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Social Sciences DataLab
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The effect of firm cash holdings on monetary policy
Publication . Adão, Bernardino; Silva, André C.; NOVA School of Business and Economics (NOVA SBE); Elsevier Science B.V., Amsterdam.
Firm cash holdings increased substantially from 1980 to 2017. We study the implications of the increase in firm cash holdings on monetary policy. We introduce a model that takes the distribution of firm cash holdings as an input. We find that the interest rate channel of the transmission of monetary policy becomes more powerful, as the impact of monetary policy over real interest rates increases. The time for the real interest rate to return to its initial value increases three times. Given the current large firm cash holdings, our results imply that monetary policy changes should be made gradually.
Demand elasticities in promotional pricing: A theory-based analysis of empirical challenges
Publication . Gardete, Pedro; Silva, Tânia
This paper develops a continuous-time model of selling in which a firm optimally offers price promotions in a market with static but heterogeneous consumer preferences.
While consumer preferences are fixed, price promotions induce dynamic sorting behavior, causing price sensitivity to evolve over time. This dynamic response can create challenges for empirical analyses. We use the promotion-cycles model to examine these challenges for both experimental and observational settings. For experimental approaches, we show that failing to align interventions with the market’s equilibrium timing of promotions can lead to elasticity estimates that diverge from those naturally observed in the market. For observational methods, we demonstrate that – in the absence of price endogeneity – using lagged prices as instruments may introduce a spurious instrumentation bias that may be mistakenly attributed to endogeneity. We provide empirical guidance and show that, in most cases, such biases can be anticipated by directly examining how sales evolve during promotional cycles.
Crowdfunding vs. Taxes: Does the payment vehicle influence WTP for Ecosystem Services protection?
Publication . Cunha-e-Sá, Maria A.; Dietrich, Til; Faria, Ana; Nunes, Luis Catela; Ortigão, Margarida; Rosa, Renato; Vieira Da Silva, Carina
The effect of the payment vehicle (PV) on economic valuation estimates has been addressed since the early
literature on stated preferences studies. Particularly, some studies have focused on willingness to pay (WTP)
sensitivity to mandatory/collective vs. voluntary/individual PVs, by comparing tax increases or redistribution
based on specific taxes with donation-like contributions. These two payment schemes may induce different types
of strategic behavior and eventually free riding by the economic agents involved. We conducted a choice
experiment through a face-to-face survey held in 2020 for a representative sample of the Portuguese population.
We investigate the national population’s WTP to invest in oil spills’ prevention along the coastline of mainland
Portugal to ensure the provision of four marine and coastal ecosystem services (MCES): (1) biodiversity
conservation, (2) beach use, (3) coastal protection and (4) surf. We used a split-sample design to test for
differences between the two PVs considered, a mandatory income tax and a voluntary contribution collected
through a crowdfunding campaign. We estimate a mixed logit model (MXL) in WTP-space. Furthermore, we
control for several sociodemographic characteristics to capture the influence of respondents’ heterogeneity on the
elicited WTP, and to check the robustness of our results. We find that mean WTP estimates are positive and
significant for all ES except for surf. Biodiversity conservation has the highest WTP estimate. The results obtained
suggest that the lack of trust in institutions, fairness concerns and disbelief in policy consequentiality seem to be
intrinsic to the Portuguese population, influencing WTP regardless of the PV. However, when comparing an extra
income tax with a crowdfunding campaign, respondents have a lower preference for the status quo in this latter
case. Therefore, our results highlight the importance of better understanding the role that the payment vehicle may
play in funding ecosystem services’ conservation. This is important since how populations respond to incentives
for sustainability purposes is crucial to ensure that the targets are met in a more efficient (or cost-effective) and
equitable way.
Wage cyclicality and labour market institutions
Publication . Pereira, João Manuel Rodrigues; Ramos, Raul; Martins, Pedro S.
Do labour institutions influence how wages respond to the business cycle? Such responsiveness can then shape several economic outcomes, including unemployment. In this paper, we examine the role of two key labour market institutions – collective bargaining and temporary contracts – upon wage cyclicality. Our evidence is drawn from rich, 2002-2020 matched data from Portugal. We find that workers not covered by collective agreements exhibit much higher wage cyclicality, especially new hires, compared to covered workers. In contrast, workers under temporary contracts do not exhibit sizable differences in cyclicality compared to counterparts under permanent (open-ended) contracts. Our findings highlight a novel angle through which labour institutions influence the labour market and the economy
The heterogeneous effects of teacher turnover on student achievement: Evidence from a centralized teacher allocation system
Publication . Gomes, Sofia; Nunes, Luis Catela; Freitas, Pedro
This paper contributes to the literature on the effect of teacher turnover on student achievement.
We study an educational system characterized by a centralized teacher allocation model
and estimate the causal effects of teacher turnover on students’ exam scores. A small but
statistically significant negative effect is found, which is mainly attributed to organizational
disruption at the school level and seems to persist for up to two years. We find heterogeneous
effects, with students from lower socioeconomic backgrounds and with lower previous
achievement being more negatively affected. We conclude that students in lower-achieving
and socially disadvantaged schools are more exposed to teacher turnover, and this turnover
penalizes these students more. We also find that it is the turnover among short-term contract
teachers that drives the negative effects.
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Descrição
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Financiadores
Entidade financiadora
Fundação para a Ciência e a Tecnologia
Programa de financiamento
9444 - RNIIIE
Número da atribuição
PINFRA/22209/2016