Microanalyses of Voting, Regulation and Higher Education
by Johannes Meya
Date of Examination:2015-06-01
Date of issue:2015-06-22
Advisor:Prof. Dr. Robert Schwager
Referee:Prof. Dr. Robert Schwager
Referee:Prof. Dr. Panu Poutvaara
Persistent Address:
http://dx.doi.org/10.53846/goediss-5152
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Abstract
English
This dissertation contains economic microanalyses of voting, regulation and higher education. It is about individual decisions, institutions, and the incentives the latter create. Three chapters of this dissertation are based on empirical results, whereas one chapter is a purely theoretical analysis employing dynamic game theory. The first empirical chapter investigates the role of monetary self-interest and social preferences in referenda. It examines the collective purchasing decisions of university students regarding deeply discounted flat rate tickets for public transportation and cultural amenities. For each referendum, individual usage data provides a measure of personal monetary benefits the ticket in question provides a voter with. The analysis shows that students who gain a lot from having a ticket take part in a referendum with higher probability, suggesting instrumental voting. In each referendum, a majority votes in line with self-interest, providing strong evidence for pocketbook voting. However, social preferences and motives play an important role, too, and shift the vote of a sizable minority against their own financial interests. The second empirical chapter presents a microanalysis of the determinants of academic success of university students. It is based on a unique administrative dataset collected at a German university. The results show that the grade of the high school leaving degree is strongly related to students’ success in higher education. The impact of socio-economic variables is, in contrast, relatively small. Looking separately at the different fields of study, substantial differences emerge. At some faculties, most students can expect to graduate with strongly differentiated grades. At others, chances to reach the degree are lower. However, if graduating, grades are relatively good conditional on high school performance. At a third group of faculties, graduation seems very challenging for weaker students and they can hardly expect good grades. Building on these results, the third empirical chapter focuses on the impact of a temporary study-related visit at a university in a foreign country on students’ academic performance. Due to the rich dataset at hand, propensity score matching is applied to account for self-selection into international mobility. The key finding in this chapter is that a sojourn has a positive impact on the final university grade. The analysis suggests that this effect results from selective transferring of grades. Moreover, the chapter shows that a sojourn has a negative impact on the probability of graduating within the standard time period. Finally, the theoretical chapter investigates the incentive structure for firms under a yardstick regulation that uses historical cost data. The idea of this kind of regulation is to have several local natural monopolies ‘compete’ via a regulation in which constraints for each firm are defined based on cost data of other comparable firms. In static settings, yardstick regulation decouples the performance of a firm from its constraints and thereby provides strong incentives for efficient production. The main result in this chapter is that the incentive structure is different from this in a dynamic setting where historical cost data is used to define constraints. Firms can influence their own future constraints by affecting other firms’ constraints and behavior. Therefore, a ratchet effect, that should be overcome by this regulation, can occur and inefficient equilibria can exist without any form of collusion. Moreover, this problem is more severe if the firm with the lowest costs of all other firms instead of the average firm is the yardstick.
Keywords: academic performance; altruism; education; faculties; grade point average; instrumental voting; international student mobility; pocketbook voting; propensity score matching; public goods; ratchet effect; referendum; social preferences; tertiary education; university; yardstick competition; yardstick regulation