Encouragement and discouragement : Essays on taxation and government expenditure

This thesis consists of an introduction to a topic of optimal use of taxes and government expenditure and three chapters analysing these themes more in depth. Chapter 2 analyses to what extent a given amount of subsidies affects the labour supply of parents. Municipal supplement to the Finnish home care allowance provides exogenous variation to labour supply decision of a parent. This kind of subsidy that is tied to staying at home instead of working is found to have fairly large effect on labour supply decisions of parents. Chapter 3 studies theoretically when it is optimal to provide publicly private goods. In the set up of the model government sets income taxes optimally and provides a private good, if it is beneficial to do so. The analysis results in an optimal provision rule according to which the good should be provided when it lowers the participation threshold into labour force. Chapter 4 investigates what happened to prices and demand when hairdressers value added tax was cut in Finland from 22 per cent to 8 per cent. The pass-through to prices was about half of the full pass-through and no clear indication of increased demand for the services or better employment situation in the sector is found.

An Expenditure-Based Estimation of Self-Employment Income Underreporting in Finland

This paper estimates the extent of income underreporting by the self-employed in Finland using the expenditure based approach developed by Pissarides & Weber (1989). Household spending data are for the years 1994 to 1996. The results suggest that self-employment income in Finland is underreported by some 27% on average. Since income for the self-employed is about 8 % of all incomes in Finland, the size of this part of the black economy in Finland is estimated to be about 2,3% of GDP.

Nuori konservatiivi : Tuure Junnila ja hänen poliittinen toimintansa vuoteen 1956

Tuure Junnila, PhD (1910-1999) was one of Finland's most renowned conservative politicians of the post-war period. Junnila is remembered primarily as a persistent opponent of Urho Kekkonen, a long-term Member of Parliament, a conspicuous opposition member and a prolific political writer. Junnila's ideologies and political views were conservative, and he is one of the most outstanding figures in the history of the National Coalition Party. Junnila also made an extensive career outside of politics, first as an economist and then as an executive of Finland's leading commercial bank Kansallis-Osake-Pankki. The Young Conservative is a partial biography written using traditional historical research methods, which examines Junnila's personal history and his activity in public life up to 1956. The study begins by investigating Junnila's background through his childhood, school years, university studies and early professional career. It also looks at Junnila's work as an economist and practical banker. Particular attention is paid to Junnila's political work, constantly focusing on the following five often overlapping areas: (1) economic policy, (2) domestic policy, (3) foreign and security policy, (4) Junnila and Urho Kekkonen, (5) Junnila, the Coalition Party and Finnish conservatism. In his economic policy, Junnila emphasised the importance of economic stability, opposed socialisation and the growth of public expenditure, defended the free market system and private entrepreneurship, and demanded tax cuts. This policy was very popular within the Coalition Party during the early 1950s, making Junnila the leading conservative economic politician of the time. In terms of domestic policy, Junnila demanded as early as the 1940s that a "third force" should be established in Finland to counterbalance the agrarian and labour parties by uniting conservative and liberal ideologies under the same roof. Foreign and security policy is the area of Junnila's political activity which is most clearly situated after the mid-1950s. However, Junnila's early speeches and writings already show a striving towards the unconditional neutrality modelled by Switzerland and Sweden and a strong emphasis on Finland's right to internal self-determination. Junnila, as did the Coalition Party as a whole, adopted a consistently critical approach towards Urho Kekkonen between 1951 and 1956, but this attitude was not as bluntly negative and all-round antagonistic as many previous studies have implied. Junnila was one of the leading Finnish conservatives of the early 1950s and in all essence his views were analogous to the general alignment of the Coalition Party at the time: conservative in ideology and general policy, and liberal in economic policy.

Kuluttaminen ja ylhäisaatelin elämäntapa 1700-luvun Ruotsissa

Consumption and the lifestyle of the high nobility in eighteenth-century Sweden This monograph is an analysis of the lifestyle, consumption and private finances of the Swedish high nobility during the eighteenth century (ca 1730 1795). It describes the lifestyle of one noble house, the House of Fersen. The Fersen family represents the leading political, economic and cultural elite in eighteenth-century Sweden. The analysis concentrates on Count Carl von Fersen (1716 1786) and his brother Count Axel von Fersen (1719 1794), their spouses and children. Carl von Fersen was a courtier whilst Axel von Fersen was an officer and one of the leaders of the Francophile Hat party. His son, Axel von Fersen the younger, was in his time an officer and a favourite of Gustavus III, King of Sweden, as well as a favourite and trusted confidant of Marie-Antoinette, Queen of France. The research is based upon the Fersen family s private archives, the Counts personal account books, probate inventories, letters and diaries. The study discusses the Fersens landed property and investments in ironworks and manufacturing, the indebtedness of the high nobility, high offices in civil administration, the militia and at court, as well as marriages as the foundations of noble wealth and power. It analyses the Count von Fersens revenue and expenditure, their career options and personal expenses, their involvement in the building and decorating of palaces, and the servants in service of the Fersen family as well as the ideal nobleman and his consumption. Central themes are inheritance, children s education, marriages and ladies preparing their trousseaux, the nobility ordering luxury goods from France, the consumption of Counts and Countesses before and after marrying and having children, the pleasures of a noble life as well as the criticism of luxury and sumptuousness. The study contributes to the large body of research on consumption and nobility in the eighteenth century by connecting the lifestyle, consumption and private finances of the Swedish high nobility to their European context. Key words: nobility, Fersen, lifestyle, consumption, private finances, Sweden, eighteenth century

Physical activity, fitness, abdominal obesity, and cardiovascular risk factors in Finnish men and women : The National FINRISK 2002 Study

Physical inactivity, low cardiorespiratory fitness, and abdominal obesity are direct and mediating risk factors for cardiovascular disease (CVD). The results of recent studies suggest that individuals with higher levels of physical activity or cardiorespiratory fitness have lower CVD and all-cause mortality than those with lower activity or fitness levels regardless of their level of obesity. The interrelationships of physical activity, fitness, and abdominal obesity with cardiovascular risk factors have not been studied in detail. The aim of this study was to investigate the associations of different types of leisure time physical activity and aerobic fitness with cardiovascular risk factors in a large population of Finnish adults. In addition, a novel aerobic fitness test was implemented and the distribution of aerobic fitness was explored in men and women across age groups. The interrelationships of physical activity, aerobic fitness and abdominal obesity were examined in relation to cardiovascular risk factors. This study was part of the National FINRISK Study 2002, which monitors cardiovascular risk factors in a Finnish adult population. The sample comprised 13 437 men and women aged 25 to 74 years and was drawn from the Population Register as a stratified random sample according to 10-year age groups, gender and area. A separate physical activity study included 9179 subjects, of whom 5 980 participated (65%) in the study. At the study site, weight, height, waist and hip circumferences, and blood pressure were measured, a blood sample was drawn, and an aerobic fitness test was performed. The fitness test estimated maximal oxygen uptake (VO2max) and was based on a non-exercise method by using a heart rate monitor at rest. Waist-to-hip ratio (WHR) was calculated by dividing waist circumference with hip circumference and was used as a measure of abdominal obesity. Participants filled in a questionnaire on health behavior, a history of diseases, and current health status, and a detailed 12-month leisure time physical activity recall. Based on the recall data, relative energy expenditure was calculated using metabolic equivalents, and physical activity was divided into conditioning, non-conditioning, and commuting physical activity. Participants aged 45 to 74 years were later invited to take part in a 2-hour oral glucose tolerance test with fasting insulin and glucose measurements. Based on the oral glucose tolerance test, undiagnosed impaired glucose tolerance and type 2 diabetes were defined. The estimated aerobic fitness was lower among women and decreased with age. A higher estimated aerobic fitness and a lower WHR were independently associated with lower systolic and diastolic blood pressure, lower total cholesterol and triglyceride levels, and with higher high-density lipoprotein (HDL) cholesterol and HDL to total cholesterol ratio. The associations of the estimated aerobic fitness with diastolic blood pressure, triglycerides, and HDL to total cholesterol ratio were stronger in men with a higher WHR. High levels of conditioning and non-conditioning physical activity were associated with lower high-sensitivity C-reactive protein (CRP) levels. High levels of conditioning and overall physical activities were associated with lower insulin and glucose levels. The associations were stronger among women than men. A better self-rated physical fitness was associated with a higher estimated aerobic fitness, lower CRP levels, and lower insulin and glucose levels in men and women. In each WHR third, the risk of impaired glucose tolerance and type 2 diabetes was higher among physically inactive individuals who did not undertake at least 30 minutes of moderate-intensity physical activity on five days per week. These cross-sectional data show that higher levels of estimated aerobic fitness and regular leisure time physical activity are associated with a favorable cardiovascular risk factor profile and that these associations are present at all levels of abdominal obesity. Most of the associations followed a dose-response manner, suggesting that already low levels of physical activity or fitness are beneficial to health and that larger improvements in risk factor levels may be gained from higher activity and fitness levels. The present findings support the recommendation to engage regularly in leisure time physical activity, to pursue a high level of aerobic fitness, and to prevent abdominal obesity.

Bat habitat requirements : implications for land use planning

Knowledge of the habitat requirements of bat species is needed in decision making in land use planning. Bats' hibernation requirements were studied both in Estonia and in southern Finland. In both countries, the northern bat and the brown long-eared bat hibernated in colder and drier locations, whereas Daubenton's bat and Brandt's/whiskered bats hibernated in warmer and more humid locations. In Estonia, the pond bat hibernated in the warmest and most humid conditions, whereas Natterer's bat hibernated in the coldest and driest conditions. Hibernacula were at their coldest in mid-season and became warmer towards the end of the season. The results suggest that bats made an active choice of colder hibernation temperatures at the seasons end. They minimised the negative effects of hibernation early in the hibernation season by hibernating in warmer locations and energy expenditure late in the hibernation season by hibernating in colder locations. The use of foraging habitats was studied in northern and southern Finland. The northern bat used foraging sites opportunistically. Daubenton's bat foraged mainly in water habitats, whereas Brandt's/whiskered bats and the brown long-eared bat foraged mainly in forest habitats. In northern Finland, Daubenton's bats foraged almost exclusively on rivers and typically together with the northern bat. Daubenton's bats and Brandt's/whiskered bats were found only where there were lower ambient light levels. One of the most important things in the management of foraging areas for them is to keep them shady. Hibernacula in Finland typically housed few bats, suggesting that hibernation sites used by even a small number of bats are important. Bats typically used natural stone for hibernation suggesting that natural underground sites in rocks or cliffs or man-made underground sites built using natural stone are important for them. The results suggest that appropriate timing of surveys may vary according to the species and latitude.

Kuluttajuuden rakentuminen nuorten kertomuksissa

This study examines the narrative construction of consumerism in Finnish consumer culture in the early 21st century. The objects of the study are consumer life stories and essays on environmentally friendly consumption, written by 15-19-year-old high school students. Moreover, group discussions were used as additional research material. The data was gathered at five high schools in different areas of Finland. Young people's consumer narratives are interpreted through cultural stories and consumer ethos such as self-control, gratification and green consumerism. The narrative research approach is used to analyse what types of consumer positions these young people construct in stories on their own consumer history, and what kinds of ideas and thought patterns they construct on green consumerism. The study creates a multifaceted image of young people as agents in consumer society. They construct archetypical stories of wastrels and scrooges, as well as prudent and environmentally friendly consumers. Consumption and expenditure are however mostly a continuous battle between self-control and giving in to gratification. This reality is illustrated among other things by clever expressions invented by young people, such as Carefree Pennywise, Prudent Hedonist and Wasteful Scrooge. In their narratives, young people also analyse the usefulness - or uselessness - of their decisions on consumption, as well as develop themselves into controlling and sensible consumers. This kind of virtuous consumer allows him/herself the joy and the gratification of consumption, as long as these are "kept in check". One's view of expenditure and consumption is not permanent. Consumerism may alter with time. A wastrel may grow up to be a young person in control of their desires, or a thrifty child may awaken to the pleasures of consumption in their teens. Consumerism may also be polyphonic: it may simultaneously - and even uncomplicatedly - be constructed upon the discourses of wastefulness, prudence, gratification and green consumerism. Young people allow for gratification to form a part of green consumerism, too: it is not simply restrictive self-denial. They also see many hurdles in the way of green consumerism, such as the elevated price of ecological products, and the difficulties of green consumer practices. The stories also show the gender division in green consumerism. For young men, ecological considerations offer elements for the construction of consumerism only on the very rare occasion, whereas striving for day-to-day green practices is typical for young women.

Determinants of institutional care at older ages in Finland

Väitöskirjassa selvitettiin ikäihmisten laitoshoitoon siirtymisen todennäköisyyttä ja sen taustoja kansainvälisesti ainutlaatuisen rekisteriaineiston avulla. Selvitettäviä asioita olivat eri sairauksien, sosioekonomisten tekijöiden, puolison olemassaolon ja leskeksi jäämisen yhteys laitoshoitoon siirtymiseen yli 65-vuotiailla suomalaisilla. Tutkimuksessa havaittiin, että dementia, Parkinsonin tauti, aivohalvaus, masennusoireet ja muut mielenterveysongelmat, lonkkamurtuma sekä diabetes lisäsivät ikäihmisten todennäköisyyttä siirtyä laitoshoitoon yli 50 prosentilla, kun muut sairaudet ja sosiodemografiset tekijät oli otettu huomioon. Korkeat tulot vähensivät laitoshoidon todennäköisyyttä, kun taas puutteellinen asuminen (ilman peseytymistiloja tai keskus- tai sähkölämmitystä) sekä erittäin puutteellinen asuminen (ilman lämmintä vettä, vesijohtoa, viemäriä tai vesivessaa) lisäsivät todennäkösyyttä, kun muut sosiodemografiset tekijät, sairaudet ja asuinalue oli huomioitu. Kerrostalon hissittömyys ei ollut yhteydessä laitoshoidon todennäköisyyteen. Todennäköisyys siirtyä laitoshoitoon oli jostain syystä korkeampaa niillä ikäihmisillä, jotka asuivat vuokralla ja matalampaa omakotitalossa asuvilla ja niillä, joilla oli auto. Puolison olemassaolo vähensi ja leskeksi jääminen lisäsi laitoshoidon todennäköisyyttä huomattavasti. Todennäköisyys oli erityisen suuri, yli kolminkertainen, kun puolison kuolemasta oli kulunut enintään kuukausi verrattuna niihin, joiden puoliso oli elossa. Todennäköisyys laski, kun puolison kuolemasta kului aikaa. Miesten ja naisten tulokset olivat samansuuntaisia. Korkeat tulot tai koulutus eivät suojanneet riskiltä joutua laitoshoitoon puolison kuoltua. Puolison kuolema näyttää lisäävän hoidon tarvetta, kun kotona ei ole enää puolisoa tukemassa ja huolehtimassa kodin askareista. Laitoshoidon tarve vähenee, jos ja kun lesket ajan kuluessa oppivat elämään yksin. Toisaalta tutkimustulokset saattavat viitata myös siihen, että kaikkein huonokuntoisimmat lesket, jotka eivät pärjää yksin asuessaan, siirtyvät laitoshoitoon hyvin nopeasti puolison kuoltua. Tutkimuksessa oli mukana yhteensä yli 280 000 yli 65-vuotiasta henkilöä, joiden pitkäaikaiseen laitoshoitoon siirtymistä seurattiin tammikuusta 1998 syyskuuhun 2003. Laitoshoidoksi määriteltiin terveyskeskuksissa, sairaaloissa ja vanhainkodeissa tai vastaavissa yksiköissä tapahtuva pitkäaikainen hoito, joka kesti yli 90 vuorokautta tai oli vahvistettu pitkäaikaishoidon päätöksellä. Tutkimuksessa käytetty aineisto koottiin väestörekistereistä, sosiaali- ja terveydenhuollon rekistereistä ja lääkerekistereistä.

Technology-related peso problems in stock returns

Although empirical evidence suggests the contrary, many asset pricing models assume stock returns to be symmetrically distributed. In this paper it is argued that the occurrence of negative jumps in a firm's future earnings and, consequently, in its stock price, is positively related to the level of network externalities in the firm's product market. If the ex post frequency of these negative jumps in a sample does not equal the ex ante assessed probability of occurrence, the sample is subject to a peso problem. The hypothesis is tested for by regressing the skewness coefficient of a firm’s realised stock return distribution on the firm’s R&D intensity, i.e. the ratio of the firm’s research and development expenditure to its net sales. The empirical results support the technology-related peso problem hypothesis. In samples subject to such a peso problem, the returns are biased up and the variance is biased down.

PERFECT Stroke : PERFormance, Effectiveness, and Costs of treatment episodes in Stroke

Stroke is a major cause of death and disability, incurs significant costs to healthcare systems, and inflicts severe burden to the whole society. Stroke care in Finland has been described in several population-based studies between 1967 and 1998, but not since. In the PERFECT Stroke study presented here, a system for monitoring the Performance, Effectiveness, and Costs of Treatment episodes in Stroke was developed in Finland. Existing nationwide administrative registries were linked at individual patient level with personal identification numbers to depict whole episodes of care, from acute stroke, through rehabilitation, until the patients went home, were admitted to permanent institutional care, or died. For comparisons in time and between providers, patient case-mix was adjusted for. The PERFECT Stroke database includes 104 899 first-ever stroke patients over the years 1999 to 2008, of whom 79% had ischemic stroke (IS), 14% intracerebral hemorrhage (ICH), and 7% subarachnoid hemorrhage (SAH). A 18% decrease in the age and sex adjusted incidence of stroke was observed over the study period, 1.8% improvement annually. All-cause 1-year case-fatality rate improved from 28.6% to 24.6%, or 0.5% annually. The expected median lifetime after stroke increased by 2 years for IS patients, to 7 years and 7 months, and by 1 year for ICH patients, to 4 years 5 months. No change could be seen in median SAH patient survival, >10 years. Stroke prevalence was 82 000, 1.5% of total population of Finland, in 2008. Modern stroke center care was shown to be associated with a decrease in both death and risk of institutional care of stroke patients. Number needed to treat to prevent these poor outcomes at one year from stroke was 32 (95% confidence intervals 26 to 42). Despite improvements over the study period, more than a third of Finnish stroke patients did not have access to stroke center care. The mean first-year healthcare cost of a stroke patient was ~20 000 , and among survivors ~10 000 annually thereafter. Only part of this cost was incurred by stroke, as the same patients cost ~5000 over the year prior to stroke. Total lifetime costs after first-ever stroke were ~85 000 . A total of 1.1 Billion , 7% of all healthcare expenditure, is used in the treatment of stroke patients annually. Despite a rapidly aging population, the number of new stroke patients is decreasing, and the patients are more likely to survive. This is explained in part by stroke center care, which is effective, and should be made available for all stroke patients. It is possible, in a suitable setting with high-quality administrative registries and a common identifier, to avoid the huge workload and associated costs of setting up a conventional stroke registry, and still acquire a fairly comprehensive dataset on stroke care and outcome.

Do Households Have Rational Expectations on Future Consumption? Evidence from the Finnish Consumer Survey

Ever since its initial introduction some fifty years ago, the rational expectations paradigm has dominated the way economic theory handles uncertainty. The main assertion made by John F. Muth (1961), seen by many as the father of the paradigm, is that expectations of rational economic agents should essentially be equal to the predictions of relevant economic theory, since rational agents should use information available to them in an optimal way. This assumption often has important consequences on the results and interpretations of the models where it is applied. Although the rational expectations assumption can be applied to virtually any economic theory, the focus in this thesis is on macroeconomic theories of consumption, especially the Rational Expectations–Permanent Income Hypothesis proposed by Robert E. Hall in 1978. The much-debated theory suggests that, assuming that agents have rational expectations on their future income, consumption decisions should follow a random walk, and the best forecast of future consumption level is the current consumption level. Then, changes in consumption are unforecastable. This thesis constructs an empirical test for the Rational Expectations–Permanent Income Hypothesis using Finnish Consumer Survey data as well as various Finnish macroeconomic data. The data sample covers the years 1995–2010. Consumer survey data may be interpreted to directly represent household expectations, which makes it an interesting tool for this particular test. The variable to be predicted is the growth of total household consumption expenditure. The main empirical result is that the Consumer Confidence Index (CCI), a balance figure computed from the most important consumer survey responses, does have statistically significant predictive power over the change in total consumption expenditure. The history of consumption expenditure growth itself, however, fails to predict its own future values. This indicates that the CCI contains some information that the history of consumption decisions does not, and that the consumption decisions are not optimal in the theoretical context. However, when conditioned on various macroeconomic variables, the CCI loses its predictive ability. This finding suggests that the index is merely a (partial) summary of macroeconomic information, and does not contain any significant private information on consumption intentions of households not directly deductible from the objective economic variables. In conclusion, the Rational Expectations–Permanent Income Hypothesis is strongly rejected by the empirical results in this thesis. This result is in accordance with most earlier studies conducted on the topic.