Economics of Risky Behavior and Sensation Seeking: Themenheft 6/Bd. 232 (2012) Jahrbücher für Nationalökonomie und Statistik 9783110508628, 9783828205765

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Jahrbücher für Nationalökonomie und Statistik Journal of Economics and Statistics

Begründet von

Bruno Hildebrand

Fortgeführt von

Johannes Conrad, Ludwig Elster Otto v. Zwiedineck-Südenhorst Gerhard Albrecht, Friedrich Lütge Erich Preiser, Knut Borchardt Alfred E. Ott und Adolf Wagner

Herausgegeben von

Peter Winker Wolfgang Franz Werner Smolny Peter Stahlecker Joachim Wagner

Band 2 3 2

^ ^

Lucius St Lucius Stuttgart 2012

© Lucius & Lucius Verlagsgesellschaft m b H · Stuttgart · 2012 Alle Rechte vorbehalten Satz: Mitterweger 8c Partner Kommunikationsgesellschaft mbH, Plankstadt Druck und Bindung: Neumann Druck, Heidelberg Printed in Germany

Jahrbücher f. Nationalökonomie u. Statistik (Lucius & Lucius, Stuttgart 2012) Bd. (Vol.) 232/6

Inhalt des 232. Bandes Abhandlungen/Original Papers Aldashev, Alisher, Johannes Gernandt, Stephan L. Thomsen, The Immigrant-Native Wage Gap in Germany Ali, Mir M., Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior Auer, Benjamin R,, Lassen sich CAPM, HCAPM und CCAPM durch konsumbasierte zeitvariable Parameterspezifikation rehabilitieren? Can Time-varying Parameter Specification Based on Consumption Variables Rehabilitate CAPM, HCAPM and CCAPM? Bäker, Agnes, Mario Mechtel, Karin Vetter, Beating thy Neighbor: Derby Effects in German Professional Soccer Bauer, Thomas K., Christoph Μ. Schmidt, WTP vs. WTA: Christmas Presents and the Endowment Effect Baumann, Robert, Bryan Engelhardt, Victor A. Matheson, Employment Effects of the 2002 Winter Olympics in Salt Lake City, Utah Bellmann Lutz, Hans-Dieter Gerner, Further Training and Company-Level Pacts for Employment in Germany Berger, Florian, Measuring the Knowledge Economy - Intangible Spending and Investment in Germany Bönisch, Peter, Sven Tagge, The Optimal Size of German Child Care Centers and the Impact of Regulation: Estimating the Cost Function of a Regulated Multi-Product Firm Chat, Andreas, Consumer Specialization and the Demand for Novelty: a Reconsideration of the Links and Implications for Studying Fashion Cycles in Tourism Dietl, Helmut, Tobias Duschl, Egon Franck, Markus Lang, A Contest Model of a Professional Sports League with Two-Sided Markets Egbert, Henrik, Andreas Hildenbrand, Der Coupon-Handelsansatz als Modell für eine subjektbezogene Finanzierung der Kinderbetreuung The Coupon Trading Approach as a Model for a Subject-based Financing System of Early Childhood Education and Care Services Franck, Egon, Philipp Theiler, One for Sure or Maybe Three. Empirical Evidence for Overtime Play from a Comparison of Swiss Ice Hockey and the NHL. . . . Frenkel, Michael, Isabell Koske, Are the Real Exchange Rates of the New EU Member Countries in Line with Fundamentals? - Implications of the NATREX Approach Frick, Bernd, Björn Wallbrecht, Infant Mortality of Professional Sports Clubs: An Organizational Ecology Perspective Haan, Marco Α., Ruud H. Koning, Arjen van Witteloostuijn, The Effects of Institutional Change in European Soccer Hanel, Barbara, Regina Τ. Riphahn, The Employment of Mothers - Recent Developments and their Determinants in East and West Germany Hofmann, Barbara, Short- and Long-term Ex-Post Effects of Unemployment Insurance Sanctions Kamst, Richard, Gerard H. Kuper, Gerard Sierksma, Bertus G. Talsma, Inner-Outer Lane Advantage in Olympic 1000 Meter Speed Skating

490-517 633-651

518-544 224-246 4-11 308-317 98-115 12-30 545-566 678-701 336-359

116-128 210-223 129-145 360-389 318-335 146-176 31-60 293-307

IV · Inhalt des 232. Bandes Kumpmann, Ingmar, Michael Gübne, Herbert S. Buscher, Armut im Alter Ursachenanalyse und eine Projektion für das Jahr 2023 Old Age Poverty - Causes and a Projection for 2023 Leeds, Eva Marikova, Michael A. Leeds, Gold, Silver, and Bronze: Determining National Success in Men's and Women's Summer Olympic Events Mandel, Philipp, Bernd Süssmuth, Determinants of Digital Piracy: A Re-examination of Results Nüesch, Stephan, Hartmut Haas, Empirical Evidence on the "Never Change a Winning Team" Heuristic Rülke, Jan-Christoph, Do Private Sector Forecasters Desire to Deviate From the German Council of Economic Experts? Siliverstovs, Boriss, Konstantin A. Kholodilin, Assessing the Real-Time Informational Content of Macroeconomic Data Releases for Now-/Forecasting GDP: Evidence for Switzerland Smolny, Werner, Cyclical Adjustment, Capital-labor Substitution and Total Factor Productivity Convergence - East Germany After Unification Struck, Georg, Eine verteilungspolitische Beurteilung aktueller Reformkonzepte zur deutschen Einkommensbesteuerung A Distributional Analysis of Recent Reform Proposals on the German Income Tax Rate Süssmuth, Bernd, Stefan Wagner, A Market's Reward Scheme, Media Attention, and the Transitory Success of Managerial Change Tequame, Miron, HIV, Risky Behavior and Ethno-linguistic Heterogeneity Vujic, Suncica, Siem Jan Koopman, Jacques J. F. Commandern, Economic Trends and Cycles in Crime: A Study for England and Wales Zerth, Jürgen, Stefanie Daum, Budgetbereinigung zwischen Kollektiv- und Selektivvertrag: ökonomische Aspekte aus wettbewerblicher Sicht Selective Contracting and Collectively Financed Fund: The Way of Appropriate Adjustment

61-83 279-292 394-413 247-257 414-428 429-444 445-459

567-588 258-278 606-632 652-677

460-481

Diskussionsbeiträge / Discussion Papers Heinemann, Friedrich, FIRE for the Euro: A Superior Way to Bond Market Stabilization

702-709

Seitz, Franz, Dietrich Stoyan, Karl-Heinz Tödter, Coin Migration and Seigniorage within the Euro Area Spahn, Peter, David Hume und die Target-Salden

84-92 482-487

Literaturbeiträge/Review Papers Helmstädter, Ernst, Leistungserstellung, Kreislaufgleichgewicht und das Geld. Eine Diskussion mit Wolfgang Stützel (1925-1987)

177-193

Inhalt des 232. Bandes · V

Buchbesprechungen / Book Reviews Benedictis, Luca de, Luca Salvatici (eds.), The Trade Impact of European Union Preferential Policies. An Analysis Through Gravity Models Creedy, John, Solmaz Moslebi, Modeling the Composition of Government Expenditur Gilli, Manfred, Dietmar Maringer, Enrico Schumann, Numerical Methods and Optimization in Finance Hagemann, Harald (Hrsg.), Wissen/The Knowledge Economy. Studien zur Entwicklung der ökonomischen Theorie XXVI Helmedag, Fritz, Jürgen Kromphardt (Hrsg.), Nachhaltige Wege aus der Finanzund Wirtschaftskrise Herr, Hansjörg, Milka Kazandziska, Macroeconomic Policy Regimes in Western Industrial Countries Keuschnigg, Christian, Mirela Keuschnigg, Martin Kolmar, Eine Unternehmenssteuerreform für Deutschland. Ubergangsszenarien und langfristige Wachstumseffekte May, Uwe, Cosima Bauer, Regulierungsinstrumente in der GKV-Arzneimittelversorgung - Eine ordnungspolitische Analyse Oberender, Peter (Hrsg.), Reform der Finanzmarktregulierung Oppenländer, Karl Heinrich, Erinnerungen eines Wirtschaftsforschers. Privates und Berufliches Papadimitriou, Dimitri B., L. Randall Wray (eds.), The Elgar Companion to Hyman Minsky Porter, Michael E., Clemens Guth, Redefining German Health Care - Moving to a Value-Based System Review of „The EEAG Report on the European Economy" Sattarhoff, Cristina, Statistical Inference in Multifractal Random Walk Models for Financial Time Series Sauer, Beate, Von der Liquiditätssicherung zum Ertragsstreben Theurl, Theresia (Hrsg.), Institutionelle Hintergründe von Krisen Voy, Klaus (Hrsg.), Zur Geschichte der Volkswirtschaftlichen Gesamtrechnungen nach 1945 Willgerodt, Hans, Werten und Wissen - Beiträge zur Politischen Ökonomie . . . .

710 590 390 592 194 196

594 93 596 715 716 717 589 721 723 597 197 725

VI · Gutachter zum 232. Jahrgang (2012)

Die Gutachter zum 232. Jahrgang der Jahrbücher für Nationalökonomie und Statistik (01.11.2012 bis 31.10.2012) Im Namen der Herausgeber danke ich allen Wissenschaftlerinnen und Wissenschaftlern, die in diesem Zeitraum bereit waren, für die Jahrbücher für Nationalökonomie und Statistik Manuskripte zu begutachten. Mit ihrer Hilfe sind wir dem Ziel, eine möglichst schnelle Entscheidung über die Publikation der Einreichungen herbeizuführen, ziemlich nahe gekommen. Die Autoren konnten die detaillierten Verbesserungsvorschläge aufnehmen, und davon hat die Qualität der Manuskripte stark profitiert. Peter Achtnicht, Martin, Z E W Mannheim Alberini, Anna, University of Maryland Albert, Max, Universität Gießen Ali, Mir M., Food & Drug Administration, College Park, USA Baismeier, Benjamin, KU Leuven Barros, Carlos, Universidade Tecnica de Lisboa Beck, Nikolaus, University of Lugano Bell, Clive, Universität Heidelberg Berlemann, Michael, Helmut-SchmidtUniversität Hamburg Berri, David, Southern Utah University Bianchi, Marina, Universitä di Cassino Bitsch, Vera, TU München Blien, Uwe, Universität Bamberg Bode, Eckhardt, Institut für Weltwirtschaft, Kiel Bönke, Timm, Freie Universität Berlin Braakmann, Nils, Newcastle University Bredl, Sebastian, Universität Gießen Broll, Udo, TU Dresden Brülhart, Marius, University of Lausanne Buchholz, Wolfgang, Universität Regensburg Buchwald, Achim, Monpolkommission, Bonn Buslei, Hermann, DIW Berlin Busse, Meghan, UC Berkely Büttner, Thiess, Universität Erlangen-Nürnberg Carmichael, Fiona, University of Birmingham Clausen, Volker, Universität Duisburg-Essen Cleveland, Gordon H., University of Toronto Conti, Garbriella, University of Chicago Cornelissen, Thomas, University College London Croux, Christophe, Katholieke Universiteit Leuven Cucina, Domenico, Sapienza Universitä di Roma Czarnitzki, Dirk, KU Leuven Czura, Kristina, Universität Frankfurt a . M . Danzer, Alexander M., Universität München Dawson, Peter, University of East Anglia del Corral, Julio, Universidad de Castilla-la Mancha Dovern-Pinger, Pia, Z E W Mannheim Downward, Paul, Loughborough University Drechsel, Katja, IWH, Halle Drichoutis, Andreas, University of Ioannina Eggert, Wolfgang, Universität Freiburg Elhorst, Paul, University of Groningen

Winker

Esposito, Lucio, University of East Anglia Feess, Eberhard, Frankfurt School of Finance and Management Felbermayr, Gabriel, ifo Institut München Felstead, Alan, Cardiff University Fendel, Ralf, WHU-Otto Beisheim, Vallendar Flaig, Gebhard, LMU München Forrest, David, University of Salford Frambach, Hans, BU Wuppertal Frick, Bernd, Universität Paderborn Garcia, Jose, Universidad Politecnica de Cartagena Gbakou, Monnet Benolt Patrick, Universität Hohenheim Gilli, Manfred, Universität Genf Gong, Erick, Middlebury College Görg, Holger, Institut für Weltwirtschaft, Kiel Haan, Marco, University of Groningen Hanck, Christoph, Universität Duisburg-Essen Hefeker, Carsten, Universität Siegen Heiland, Frank, Baruch College, New York Heilemann, Ullrich, Universität Leipzig Heineck, Guido, Universität Bamberg Herzer, Dierk, HSU Hamburg Heyndels, Bruno, Vrije Universiteit Brüssel Hoppe, Eva, Universität zu Köln Huth, Thomas, Leuphana Universität Lüneburg Jochem, Axel, Deutsche Bundesbank Jung, Benjamin, Universität Tübingen Jung, Robert, Universität Hohenheim Kappler, Markus, ZEW Mannheim Kaufmann, Sylvia, Swiss National Bank Kemnitz, Alexander, TU Dresden Kleinen, Jörn, Universität Graz Klevmarken, N. Anders, Uppsala University Kluve, Jochen, HU Berlin Knabe, Andreas, Otto-von-Guericke Universität Magdeburg König, Philipp, TU Berlin Königstein, Manfred, Universität Erfurt Kraekel, Matthias, Universität Bonn Krauth, Brian, Simon Fräser University Kupei^ Gerard, University of Groningen Lallemand, Thierry, Universite Libre de Bruxelles Linares, Pedro, Universidad Pontificia Comillas Logeay, Camille, Hochschule für Technik und Wirtschaft, Berlin

Gutachter zum 232. Jahrgang (2012) · VII

Los, Bart, University of Groningen Mandler, Martin, Deutsche Bundesbank Mastromarco, Camilla, University of Salento Mat Som, Ahmad Puad, Universiti Sains Malaysia Mayer, Horst, FH Vorarlberg McHale, Ian, University of Salford Meckl, Jürgen, Universität Gießen Mellander, Erik, Institute for Labour Market Policy Evaluation, Uppsala Meyer, Mark, GWS Osnabrück Muehlheusser, Gerd, Universität Hamburg Muehlmann, Samuel, Universität Bern Mueller Christopher, Universität Frankfurt a. M . Niebuhr, Annekatrin, Universität Kiel Norton, Edward C., University of Michigan Overesch, Michael, Universität Frankfurt a . M . Page, Katie, Queensland University of Technology Pajak, Serge, Universite Paris-Sud Paul, Rodney, Syracuse University Pewsey, Arthur Universidad de Extremadura Pohlmeier, Winfried, Universität Konstanz Prantl, Susanne, Universität zu Köln Proietti, Tommaso, The University of Sydney Psaradakis, Zacharias, Birkbeck University of London Puhani, Patrick, Universität Hannover Pyka, Andreas, Universität Hohenheim Rammet; Christian, Z E W Mannheim Rässler, Susanne, Universität Bamberg Rathke, Alexander Universität Zürich Rendtel, Ulrich, Freie Universität Berlin Rey, Günter-Daniel, FernUniversität Hagen Rietet; Heinz, Universität Hamburg Riphahn, Regina, Universität ErlangenNürnberg Rothmann, Philip, East Carolina University, Greenville Saarn, Marianne, Z E W Mannheim Savin, Ivan, Universität Jena Schänk, Thorsten, Johannes Gutenberg Universität Mainz Schefczyk, Michael, Leuphana Universität Lüneburg Schmalwasser, Oda, Destatis, Wiesbaden Schmidt, Christoph M., RWI Essen Schnabl, Gunther, Universität Leipzig

Schoonbeek, Bert, University of Groningen Schrimpf, Andreas, Bank for International Settlements, Basel Schwiebert, Jörg, Universität Hannover Seals, Alan, Auburn University Seetanah, Boopen, University of Mauritius Siedler, Thomas, DIW Berlin Siegler, Benedikt, ifo Institut, München Siliverstovs, Boriss, Ε Τ Η Zürich Simmons, Robert, Lancaster University Spahn, Peter, Universität Hohenheim Stadtmann, Georg, Europa-Universität Viadrina, Frankfurt/Oder Stephan, Gesine, IAB Nürnberg Stevens, Arnoud, Universiteit Gent Tatsi, Eirini, Universität Frankfurt a. M . Tauchmann, Harald, RWI Essen Tequame, Miron, University of Namur Thomsen, Stephan L., N I W Hannover Thöni, Christian, Universität St. Gallen Tillmann, Peter, Universität Gießen Torna, Michael, Armstrong Atlantic State University Untiedt, Gerhard, TU Clausthal van Dalen, Ryanne, University of Groningen van der Klaauw, Bas, University Amsterdam van Eijkel, Remco, University of Groningen van Ours, Jan, Tilburg University van Witteloostuijn, Arjen, University of Antwerp von der Lippe, Peter, Universität Duisburg-Essen Wang, Sijing, University of Wisconsin Wegner, Gerhard, Universität Erfurt Weichenrieder, Alfons, Universität Frankfurt a . M . Westerheide, Peter, BASF, Ludwigshafen Wezel, Filippo, Universita della Svizzera Italiana Wilhelm, Markus, Universität Hamburg Winkelmann, Rainer, Universität Zürich Witt, Ulrich, Universität Jena Wolf, Elke, Hochschule München Wolff, Joachim, IAB Nürnberg Wrohlich, Katharina, DIW Berlin Yang, Philip, Universität Hannover Ziegler, Andreas, Universität Kassel Zweimüller, Martina, Universität Linz Zwick, Thomas, Universität München Zwols, Yori, Concordia University Montreal

Economics of Risky Behavior and Sensation Seeking Edited by Horst Entorf and Peter Winker

With Contributions by Ali, Mir M . , Food & Drug Administration, College Park, USA Chai, Andreas, Griffith Business School, Griffith University Commandeur, Jacques J . F., VU University Amsterdam

Lucius & Lucius · Stuttgart 2 0 1 2

Koopman, Siem Jan, VU University Amsterdam Tequame, Miron, University of Namur Vujic, Suncica, University of Bath

Guest Editors Professor Dr. Horst Entorf Goethe-Universität Frankfurt FB Wirtschaftswissenschaften Grüneburgplatz 1 6 0 3 2 3 Frankfurt am Main [email protected] Professor Dr. Peter Winker FB 02 - Statistik und Ökonometrie Justus-Liebig-Universität Gießen Licher Straße 64 3 5 3 9 4 Gießen [email protected]

Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar ISBN 9 7 8 - 3 - 8 2 8 2 - 0 5 7 6 - 5

© Lucius Sc Lucius Verlagsgesellschaft mbH · Stuttgart - 2 0 1 2 Gerokstraße 5 1 , D - 7 9 1 8 4 Stuttgart Das Werk einschließlich aller seiner Teile ist urheberrechtlich geschützt. Jede Verwertung außerhalb der engen Grenzen des Urheberrechtsgesetzes ist ohne Zustimmung des Verlags unzulässig und strafbar. Das gilt insbesondere für Vervielfältigungen, Ubersetzungen und Mikroverfilmungen sowie die Einspeicherung und Verarbeitung in elektronischen Systemen.

Satz: Mitterweger & Partner Kommunikationsgesellschaft mbH, Plankstadt Druck und Bindung: Neumann Druck, Heidelberg Printed in Germany

Jahrbücher f. Nationalökonomie u. Statistik (Lucius & Lucius, Stuttgart 2012) Bd. (Vol.) 232/6

Inhalt / Contents Guest Editorial

604-605

Abhandlungen/Original Papers Tequame, Miron, HIV, Risky Behavior and Ethno-linguistic Heterogeneity Ali, Mir Μ., Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior Vujic, Suncica, Siem Jan Koopman, and Jacques J. F. Commandeur, Economic Trends and Cycles in Crime: A Study for England and Wales Chai, Andreas, Consumer Specialization and the Demand for Novelty: a Reconsideration of the Links and Implications for Studying Fashion Cycles in Tourism

606-632 633-651 652-677

678-701

Diskussionsbeitrag / Discussion Paper Heinemann, Friedrich, FIRE for the Euro: A Superior Way to Bond Market Stabilization

702-709

Buchbesprechungen / Book Reviews Benedictis, Luca de, Luca Salvatici, The Trade Impact of European Union Preferential Policies. An Analysis Through Gravity Models Oppenländer, Karl Heinrieb, Erinnerungen eines Wirtschaftsforschers. Privates und Berufliches Papadimitriou, Dimitri B., L. Randall Wray, The Elgar Companion to H y m a n Minsky Porter, Michael E., Clemens Guth, Redefining German Health Care Moving to a Value-Based System Sattarhoff, Cristina, Statistical Inference in Multifractal Random Walk Models for Financial Time Series Sauer, Beate, Von der Liquiditätssicherung zum Ertragsstreben Willgerodt Hans, Werten und Wissen - Beiträge zur Politischen Ökonomie Bandinhalt des 232. Jahrgangs der Zeitschrift für Nationalökonomie und Statistik Contents of Volume 232 of the Journal of Economics and Statistics

710 715 716 717 721 723 725

Jahrbücher f. Nationalökonomie u. Statistik (Lucius & Lucius, Stuttgart 2012) Bd. (Vol.) 232/6

Guest Editorial Economic theory postulates rational economic actors and risk averse behavior. However, this is an assumption that only few human beings always and fully live up to. At first glance, economic reasoning even seems to be in stark contrast to a large spectrum of risky behavior and sensation seeking observed in reality, ranging from high risk recreational activities such as mountain climbing, excessive use of alcohol and other drugs, crime, unprotected or promiscuous sexual behavior, driving under the influence, smoking and obesity to excess gambling and risky financial market activities. Even though many of these aspects have been studied in other fields of behavioral sciences such as criminology or psychology, they also are promising and relevant topics of future research in the realm of economics, where analyzing incentives, costs and benefits helps understanding risky human behavior. With this special issue of the Journal of Economics and Statistics we want to pave the way for contributions in this field. Obviously, this special issue cannot cover all the topics mentioned above. In fact, the four contributions eventually accepted after a carefuly refereeing process address only some facets of the field, but provide interesting new insights and, consequently, highlight the relevance of research in the domain of risky behavior and sensation seeking. In the sequel, we briefly sketch the topics of the four contributions. Reducing risky sexual behavior is one of the major focuses of HIV prevention policies in Africa. Understanding changes or its characteristic is an important base for predicting the future path of the epidemic and the pattern of its prevalence. In her article HIV, Risky Behavior and Ethno-linguistic Heterogeneity Miron Tequame (University of Namur) analyses the impact of extramarital sexual behavior on HIV infection using individual micro data from the sub-Saharan countries Malawi, Cameroon, Kenya and Ethiopia. Her theoretical foundation is grounded on the observation that information circulates more easily within ethnic groups than across. Hence individuals tend to choose their extramarital partners from outside their own network and that of their spouse to hide their infidelity, due to cross-group anonymity. Miron Tequame's paper augments the literature by showing that the effect of ethno-linguistic heterogeneity on risky sexual behavior seems to be stronger for women; they are internalizing the expected cost of detection in a more efficient way than men. Also the second paper in this volume is using a rich individual data set in order to analyze public health problems. One of the major instruments that have emerged as the main policy tool in the effort to reduce youth smoking is higher cigarette prices through increased cigarette excise taxes. New results by Mir Ali (U.S. Food & Drug Administration, College Park) of his article Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior suggest that adolescents are not necessarily the most responsive to taxes. Based on insights from social learning theory according to which both peers and family simultaneously affect adolescents' acquisition behavior and values, Mir Ali shows that the influence from peers and family plays a more significant role in influencing adolescent smoking. Thus, previous results indicating substantial tax policy gains on youths at the margin of deciding to take up smoking seem to be exaggerated. In their paper Economic Trends and Cycles in Crime: A Study for England and Wales Suncica Vujic (University of Bath), Siem Koopman, and Jacques Commandeur (both at VU Amsterdam) reconsider the potentially cyclically behavior of property crime rates in relation to macroeconomic activity indicators. The authors propose the use of a time

Guest Editorial · 605

series framework within the unobserved components models, also known as the structural time series (STS) model, in order to study economic-induced behavior in burglary and theft data in England and Wales in the period from 1 9 5 5 to 2 0 0 1 . This approach has the advantage that macroeconomic time series as well as crime rates can be decomposed in a persistent component (nonstationary trend) and a transitory component (stationary cycle). Results show strong evidence for cyclical behavior in burglary and theft rates, which can be fully explained by the cyclical dynamics of the economy. Appropriate theoretical explanations on causes and consequences of sensation seeking and risky activities are scarce. Andreas Chai (Griffith Business School) contributes to the theoretical debate on long-run trends of consumer behavior. O n e of the interesting questions is whether the emergence of relative convenient forms of entertainment may lead to an habituation and a 'joyless economy' in which more convenient means of attaining arousal that require few skills (e.g. watching television) are preferred over relatively more complex types of entertainment that require more knowledge and skills from consumers (e.g. watching the opera). Andreas Chai reaches the contrary conclusion. Based on non-cognitive and cognitive learning processes, he argues that consumers will gain specialized knowledge and preferences for particular recreational activities. This consumer specialization process would fundamentally impact the rate at which consumers become habituated to novelty. His results have consequences for understanding the direction and length of fashion cycles in recreational activities. Having presented a brief summary o f the four papers in this special issue, we emphasize again that risky behavior and sensation seeking is an interesting and fast developing field in applied economics. The editors look forward to future research in this area. Horst

Entorf

Peter

Winker

Jahrbücher f. Nationalökonomie u. Statistik (Lucius & Lucius, Stuttgart 2012) Bd. (Vol.) 232/6

HIV, Risky Behavior and Ethno-linguistic Heterogeneity Miron Tequame University of Namur, Belgium JEL 118; J16; R23; J15 Ethno-linguistic heterogeneity; social networks; risky sexual behavior; HIV/AIDS; Africa.

Summary Ethno-linguistic heterogeneity is associated with indicators of development like civil society, trust, quality of institutions, economic performance and participation. Recently, it has been found to be favorable for optimizing agents who want to engage in risky sexual behavior as they can select partners outside their own network and that of their spouse. This paper augments the literature by arguing that the effect of ethno-linguistic heterogeneity on risky sexual behavior is gender related. In contexts where women have more economic benefits (or losses) from sexual partners, they better internalize the cost of detection. This study shows that, with respect to men, ethno-linguistic heterogeneity significantly affects women's HIV status and their risky sexual behavior. Accordingly, it also affects positively the probability of being in a discordant couple where the wife is HIV positive.

1

Introduction

In sub-Saharan Africa the literature states that there is little response in risky sexual behavior due to H I V epidemics (Stoneburner/Low-Beer 2 0 0 4 ; B l o o m et al. 2 0 0 0 ; Williams et al. 2 0 0 3 ) . However, response in risky behavior is heterogeneous a m o n g individuals based on their s o c i o - e c o n o m i c characteristics like education o f w o m e n (De Walque 2 0 0 7 ; Dupas 2 0 0 9 ) , future life expectancies and expected revenues (Oster 2 0 1 2 ) . T h e most prevalent prevention policy in Africa is the a n t i - H I V education labeled A B C : Abstain, Be faithful and use C o n d o m . A B C policy has proven t o be effective in Uganda and it's being extended t o other sub-Saharan countries without, up t o now, any clear evidence o f success (Green et al. 2 0 0 6 ; Oster 2 0 0 7 ) . 1 N o w a d a y s , risky sexual behavior is one o f the m a j o r focuses o f H I V prevention policies. Understanding changes or its characteristic is an important base for predicting the future path of the epidemic and the pattern o f its prevalence. Based on r a w data, the spread o f H I V in sub-Saharan Africa is heterogeneous among regions. O n e reason is the presence o f other untreated and sexually transmitted diseases that favor H I V infection (Oster 2 0 0 5 ) . 2 Another reason is the circumcision o f men that 1

2

Studies have given alternative explanation for why A B C was claimed to be effective in Uganda. Routes of exports might have an important role rather than just population based educational campaign. The high rate of H I V transmission in Africa is due to other untreated sexually transmitted diseases (STD). The difference in the transmission rates is large enough to explain the observed difference in prevalence between the United States and Sub-Saharan Africa.

HIV, Risky Behavior and Ethno-linguistic Heterogeneity • 607

reduces sexually transmitted diseases (Weiss et al. 2000). Local economic development also plays its role on HIV infection, as emphasized in Oster (2007). Under the assumption that risky sexual behavior is a normal good, economic development, like for example exportation, has an important role on individuals' HIV status. In contrast to large number of studies examining individual-level characteristics and determinants of infection, few studies examine community level characteristics and networks that affect individual's behavior and hence HIV epidemics. This research contributes in analyzing the diverse rate of HIV prevalence across and within countries and gives insights in understanding the role of ethnolinguistic heterogeneity on risky sexual behavior. Heterogeneity, in terms of ethnicity, race and religion, on social capital and, consequently, on economic variables has been discussed in the literature. For example, Alesina and La Ferrara (2000) found that ethnic, racial and economic heterogeneity have a negative impact on social capital and consequently on economic development in the USA. It is generally associated with lower trust among communities because members of the community have different taste, making it harder to enforce a system of social sanctions. In these communities, it is more likely that informal social networks and community organizations are weak leaving less-or-unsanctioned socially deviating behaviors. Pongou (2011) developed a theory to explain how community-level ethnic heterogeneity determines the formation of sexual networks among couples, and how this, in turn, affects the spread of HIV/AIDS. In the model, agents derive utility from sexual relationships and infidelity is punished if detected by own partner. When information circulates more easily within ethnic groups than across, agents tend to choose their extramarital partners from different groups to hide their infidelity, due to cross-group anonymity. The paper extends the finding of Pongou (2011) by underlining the role of gender-gap. Women better internalize ethno-linguistic heterogeneity when optimizing the number of extramarital partners. In a set-up where individuals gain non-material and material benefits from engaging in extramarital sex, the cost of being sanctioned due to detection is augmented by the material gain (loss) from that partner. With respect to Pongou (2011), in a pro-male economy, where women enjoy more benefits from their sexual partners, the findings suggest that ethno-linguistic heterogeneity shapes more women's behavior rather than men's (Swilder et al. 2007). 3 The study gives further evidence of this relationship by extending the analysis on couples' data-set and concordance of their HIV status. The study is based on the Demographic and Health Survey data-sets (DHS) that gives the possibility to link the HIV status of an individual with her ethnic characteristic. The analysis gives evidence for four sub-Saharan countries: Malawi, Cameroon, Kenya and Ethiopia in order of HIV prevalence. The choice of these countries is based on data availability on ethnicity, territorial comparability and relevant HIV prevalence. With respect to Pongou (2011) I exclude Burkina Faso and Ghana for territorial comparability and also because HIV prevalence is very low in these two countries. The period of the survey ranges between 2003 and 2005. The paper uses an indicator of heterogeneity that is widely used in the literature: the Ethno-Linguistic Fractionalization (ELF) index based on the Herfindahl index. Consistency of the hypothesis tested is verified on other indicators of heterogeneity: the 3

In sub-Saharan Africa, transactional sex is frequently found to be prevalent not only among sex workers but also within different types of sexual relationships, including long-term partnership and marriage.

608 · Miron Tequame

Generalized Ethno-Linguistic Fractionalization (GELF), based on a similarity matrix of ethnicity among couples and the Entropy index (EI) which is an indicator of diversity. These indicators differ for the degree of interaction between the ethnicities. The ELF gives more weight to individuals with higher proportion in the population. The GELF takes into account some aspects of similarity between the groups. The Entropy index, on the contrary, gives more weight to the number of ethnicities in the community. The results suggest that ethno-linguistic heterogeneity matters more on HIV status of women rather than men and this finding is not driven by the biological exposure of women to HIV infection. Notwithstanding, I further analyze the data-set of couples together with their HIV status. I show the role of ethno-linguistic heterogeneity on discordant couples married for more than 5 years. I find a positive relationship between the indicator and the probability of being in a discordant couple where she is positive and the husband is negative. On the reverse, I do not find any effect of ethno-linguistic heterogeneity on discordant couples where he is HIV positive. This finding suggests that the effect of ethno-linguistic heterogeneity is gender related. The paper is organized as follows: Section 2 gives an outline of the framework that lies behind the mechanism; Section 3 derives some comparative statics to be tested and Section 4 illustrates the empirical strategy and results. A sensitivity analysis is conducted in Section 6 and finally, some conclusions are laid off in Section 7.

2

Conceptual framework

Ethnic fractionalization has an important role in the political economy of many countries as it leads to political instability, poor quality of institutions, badly designed economic policy and poor economic performance. Several studies have shown the negative relationship between racial or ethnic heterogeneity and the provision of public goods (Alesina et al. 1999; Miguel/Gugerty 2005a) while others focused on the impact on productivity (Bandiera et al. 2005; Alesina/La Ferrara 2005). A comparison across US counties showed that higher ethnic fractionalization is associated with a lower rate of collective action in the community, lower trust and participation (Vigdor 2004; Alesina/La Ferrara 2000). The role of ethno-linguistic heterogeneity on low public expenditures and provision of public goods has an implication on HIV/AIDS. In fragmented societies, governments are less likely to provide anti-HIV policies because of lower civil society and collective action as argued in Lieberman (2007). Measuring, and thus defining, ethno-linguistic heterogeneity in sub-Saharan countries is challenging. The traditional measure based on the Herfindahl index, conventionally called Ethno-Linguistic Fractionalization (ELF), is given by the probability of two randomly drawn individuals from the population belong to two different groups. If I consider a community composed of more than two different ethnic groups, with s, being the share of group i over the total at community level and η being the total number of ethnicity, then the ELF index would be: η (i)

It varies between 0-1 and an increase in the indicator means more heterogeneous society. The ELF assumes that language and ethnicity map one-to-one and both have similar con-

HIV, Risky Behavior and Ethno-linguistic Heterogeneity · 609

sequences on individuals' networking and social sanctions. Social heterogeneity is endogenous to many unobservables at community level. It is continuously in motion and difficult to define across different cultural, time and space boundaries. For example, continuous regional migration and inter-mixing with other groups suggest that ethno-linguistic fractionalization is a function of local economic development, colonial policy and inter-group mixing (Alesina et al. 2003). A more detailed critics to indicators of ethno-linguistic heterogeneity in Africa have been argued in Posner (2004). In some societies there are different similarities among different ethnic groups which compose the community. The ELF index gives the same weight to all ethnicity, while in reality some might have similar cultural values which should be taken into account. The ELF index attributes a 0 or 1 value to individuals in the community depending if they belong or not to an ethnicity or race. On the reverse, the GLF index has been proposed in Bossert et al. (2008) where each individual is weighted by similarity values. Similarity measurement can be based on income, education, language and etc. To compute the indicator of similarity, I use the matching of ethnicities from the data-set of couples. The reasoning behind is if a high proportion of people from ethnicity " x " get married to another ethnicity "y" then similarity between these two ethnicities is non zero in terms of cultural values and networks. To compute similarities between two ethnicities, I take the average of four frequencies: frequency of wife from ethnicity "x" getting married to husband from ethnicity "y"; frequency of wife from ethnicity "y" getting married to husband from ethnicity "x"; and similarly for the husband. To give you an illustration on the indicator I construct, I consider a community with three ethnicities. The similarity matrix S of couples' matching, based on the ethnicity of the husband and wife, is as follows: 1

$x,y $x,z

S = $z,x

(2)

s

z,y

1

where s x y = syx = avg\fyx, fxy, fyx, fxy~^ and fxy denotes the proportion of husbands χ getting married to women of y (script h stands for husband while w for wife). The matrix is symmetric and equal to 1 on the diagonals as similarity with own ethnicity is 1.1 construct a similarity matrix as above for each enumeration area in the data-set. Based on the above matrix, S, the Generalized Ethno-Linguistic Fractionalization (GELF) indicator, as proposed in Bossart et al. (2008), is as follows: G £ L f

=

1

- ^ E E s ' V i=i j=i

(3)

where i,je{x,y,z} and is an element of the matrix S. Another index of diversity computed is the Entropy Index (EI), also known as the Shannon index, used for species to measure biodiversity. The ELF index gives higher weights to higher proportion of ethnicities as it has a quadratic form, while the EI gives a decreasing weight as the proportion of a specific ethnicity increases in a community. It takes a maximum value when all the ethnicities are equally represented in the community. I compute a normalized EI, between [0,1], in each enumeration area: (»-!)'

ln{n)

610 • Miron Tequame

where s, is the proportion of ethnic i in the community, η is the number of ethnicities in the community and Ν is the total number of individuals in the community. The above indicators are computed on ethnicities in each enumeration area by exploiting data at individual level. There are a total of 50 ethnicities in Cameroon, 67 in Ethiopia, 15 in Kenya and 9 in Malawi. The correlation between the three indicators I computed is 0.79 between ELF and GELF, 0.94 between ELF and EI and 0.75 between GELF and EI. 3

Theoretical model and comparative statics

In this section, I extend the basic fidelity model developed by Pongou (2011) where a community is assumed to be composed of e ethnic groups Gi,..., G*,, G/,..., Ge. Each group has a distinct language and culture, which makes social interactions easier and more intense within groups than across. It focuses on an individual's decision-making of sexual partners. The utility function of an agent i in choosing sexual partners is the following: u(s, y) = v{s) + w{y) - c(s, y)

(5)

where s is the total number of sexual partners allocated across ethnic groups, that in algebric form is equal to s = ]TjLi sk- The model differs from Pongou (2011) because I assume that the representative agent's utility function also depends on y, that is the total amount of material benefit deriving from having sex with the s partners, for simplicity expressed in terms of income. In a pro-male biased economy y can also represent social status, other than income or material benefit. As in Pongou (2011), c represents the reputational cost due to detection and it is a function of both s and y. In a nutshell, if agent i has a liaison with partner / belonging to ethnic group G/ she yields y;. Therefore, the total amount of income y is determined according to the vector (y\,... ,y/,,... ,ye) associated to the vector ( s i , . . . , Sf,,..., s e ) of her sexual partners; thus, in algebraic terms, it corresponds toy = J2h=i shjh· The basic assumption relies on the fact that yielded income does not vary within ethnic groups, but only across groups. The rationale of this hypothesis lies on the focus that is strictly addressed on investigating the relation between ethnic groups and sexual behavior. By the same token, as described below, the cost of infidelity is going to depend upon both sexual partners and income. Let / and k be two sexual partners of agent /. The event t h a t ; detects the liaison between i and k has the probability p to occur if /' and k belong to the same ethnic group, while the probability q is associated when / and k belong to different ethnic groups. As in Pongou (2011), it is straightforwardly assumed that q < p. Notwithstanding, the cost of infidelity is not constant for each sexual partner. Particularly, assume that i has s partners allocated across groups according to the vector (s = s\,... ,Sh, • • •,se). A partner of agent i belonging to ethnic group Gh is expected to detect \p(sh — 1) + (5 — s/,)] liaisons of i with other partners. The Sf, sexual partners of agent i that belong to the ethnic group G/, are thus expected to detect {sb\p(sh — 1) + q(s — Sfe)]} liaisons of i with other partners. Summing across all partners s and ethnic groups yields h\p(sh ~ 1) + q{s — s^,)]}, which is the total expected number of liaisons that s sexual partners of i will detect. The punishment cost is modeled differently from Pongou (2011) because it allows for a group-variant loss of income per detection. I am interested in evaluating how the fidelity model is affected by different punishment costs varying across groups according to a vector y = (y\,... ,y/,,... ,ye).

HIV, Risky Behavior and Ethno-linguistic Heterogeneity · 611

In other terms, if a partner / belonging to ethnic group Gj, detects a liaisons between i and k, the punishment cost is equal to yt,. Hence, I assume that the punishment cost corresponds to the income that agent i would yield from having each sexual partner. Consequently, yh must be viewed as a benefit if there are no detections, but it becomes a loss in case of detection. The cost function can be written in the following way: e

φ,ν)

= Y,sh{yh h=1

+ c)\p{sh - 1) + q(s - sh)}

(6)

where c is the reputational cost per detection, as in Pongou (2011). By considering linear utility function, the optimization problem of agent i is divided into two steps. 1. First, the total amount of sexual partners s is considered fixed and the agent must decide how to allocate sexual partners across the ethnic groups in order to maximize her expected utility. 2. Second, given the optimal allocation of sexual partners in the vector 5 across different ethnicities, she derives the optimal amount of sexual partner s*.4

3.1 Optimal allocation of partners across ethnic groups The first step of agent's maximization problem can be written as follows: e

e

max Eu = s + ~S^shyh - Y*sh(yh {sfc> b=ι h=l

+ c)\p{sh - 1) + q(s - s*)]

(7)

(8)

h=1

In the first step, the agent's maximization problem determines s*h that is the optimal allocation of sexual partners across ethnicities. In a second step, the agent will define the total amount of partners s which is a vector of the optimal allocation of partners across ethnicities, (s = s\,... ,s*h,... ,s*e) By substituting the constraint in the expected utility and after some algebra, it yields the following first order condition: yh - 2{p - q){yh + c)sh + (p - sq){yh + c) - (qY^sh{yb

+ c) - l ) = 0

(9)

By putting Σι> shVh = y I can easily derive that *

(1 +p-sq) 2 (p-q)

[q(y + es) + (c — 1)] 2 (yh + c)(p-q)

1

J

However, y depends on Sh as well. I denote the total gains from all groups except those yielded from sexual partners s^ belonging to the ethnic group G/,. In the same vein, S-k is the total amount of sexual partners except those belonging to the ethnic group 4

The choice on the timing of optimization is based on semplicity and it does not affect the main conclusion of the paper.

612 · Miron Tequame

Gh. It is straightforward that y_b arises when partner j belonging to ethnic groups is expected to detect liaisons of i with other sexual partners. Thus, I can rewrite optimal Sb in the following way after some algebra: (1 Su

+ p - s q )

=

[q(y_h

(2 p - q )

+ cs_h) (2ρ

-

-

q)(y

(1 +

h

-

c)}

(11)

c)

The optimal solution of Sb can be divided in two factors. The first factor does not depend on material gain. The second factor accounts both for overall punishment cost due to the sanctions carried out by sexual partners of the ethnic groups G_j, {i. e. q{y-b + cs-h)} a n d for net marginal cost in terms of sexual utility and cost of reputation (1 — c). Note that c > 1 because it is reasonable to assume that the marginal cost of sexual encounter in case of full detection is greater than the marginal utility. 5 The following marginal derivative is useful to ascertain the relation between y/, and s 0 because

(c -

+

[q{y-h

1)]

(12)

c)2

+

h

+ (c — 1)] > 0.

cs~b)

oyb

3.2 Optimal number of sexual partners Given the optimal allocation in the vector s*, the second step consists in deriving the optimal amount of sexual partners. Hence, I rewrite Sb as a function of s; after some algebra, it yields the following expression: s (y + c) S'h

_e(yh

| + -

+ c)

'

(yh

J

s,y +

+

1 + p 2(P

c)_

-

sq

1 -

q)

(y + c) (yb

+

c).

(13)

where y is the expected value E(jb) and n i y is the covariance between s/, and yb·6 If I assume {yi = .. .yy = . . . y e } , and thus y/, = y and = 0, the solution collapses to the Pongou (201 l)'s result, s*h = le, i. e. sexual partners are equally allocated across ethnic groups. The second step is the following optimization problem: m a x

Eu

S.t.

Sb

W

= s +

>

V

Y^sbis^yb + c)[P(sa(s) - 1) + q{s - sÄ(s))]

sb(s)yb

's (y + c) , ? ( y b + c)

°s,y {yb

+ c)_

+

1 + p 2(P

-

sq q)

1 -

(y + c) (yb + c).

(14)

(15)

This condition avoids an equilibrium where individuals choose positive number of sexual partners even when the probability of detection is one. By substituting J2bsl>yh = y in the first order condition, I can replace [q(yh + c ) - (1 - c)] = I [(1 + p - sq)e(y + c) — 2(p — q){y + sc)] in (13). I get S f , as a function of s by taking into account that y = e(sy) = sy + eaSiy, where ( s y ) is the expected value E[$hyb], y is the expected value of £(yt), and a s y is the covariance.

HIV, Risky Behavior a n d Ethno-linguistic H e t e r o g e n e i t y · 6 1 3

The following first order condition is derived: a Ει ^ - = l + (y + c)-2(p-q)J2sh(yh Ü7 b -(y) in the expected utility. It is also positively related to high-income ethnic groups with respect to the mean. By assuming y\ = ... yi, = ... ye = y, it is possible to simplify the optimal solution (16) in the following compact formula: e [ l + y + p(y + c)\ 2[(y + c)(p-q + qe)]

1

j

Again, by holding y = 0 the optimal solution collapses to Pongou (2011)'s. It corresponds to the case of equal distribution of income over each ethnic group. In order to cope with comparative statics, it is worth stressing the following propositions that come from solving the first derivatives. Throughout the paper I will refer to these relations. Proposition 1. ^ > 0 as (p - q) > 0. in fact, % ' 3i

2 (y+c)(p-q+qef

>0

As in Pongou (2011), the positive partial derivative of s* with respect to e implies that if the number of ethnic groups is high then individuals tend to increase their number of sexual partners. Proposition 2.

·) % < 0 ; ii)

> 0 as c > 1; Hi)

< 0 ; iv)

> 0 as c > 1

In fact, the following holds: 0£ = Sc

£ii±a < o· 2 (y+c)2(p-q+qe)

e c Bsl = l -y > 0· 8y 2(y+c)2 (p-q+qe)

eV _ dedc

(p-