for differences in expectations of house prices. Second, countries differ in the institutional set-up of the housing market: maximum loan–value ratio and costs of renting, maintaining and selling a house. Third, we allow for differences in household preferences: the dispersion in discount factors, the share of housing expenditure and the bequest motive. We estimate the model using micro data from five large economies and provide a decomposition to interpret what drives the cross-country differences in housing wealth. We find that all three groups of factors matter, although preferences less so. Differences in homeownership rates are strongly affected by (i) house price beliefs and (ii) the rental wedge, the difference between rents and maintenance costs, which reflects the quality of the rental market. Differences in the value of housing wealth are substantially driven by housing maintenance costs.
Meeting information in Webex:
https://eestipank.webex.com/eestipank/j.php?MTID=mcd3e9cf28363b1bd660c184bb6ef9c76
Meeting number: 2743 927 9631
Password: REgwGFpn973 (73494376, from phones and video systems
The 6th Baltic Economic Conference takes place in June 2024 in Tallinn.
The deadline for registration has been extended until 17th of May. Please register by 17th of May in conference website.