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- ItemOn the algorithmic solution of optimization problems subject to probabilistic/robust (probust) constraints(Berlin ; Heidelberg : Springer, 2021) Berthold, Holger; Heitsch, Holger; Henrion, René; Schwientek, JanWe present an adaptive grid refinement algorithm to solve probabilistic optimization problems with infinitely many random constraints. Using a bilevel approach, we iteratively aggregate inequalities that provide most information not in a geometric but in a probabilistic sense. This conceptual idea, for which a convergence proof is provided, is then adapted to an implementable algorithm. The efficiency of our approach when compared to naive methods based on uniform grid refinement is illustrated for a numerical test example as well as for a water reservoir problem with joint probabilistic filling level constraints.
- ItemWhen redistribution makes personalized pricing of externalities useless(Oxford : Wiley-Blackwell, 2021) Fleurbaey, Marc; Kornek, UlrikeWe consider a standard optimal taxation framework in which consumers' preferences are separable in consumption and labor and identical over consumption, but are affected by consumption externalities. For every nonlinear, income-dependent pricing of goods there is a linear pricing scheme, combined with an adjusted income tax schedule, that leaves all consumers equally well-off and weakly increases the government's budget. The result depends on whether a linear pricing scheme exists that keeps the aggregate amount of consumption at its initial level observed under nonlinear pricing. We provide sufficient conditions for the assumption to hold. If adjusting the income tax rate is not available, personalized prices for an externality can enhance social welfare if they are redistributive, that is, favor consumers with a larger marginal social value of income.
- ItemFiscal Consolidation Programs and Income Inequality(Malden, Mass. [u.a.] : Wiley-Blackwell, 2020) Brinca, Pedro; Ferreira, Miguel H.; Franco, Francesco; Holter, Hans A.; Malafry, LaurenceWe document a strong empirical relationship between higher income inequality and stronger recessive impacts of fiscal consolidation episodes across time and space. To explain this finding, we develop a life-cycle economy with uninsurable income risk. We calibrate our model to match key characteristics of several European economies, including inequality and fiscal structures, and study the effects of fiscal consolidation programs. In our model, higher income risk induces precautionary savings behavior, which decreases the proportion of credit-constrained agents in the economy. These agents have less elastic labor supply responses to fiscal consolidations, which explain the correlation with inequality in the data.
- ItemMethane emissions from the storage of liquid dairy manure: Influences of season, temperature and storage duration(Amsterdam [u.a.] : Elsevier, 2021) Cárdenas, Aura; Ammon, Christian; Schumacher, Britt; Stinner, Walter; Herrmann, Christiane; Schneider, Marcel; Weinrich, Sören; Fischer, Peter; Amon, Thomas; Amon, BarbaraMethane emissions from livestock manure are primary contributors to GHG emissions from agriculture and options for their mitigation must be found. This paper presents the results of a study on methane emissions from stored liquid dairy cow manure during summer and winter storage periods. Manure from the summer and winter season was stored under controlled conditions in barrels at ambient temperature to simulate manure storage conditions. Methane emissions from the manure samples from the winter season were measured in two time periods: 0 to 69 and 0 to 139 days. For the summer storage period, the experiments covered four time periods: from 0 to 70, 0 to 138, 0 to 209, and 0 to 279 continuous days, with probing every 10 weeks. Additionally, at the end of all storage experiments, samples were placed into eudiometer batch digesters, and their methane emissions were measured at 20 °C for another 60 days to investigate the potential effect of the aging of the liquid manure on its methane emissions. The experiment showed that the methane emissions from manure stored in summer were considerably higher than those from manure stored in winter. CH4 production started after approximately one month, reaching values of 0.061 kg CH4 kg−1 Volatile Solid (VS) and achieving high total emissions of 0.148 kg CH4 kg−1 VS (40 weeks). In winter, the highest emissions level was 0.0011 kg CH4 kg−1 VS (20 weeks). The outcomes of these experimental measurements can be used to suggest strategies for mitigating methane emissions from manure storage.
- ItemA network of networks perspective on global trade(San Francisco, CA : Public Library of Science (PLoS), 2015) Maluck, J.; Donner, R.V.
- ItemOptimal carbon taxation and horizontal equity: A welfare-theoretic approach with application to German household data(Amsterdam : Elsevier, 2022) Hänsel, Martin C.; Franks, Max; Kalkuhl, Matthias; Edenhofer, OttmarWe develop a model of optimal taxation and redistribution under an ambitious climate target. We take into account vertical income differences, but also explicitly capture horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon and labor taxes, transfers and energy subsidies, we investigate analytically how vertical and horizontal inequality is considered in the welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal and show that redistribution of carbon tax revenues via household-specific transfers is the first-best policy. Under plausible assumptions on inequality aversion, transfers to energy-intensive households should be about five times higher than transfers to energy-efficient households. Equal per-capita transfers do not require to observe households’ efficiency type, but increase equity-weighted mitigation costs by around 5 percent compared to the first-best. Mitigation costs increase by less, if the government can implement a uniform clean energy subsidy or household-specific tax-subsidy schemes on energy consumption and labor income that target heterogeneous energy efficiencies. Horizontal equity concerns may therefore constitute a new second-best rationale for clean energy policies or differentiated energy taxes.
- ItemThe impact of climate conditions on economic production. Evidence from a global panel of regions(Amsterdam [u.a.] : Elsevier, 2020) Kalkuhl, Matthias; Wenz, LeonieWe present a novel data set of subnational economic output, Gross Regional Product (GRP), for more than 1500 regions in 77 countries that allows us to empirically estimate historic climate impacts at different time scales. Employing annual panel models, long-difference regressions and cross-sectional regressions, we identify effects on productivity levels and productivity growth. We do not find evidence for permanent growth rate impacts but we find robust evidence that temperature affects productivity levels considerably. An increase in global mean surface temperature by about 3.5°C until the end of the century would reduce global output by 7–14% in 2100, with even higher damages in tropical and poor regions. Updating the DICE damage function with our estimates suggests that the social cost of carbon from temperature-induced productivity losses is on the order of 73–142$/tCO2 in 2020, rising to 92–181$/tCO2 in 2030. These numbers exclude non-market damages and damages from extreme weather events or sea-level rise. © 2020 The Authors
- ItemLeveraging Artificial Intelligence in Marketing for Social Good—An Ethical Perspective(Dordrecht : Springer, 2021) Hermann, ErikArtificial intelligence (AI) is (re)shaping strategy, activities, interactions, and relationships in business and specifically in marketing. The drawback of the substantial opportunities AI systems and applications (will) provide in marketing are ethical controversies. Building on the literature on AI ethics, the authors systematically scrutinize the ethical challenges of deploying AI in marketing from a multi-stakeholder perspective. By revealing interdependencies and tensions between ethical principles, the authors shed light on the applicability of a purely principled, deontological approach to AI ethics in marketing. To reconcile some of these tensions and account for the AI-for-social-good perspective, the authors make suggestions of how AI in marketing can be leveraged to promote societal and environmental well-being.
- ItemA regularity structure for rough volatility(Oxford [u.a.] : Wiley-Blackwell, 2019) Bayer, Christian; Friz, Peter K.; Gassiat, Paul; Martin, Jorg; Stemper, BenjaminA new paradigm has emerged recently in financial modeling: rough (stochastic) volatility. First observed by Gatheral et al. in high-frequency data, subsequently derived within market microstructure models, rough volatility captures parsimoniously key-stylized facts of the entire implied volatility surface, including extreme skews (as observed earlier by Alòs et al.) that were thought to be outside the scope of stochastic volatility models. On the mathematical side, Markovianity and, partially, semimartingality are lost. In this paper, we show that Hairer's regularity structures, a major extension of rough path theory, which caused a revolution in the field of stochastic partial differential equations, also provide a new and powerful tool to analyze rough volatility models.
- ItemThe social cost of carbon and inequality: When local redistribution shapes global carbon prices(Amsterdam [u.a.] : Elsevier, 2021) Kornek, Ulrike; Klenert, David; Edenhofer, Ottmar; Fleurbaey, MarcThe social cost of carbon is a central metric for optimal carbon prices. Previous literature shows that inequality significantly influences the social cost of carbon, but mostly omits heterogeneity below the national level. We present an optimal taxation model of the social cost of carbon that accounts for inequality between and within countries. We find that climate and distributional policy can generally not be separated. If only one country does not compensate low-income households for disproportionate damages, the social cost of carbon tends to increase globally. Optimal carbon prices remain roughly unchanged if national redistribution leaves inequality between households unaffected by climate change and if the utility of households is approximately logarithmic in consumption.