Who has really paid for the Reconstruction of East Germany? Expected and Realized Returns on Real Estate Investments in East and West Germany in the 1990s

We evaluate the profitability of investments in residential property in Germany after unification with a focus on the comparison of East and West Germany. Calculations are carried out for (1) the after-tax return an investor might have expected at the beginning of the 1990s, and (2) the after-tax return that has been realized ten years after. We compare a set of statistical data for investments in fifty major cities by using complete financial budgeting. The results show that tax subsidies could not always protect investors from losing money, but they have boosted realized returns after tax considerably. Therefore, it was indeed the taxpayers, not the investors, who have borne the cost of reconstructing East Germany.

Economic Loan Loss Provision and Expected Loss

The intention of a loan loss provision is the anticipation of the loan's expected losses by adjusting the book value of the loan. Furthermore, this loan loss provision has to be compared to the expected loss according to Basel II and, in the case of a difference, liable equity has to be adjusted. This however assumes that the loan loss provision and the expected loss are based on a similar economic rationale, which is only valid conditionally in current loan loss provisioning methods according to IFRS. Therefore, differences between loan loss provisions and expected losses should only result from different approaches regarding the parameter estimation within each model and not due to different assumptions regarding the outcome of the model. The provisioning and accounting model developed in this paper overcomes the before-mentioned shortcomings and is consistent with an economic rationale of expected losses. Additionally, this model is based on a close-to-market valuation of the loan that is in favor of the basic idea of IFRS. Suggestions for changes in current accounting and capital requirement rules are provided.

Using Dynamic Programming Decomposition for Revenue Management with Opaque Products

Opaque products enable service providers to hide specific characteristics of their service fulfillment from the customer until after purchase. Prominent examples include internet-based service providers selling airline tickets without defining details, such as departure time or operating airline, until the booking has been made. Owing to the resulting flexibility in resource utilization, the traditional revenue management process needs to be modified. In this paper, we extend dynamic programming decomposition techniques widely used for traditional revenue management to develop an intuitive capacity control approach that allows for the incorporation of opaque products. In a simulation study, we show that the developed approach significantly outperforms other well-known capacity control approaches adapted to the opaque product setting. Based on the approach, we also provide computational examples of how the share of opaque products as well as the degree of opacity can influence the results.

Educational Expansion and Persistent Inequalities of Education: Utilizing the Subjective Expected Utility Theory to Explain the Increasing Participation Rates in Upper Secondary School in the Federal Republic Of Germany

This investigation attempts to answer the question why more and more parents have chosen the Gymnasium for their children's secondary school education in post‐war West Germany. Based on the theory of subjective expected utility, the crucial mechanisms of parental educational decisions have been emphasized. From this perspective it is assumed that increasing educational motivation coupled with changes in the subjective evaluation of the cost–benefit of education were important conditions for an increasing participation in upper secondary schools. These were, however, in turn, the result of educational expansion. The empirical analyses for three time‐periods in the 1960s, 1970s, and 1980s confirm these assumptions to a large degree. Additionally, empirical evidence was found to suggest that in addition to the intentions of parents and the educational career of their children, structural moments of educational expansion and their own inertia played an important role in the pupils' transition from one educational level to the next. Finally, evidence was found that persistent class‐specific educational inequality stems from a constant balance in the relative cost–benefit advantages between social classes as well as from an increasing difference of primary origin effect between social classes in the realization of their educational choice.

Parentage analysis with genetic markers in natural populations. I. The expected proportion of offspring with unambiguous paternity.

Recent studies indicate that polymorphic genetic markers are potentially helpful in resolving genealogical relationships among individuals in a natural population. Genetic data provide opportunities for paternity exclusion when genotypic incompatibilities are observed among individuals, and the present investigation examines the resolving power of genetic markers in unambiguous positive determination of paternity. Under the assumption that the mother for each offspring in a population is unambiguously known, an analytical expression for the fraction of males excluded from paternity is derived for the case where males and females may be derived from two different gene pools. This theoretical formulation can also be used to predict the fraction of births for each of which all but one male can be excluded from paternity. We show that even when the average probability of exclusion approaches unity, a substantial fraction of births yield equivocal mother-father-offspring determinations. The number of loci needed to increase the frequency of unambiguous determinations to a high level is beyond the scope of current electrophoretic studies in most species. Applications of this theory to electrophoretic data on Chamaelirium luteum (L.) shows that in 2255 offspring derived from 273 males and 70 females, only 57 triplets could be unequivocally determined with eight polymorphic protein loci, even though the average combined exclusionary power of these loci was 73%. The distribution of potentially compatible male parents, based on multilocus genotypes, was reasonably well predicted from the allele frequency data available for these loci. We demonstrate that genetic paternity analysis in natural populations cannot be reliably based on exclusionary principles alone. In order to measure the reproductive contributions of individuals in natural populations, more elaborate likelihood principles must be deployed.

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Expected impact of applying new 2013 AHA/ACC cholesterol guidelines criteria on the recommended lipid target achievement after acute coronary syndromes.

BACKGROUND 2013 AHA/ACC guidelines on the treatment of cholesterol advised to tailor high-intensity statin after ACS, while previous ATP-III recommended titration of statin to reach low-density lipoprotein cholesterol (LDL-C) targets. We simulated the impact of this change of paradigm on the achievement of recommended targets. METHODS Among a prospective cohort study of consecutive patients hospitalized for ACS from 2009 to 2012 at four Swiss university hospitals, we analyzed 1602 patients who survived one year after recruitment. Targets based on the previous guidelines approach was defined as (1) achievement of LDL-C target < 1.8 mmol/l, (2) reduction of LDL-C ≥ 50% or (3) intensification of statin in patients who did not reach LDL-C targets. Targets based on the 2013 AHA/ACC guidelines approach was defined as the maximization of statin therapy at high-intensity in patients aged ≤75 years and moderate- or high-intensity statin in patients >75 years. RESULTS 1578 (99%) patients were prescribed statin at discharge, with 1120 (70%) at high-intensity. 1507 patients (94%) reported taking statin at one year, with 909 (57%) at high-intensity. Among 482 patients discharged with sub-maximal statin, intensification of statin was only observed in 109 patients (23%). 773 (47%) patients reached the previous LDL-C targets, while 1014 (63%) reached the 2013 AHA/ACC guidelines targetsone year after ACS (p value < 0.001). CONCLUSION The application of the new 2013 AHA/ACC guidelines criteria would substantially increase the proportion of patients achieving recommended lipid targets one year after ACS. Clinical trial number, NCT01075868.

Expected Shortfall is jointly elicitable with Value at Risk - Implications for backtesting

In this note, we comment on the relevance of elicitability for backtesting risk measure estimates. In particular, we propose the use of Diebold-Mariano tests, and show how they can be implemented for Expected Shortfall (ES), based on the recent result of Fissler and Ziegel (2015) that ES is jointly elicitable with Value at Risk.

Differentiating the Multipoint Expected Improvement for Optimal Batch Design

This work deals with parallel optimization of expensive objective functions which are modelled as sample realizations of Gaussian processes. The study is formalized as a Bayesian optimization problem, or continuous multi-armed bandit problem, where a batch of q > 0 arms is pulled in parallel at each iteration. Several algorithms have been developed for choosing batches by trading off exploitation and exploration. As of today, the maximum Expected Improvement (EI) and Upper Confidence Bound (UCB) selection rules appear as the most prominent approaches for batch selection. Here, we build upon recent work on the multipoint Expected Improvement criterion, for which an analytic expansion relying on Tallis’ formula was recently established. The computational burden of this selection rule being still an issue in application, we derive a closed-form expression for the gradient of the multipoint Expected Improvement, which aims at facilitating its maximization using gradient-based ascent algorithms. Substantial computational savings are shown in application. In addition, our algorithms are tested numerically and compared to state-of-the-art UCB-based batchsequential algorithms. Combining starting designs relying on UCB with gradient-based EI local optimization finally appears as a sound option for batch design in distributed Gaussian Process optimization.

Costly Revenue-Raising and the Case for Favoring Import-Competing Industries

A standard finding in the political economy of trade policy literature is that we should expect export-oriented industries to attract more assistance than import-competing industries. In reality, however, trade policy is heavily biased toward supporting import industries. This paper shows within a standard protection for sale framework, how the costliness of raising revenue via taxation makes trade subsidies less desirable and trade taxes more desirable. The model is then estimated and its predictions tested using U.S. tariff data. An empirical estimate of the costliness of revenue-raising is also obtained.

Asymmetric Information, Tax Evasion and Alternative Instruments of Government Revenue

Using a pure-exchange overlapping generations model, characterized with tax evasion and information asymmetry between the government (the social planner) and the financial intermediaries, we try and seek for the optimal tax and seigniorage plans, derived from the welfare maximizing objective of the social planner. We show that irrespective of whether the economy is characterized by tax evasion, or asymmetric information, a benevolent social planner, maximizing welfare and simultaneously financing the budget constraint, should optimally rely on explicit rather than implicit taxation.

MEASURING THE EFFECT OF ILLNESS ON THE EXPECTED REMAINING SERVICE TIME FOR THE ACTIVE DUTY ARMY: A LIFE TABLE APPROACH

A life table methodology was developed which estimates the expected remaining Army service time and the expected remaining Army sick time by years of service for the United States Army population. A measure of illness impact was defined as the ratio of expected remaining Army sick time to the expected remaining Army service time. The variances of the resulting estimators were developed on the basis of current data. The theory of partial and complete competing risks was considered for each type of decrement (death, administrative separation, and medical separation) and for the causes of sick time.^ The methodology was applied to world-wide U.S. Army data for calendar year 1978. A total of 669,493 enlisted personnel and 97,704 officers were reported on active duty as of 30 September 1978. During calendar year 1978, the Army Medical Department reported 114,647 inpatient discharges and 1,767,146 sick days. Although the methodology is completely general with respect to the definition of sick time, only sick time associated with an inpatient episode was considered in this study.^ Since the temporal measure was years of Army service, an age-adjusting process was applied to the life tables for comparative purposes. Analyses were conducted by rank (enlisted and officer), race and sex, and were based on the ratio of expected remaining Army sick time to expected remaining Army service time. Seventeen major diagnostic groups, classified by the Eighth Revision, International Classification of Diseases, Adapted for Use In The United States, were ranked according to their cumulative (across years of service) contribution to expected remaining sick time.^ The study results indicated that enlisted personnel tend to have more expected hospital-associated sick time relative to their expected Army service time than officers. Non-white officers generally have more expected sick time relative to their expected Army service time than white officers. This racial differential was not supported within the enlisted population. Females tend to have more expected sick time relative to their expected Army service time than males. This tendency remained after diagnostic groups 580-629 (Genitourinary System) and 630-678 (Pregnancy and Childbirth) were removed. Problems associated with the circulatory system, digestive system and musculoskeletal system were among the three leading causes of cumulative sick time across years of service. ^

Comparing Campus Discipline Rates: A Multivariate Approach for Identifying Schools with Significantly Different than Expected Exclusionary Discipline Rates

Campus behavior management is important for ensuring classroom order and promoting positive academic outcomes. Previous studies have shown the importance of individual student and campus personnel characteristics and campus context for explaining campus discipline rates (e.g., rates of suspension and expulsion). Assessing campus discipline rates, while controlling for these individual and campus characteristics, is important for the monitoring, evaluation, and intervention role of policymakers as well as state and federal level education agencies. Systems or metrics exist that measure other student outcomes (i.e., academic performance) with controls for individual and campus characteristics, but none exist that monitor these differences for discipline rates across campuses. In this paper, we use a multivariate model to analyze a longitudinal, statewide dataset for all secondary students in Texas from 2000 to 2008 in order to examine how campus discipline rates differ across schools with statistically similar students, teachers, and campus characteristics. The findings are important for understanding that some schools with similar characteristics have significantly different exclusionary discipline rates, and they are important for informing policy and agency level decision-making. The methodology described can easily be used by monitoring agencies as well as local school districts.

An analysis of the revenue policy -making process of the Texas Legislature

The purpose of this dissertation was to develop a conceptual framework which can be used to account for policy decisions made by the House Ways and Means Committee (HW&MC) of the Texas House of Representatives. This analysis will examine the actions of the committee over a ten-year period with the goal of explaining and predicting the success of failure of certain efforts to raise revenue.^ The basis framework for modelling the revenue decision-making process includes three major components--the decision alternatives, the external factors and two competing contingency theories. The decision alternatives encompass the particular options available to increase tax revenue. The options were classified as non-innovative or innovative. The non-innovative options included the sales, franchise, property and severance taxes. The innovative options were principally the personal and corporate income taxes.^ The external factors included political and economic constraints that affected the actions of the HW&MC. Several key political constraints on committee decision-making were addressed--including public attitudes, interest groups, political party strength and tradition and precedents. The economic constraints that affected revenue decisions included court mandates, federal mandates and the fiscal condition of the nation and the state.^ The third component of the revenue decision-making framework included two alternative contingency theories. The first alternative theory postulated that the committee structure, including the individual member roles and the overall committee style, resulted in distinctive revenue decisions. This theory will be favored if evidence points to the committee acting autonomously with less concern for the policies of the Speaker of the House. The Speaker assignment theory, postulated that the assignment of committee members shaped or changed the course of committee decision-making. This theory will be favored if there was evidence that the committee was strictly a vehicle for the Speaker to institute his preferred tax policies.^ The ultimate goal of this analysis is to develop an explanation for legislative decision-making about tax policy. This explanation will be based on the linkages across various tax options, political and economic constraints, member roles and committee style and the patterns of committee assignment. ^