Working papers of the Institute
for Empirical Research in Economics
(excerpt for
MfDD / HzPD)
1. Beyond
Bentham - Measuring Procedural Utility
18. A
Proposal for a Flexible Europe
27. A
Utopia? Government without Territorial Monopoly
37. Does
Economics have an Effect? Towards an Economics of Economics
45. Managerial
Power and Compensation
48. Outcome,
Process & Power in Direct Democracy
49. Was
bewirkt die Volkswirtschaftslehre?
50. Demokratieindizes
für die Kantone der Schweiz
51. Maximising
Happiness?
58. Happiness,
Economy and Institutions
BEYOND BENTHAM - MEASURING PROCEDURAL UTILITY
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Author(s) :
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Bruno S. Frey and Alois Stutzer
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Abstract :
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We propose that outcome utility and process utility
can be distinguished and empirically measured. People gain procedural
utility from participating in the political decision-making
process itself, irrespective of the outcome.
Nationals enjoy both outcome and process utility, while
foreigners are excluded from political decision-making and therefore
cannot enjoy the corresponding procedural utility. Utility is measured
by individuals' reported subjective well-being or happiness.
We find that participation rights provide more procedural utility in
terms of a feeling of self-determination and influence than actual
participation.
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Published :
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April 2001
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in :
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Working Paper - Institute for Empirical Research in Economics
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A Proposal for a Flexible Europe
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Author(s) :
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Bruno S. Frey and Reiner Eichenberger
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Abstract :
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At present, new EU-members have to fully accept the "acquis
communautaire" even if their economic and institutional
development differs drastically from the EU-average. In contrast,
we propose that there should be the possibility of partial entry into
the EU. East European Countries should have the option of specifically
entering with respect to functions where they expect positive net
benefits. In order to enable such partial entry, a new type of
jurisdictions called FOCJ (Functional, Overlapping and
Competing Jurisdictions) is proposed between the EU, the CEECs, and
beyond. Such FOCJ allow for partial integration based on economic
efficiency and democratic rules.
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Published :
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August 2000
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in :
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Working Paper - Institute for Empirical Research in Economics
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A Utopia? Government without Territorial Monopoly
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Author(s) :
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Bruno S. Frey
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Abstract :
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We normally take it for granted: a government or state has its
corresponding territory. This paper shows that government need not
have a territorial monopoly. The paper advances a practical,
constitutional proposal, based on the notion that there are meaningful
government units, whose major characteristic is not the territorial
extension but its function. The constitution proposal allows for
the emergence of governmental organizations, which will be called FOCJ
according to the acronym for "Functional, Overlapping,
Competing Jurisdictions". Their territory is variable,
and they do not have a territorial monopoly over it. Rather,
they are in competition with other such FOCJ, and they are,
moreover, exposed to political competition.
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Published :
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Juni 2000
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in :
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Working Paper - Institute for Empirical Research in Economics
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Does Economics have an Effect? Towards an Economics
of Economics
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Author(s) :
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Bruno S. Frey
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Abstract :
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Due to its formality and highly analytic thinking, economics is
often attributed a leading role among the social sciences and a
prominent position as contributor to economic or social issues in the
real world. Fact is, however, that the empirical proof for such
a claim is either missing or anecdotal.
This paper aims to outline the "economics of economics". It
surveys and compares approaches of impact measurement such as a
production function of economics or the demand and supply of trained
economists and discusses the determinants of the strength of the
influence of economics. It furthermore discriminates between the impact
of economic ideas versus that of economists as scientists or
politicians.
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Published :
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Februar 2000
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in :
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Working Paper - Institute for Empirical Research in Economics
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Managerial Power and Compensation
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Author(s) :
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Bruno S. Frey and Marcel Kucher
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Abstract :
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According to the widely used Managerial Power Model, a higher
hierarchical position with associated higher power leads to higher
compensation. In contrast, the Compensating Wage Differentials Model
argues that there is a non-positive relationship between positional
power and total compensation. Both power and income yield
utility and in equilibrium managers are prepared to trade-off the two
elements. The two opposing propositions are tested using a large survey
data set from Switzerland. The results suggest that power positions
do not yield higher compensation. Rather, there is a non-positive
relationship between power position and compensation, if one takes into
account all relevant factors influencing total compensation.
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Published :
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Dezember 1999
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in :
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Working Paper - Institute for Empirical Research in Economics
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Outcome, Process & Power in Direct Democracy
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Author(s) :
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Bruno S. Frey, Marcel Kucher and Alois Stutzer
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Abstract :
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Based on survey data for Switzerland, new empirical findings on direct
democracy are presented.
In the first part, we show that, on average, public employees receive
lower financial compensation under more direct democratic institutions.
However, top bureaucrats are more constrained in direct democracies and
have to be compensated by higher wages for that loss of power.
In the second part, we demonstrate that reported subjective well-being
of the population is much higher in jurisdictions with stronger
direct democratic rights. This is not only the case because people
value political outcomes higher but they derive utility from the
political process itself.
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Published :
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November 1999
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in :
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forthcoming in: Public Choice
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Was bewirkt die Volkswirtschaftslehre?
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Author(s) :
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Bruno S. Frey
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Abstract :
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Due to its formality and highly analytic thinking, economics is
often attributed a leading role among the social sciences and a
prominent position as contributor to economic or social issues in the
real world. Fact is, however, that the empirical proof for such a claim
is either missing or anecdotal. This paper aims to outline the
"economics of economics". It surveys and compares approaches
of impact measurement such as a production function of economics or the
demand and supply of trained economists. It furthermore discriminates between
the impact of economic ideas versus that of economists as scientists or
politicians.
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Published :
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Oktober 1999
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in :
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published in: Perspektiven der Wirtschaftspolitik 1 (1), 5-33
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Demokratieindizes für die Kantone der Schweiz
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Author(s) :
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Alois Stutzer
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Abstract :
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Die direkte Demokratie ist in den Kantonen der Schweiz
unterschiedlich stark ausgeprägt. Die Beteiligung der Bürger im
politischen Prozess via Verfassungs- und Gesetzesinitiative, Gesetzesreferendum
und Finanzreferendum ist durch verschieden hohe Hürden
eingeschränkt. Unterschiede bestehen beispielsweise bei der Anzahl
Unterschriften, die verlangt werden, um ein Instrument zu ergreifen,
der Zeit, welche für die Sammlung der Unterschriften zur Verfügung
steht, oder der Ausgabenhöhe, ab welcher ein Finanzreferendum möglich
ist. Diese Unterschiede werden verwendet, um Indizes für die
direktdemokratischen Beteiligungsmöglichkeiten der Bürger zu
berechnen. Die Indizes öffnen ein weites Feld für die institutionell
vergleichende Forschung in der Schweiz.
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Published :
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Oktober 1999
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in :
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Working Paper - Institute for Empirical Research in Economics
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Maximising Happiness?
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Author(s) :
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Bruno S. Frey and Alois Stutzer
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Abstract :
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The measurement of individual happiness challenges the notion that
revealed preferences only reliably reflect individual utility. Reported
subjective well-being is a broader concept than traditional decision
utility; it also includes concepts like experience and procedural
utility. Micro- and macroeconometric happiness functions offer new
insights on determinants of life satisfaction. However, one should not
leap to the conclusion that happiness should be maximized in the sense
of social welfare function maximization. In contrast, happiness
research strengthens the validity of an institutional approach such as
reflected in the theory of democratic economic policy.
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Published :
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Oktober 1999
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in :
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German Economic Review, Vol. 1, No. 2, May 2000, 145-167
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Happiness, Economy and Institutions
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Author(s) :
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Bruno S. Frey and Alois Stutzer
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Abstract :
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A cross-regional econometric analysis is conducted suggesting that
institutional factors in the form of direct democracy (via
initiatives and referenda) and of federal structure (local
autonomy) systematically and sizeably raise self-reported individual
well-being. This positive effect can be attributed to political
outcomes closer to voters preferences as well as to the procedural
utility of political participation. Moreover, the results of
"standard" microeconometric well-being functions previously
published are supported. Unemployment among economic variables and bad
health among demographic variables have a strongly depressing effect on
happiness. Income only significantly raises happiness for higher income
groups.
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Published :
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Juli 1999
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in :
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The Economic Journal, 110 (466, October), 2000, pp. 918-938
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