5 July 2017
In cooperation with UZH, IPE has successfully completed a multi-year pilot project for SUISA. The primary objective of the project was to create a performance-linked fair distribution for recorded music royalties.
The aim of the project team was to develop a statistical procedure to construct a representative sample of songs played in clubs throughout Switzerland. There are more than 500 clubs in Switzerland playing a wide variety of music styles. One of the continuing challenges for royalty compensation in the Swiss language regions, and its diverse club-music styles, is to ascertain an effective ‘universal playlist’ in a representative fashion.
To this end, the team devised a scientific “music monitoring” technique, utilizing the recordings of so-called “hit boxes” (devices for music recognition similar to Shazam), which were carried out and evaluated in Swiss clubs by the French contractor Yacast according to our specifications. To ensure representativeness, modern statistical methods were used to determine optimal locations for these hit boxes and to check these locations on a regular basis.
“This project is an example of how applied statistics creates fairness and, at the same time, lives up to the scientific principle,” said project leader Professor Michael Wolf, a statistician at the University of Zurich and senior adviser at IPE.
The Swiss Federal Institute of Intellectual Property (“IGE”), who is responsible for the supervision of SUISA, has already approved our procedure and the underlying statistical methodology. The first compensation payments based on our work were distributed to the music copyright owners during the middle of 2017.
1 February 2017
The new accounting standard IFRS 9 will supersede the current IAS 39 standard from January 2018 on. Financial institutions need to make considerable adjustments in terms of their risk provisions. The current standard for measuring and recognizing risk provisions uses an 'incurred loss model', that is, losses are only accounted for when they are realized. Contrarily, the upcoming accounting standard will require risk provisions be based on an 'expected credit loss model', that is, the future expected loss is accounted for.
The 'expected credit loss model' has a genuinely new multi-year focus with regard to the risk parameters PD (probability of default), LGD (loss given default) and EAD (exposure at default). This new approach differs markedly from the prior single-year perspective of the regulator.
The IPE project team developed a multi-year model for the parameters LGD and EAD for W&W. IPE also provided valuable insights regarding the multi-year model for the PD.
7 to 8 November 2016
On the 7th and 8th of November 2016, the Federal Ministry for Economics and Energy (BMWi) held a networking conference for electric mobility at the Scandic Hotel in Berlin. The parliamentary state secretary at the BMWi, Uwe Beckmeyer, opened the conference. The aim of the conference was to provide electric mobility professionals from the business, science, and political sectors a platform to exchange ideas and grow their networks.
At the two-day conference, approximately 400 experts formed multiple subject panels to discuss the current and future challenges in seven fields of action: Electric mobility as a building block of the energy transition; Battery and cell manufacturing at the business location Germany: Energy storage 'Made in Germany'; New automobile concepts: Electric mobility of the next generation; The powertrain: The new centerpiece of the car; Commercial vehicles as catalyst for electric mobility; The future of charging: Safe, accessible, fast; and Digitization in the fabrication of electric vehicles.
On invitation by the BMWi, the IPE research Director Professor Ashok Kaul, participated in the central panel discussion, “New mobility - Challenges for Industry and politics”. Moderated by journalist Conny Czymoch, the other members of the panel were: Professor Achim Kampker (Founder & Chair PEM of the RWTH Aachen, Managing Director of Streetscooter GmbH, and Division Manager for e-mobility at the Deutsche Post DHL); Professor Barbara Lenz (DLR, Institute of Traffic Research) and Alexander Mankowsky (Futurologist, Daimler AG).
19 September 2016
The EU has set itself a goal of successively reducing greenhouse gas emissions until 2050. The emission of CO2 is by far the most consequential man-made greenhouse gas. Road traffic alone is responsible for 20 to 25 percent of CO2 emissions in Europe, for about half of which passenger cars are responsible. Therefore, the EU has set binding and increasingly tougher emission reduction goals for all new passenger car registrations over the last 10 years. For example, the average goal for passenger car registration in 2015 was 130 grams of CO2 per kilometer (g/km), which was already reached during 2014 (assuming an average emission of 159 g/km in 2007). The CO2 goal for 2021 is now set at 95 g/km. The target path for passenger car CO2 emissions for 2025 and 2030 has yet to be decided and is currently the subject of contentious debate. This short study quantifies the economic effects of alternative CO2 regulation paths on the European automobile sector until 2030. The basis of our analysis is a common economic production model that depicts the production factors labor and capital. The aim of this study is to estimate the EU-wide job losses in the European automobile market that can be attributed to the CO2 regulation for passenger car registration from 2021 to 2030.
15 June 2016
The National Platform for Electric Mobility (NPE) commissioned the IPE Institute for Policy Evaluation in summer 2015 to determine the employment effects of a comprehensive support strategy for electric mobility in Germany.
Through comprehensive support of electric vehicles Germany can attain a dominant position as a lead supplier for electric mobility and by 2020, create more than 30,000 new, sustainable jobs (thereof approx. 25,000 in the automotive sector and about 6,500 jobs through infrastructure building and fiscal effects).
A comprehensive support and funding strategy will combine the following regulatory actions:
1. Continuation of the existing extensive support of R&D,
2. Supporting a rollout of the necessary charging infrastructure,
3. Direct support for purchases of electric vehicles.
Through comprehensive support, a dynamic increase in new registrations of electric vehicles and an export boom of electric vehicles manufactured in Germany can be achieved. Electric mobility in Germany still has a very promising future - due in part to the strength of the conventional passenger car sector and government support of R&D. One million electric vehicles on German roads by 2020 are most certainly possible.
17 March 2016
"The incidence of Cash for Clunkers: Evidence from the 2009 car scrappage scheme in Germany"
forthcoming in: International Tax And Public Finance
As a reaction to the 2007 financial crisis, governments all over the world launched car scrappage programs to stimulate their economies.
This paper, co-authored by IPE Research Director Ashok Kaul, investigates the German 2009 “Cash for Clunkers” program, focusing on the incidence of the premium. More precisely, the question is, how much of the EUR 2,500 buyer subsidy was captured by the demand side? The empirical analysis shows that the incidence of the subsidy varied strongly and significantly across car-price segments. Subsidized buyers of cheap cars paid only a little more than comparable buyers who did not receive the subsidy, indicating incidence levels slightly below 100%. For more expensive vehicles, subsidized buyers were granted large extra discounts on top of the government premium, translating into incidence levels way beyond 100%. Taken together, the results suggest that the positive effect for expensive cars more than compensated for the negative effect for small cars, leading to an estimated aggregate incidence of EUR 350 million).
Further information: http://link.springer.com/article/10.1007/s10797-016-9396-1
05 January 2016
A book, coauthored by IPE Research director Dr. Ashok Kaul, on the taxation of cross-border dividends and royalty payments in the state of source has just been published. The book is based on an export report commissioned by the German Federal Ministry of Finance.
This book examines, both legally and empirically, the taxation of cross-border dividends and royalty payments in the state of source. The authors develop guidelines on how corporate tax policy in Germany could respond to the fundamental challenges of international tax law and the increasingly significant tax-planning activities of multinational companies.
How to tax intercompany dividends and royalty payments
The recommendations with respect to intercompany dividends and royalty payments differ fundamentally. On the one hand, it seems advisable to provide withholding tax relief for intercompany dividends within double taxation agreements. On the other hand, measures should be considered that ensure a reasonable one-time taxation of royalty payments. To this end, a limit on the deduction of royalty payments appears preferable to a withholding tax on royalty payments. A key advantage of such approach is that it could be implemented unilaterally and flexibly. The authors argue that a limit on the deduction of royalty payments could be implemented in conformity with both German constitutional law and EU law.
01 December 2015
IPE Study: Three years of plain packaging for tobacco products in Australia - Have the expectations been met?
(Saarland, Germany) The IPE Institute for Policy Evaluation Saarland has conducted a study on the occasion of the third anniversary of plain packaging. In December 2012, the Australian Government implemented plain packaging for tobacco products in order to curb smoking. But three years later, governmental data and related research show that neither the rate of smoking, nor tobacco consumption have declined as a result of plain packaging.
The study was commissioned by Philip Morris International.
4 August 2015
Independent expert report regarding Prof. Wolf and Prof. Kaul working papers: no basis for Oxyromandie’s defamatory campaign
(Saarbrücken, Germany) The University of Zurich had asked the independent expert Prof. Ben Jann (University of Bern, Switzerland) to assess the allegations leveled against us. The independent expert report by Prof. Jann is now available. As is clear from the conclusions of the independent expert report, there was no basis for Oxyromandie’s defamatory campaign.
On the contrary, some of OxyRomandie’s claims and methods seem “entirely unclear” to the expert Prof. Jann. Accordingly, we hope that from now on Oxyromandie will refrain from its excessively aggressive rhetoric and personal attacks.
16 February 2015
Rhetoric trumps science?
(Saarbruecken, Germany) We – Prof. Kaul from the IPE Institute for Policy Evaluation Saarland & Department of Economics at Saarland University and Prof. Wolf from the Department of Economics at the University of Zurich – ask the anti-smoking organization OxyRomandie and its president Mr. Diethelm to stop their defamatory campaign against us and the University of Zurich.
12 February 2015
IPE Research on plain packaging in Australia: Critique by Swiss anti-smoking organization OxyRomandie and reply by Prof. Kaul and Prof. Wolf
The Swiss anti-smoking organization OxyRomandie has criticized recent research by IPE researchers Prof. Kaul (Saarland University) and Prof. Wolf (University of Zurich) in a letter to the rector of the University of Zurich (UZH). We subsequently document the critique (letter to the rector and annex to the letter) as well as the reply by Professors Kaul and Wolf.
Public reply of Professors Wolf and Kaul to the OxyRomandie criqtique - 11 February 2015:
OxyRomandie/Pascal Diethelm critique - 21 January 2015:
01 July 2014
Research Released on Smoking Prevalence in Australia Following Plain Packaging
(Saarland, Germany) Yesterday, two researchers from the IPE Institute for Policy Evaluation Saarland & Department of Economics at Saarland University and from the Department of Economics at the University of Zurich have released a paper entitled “The (Possible) Effect of Plain Packaging on Smoking Prevalence in Australia: A Trend Analysis” which was commissioned by Philip Morris International.
The experts conducted a statistical trend analysis of smoking prevalence among Australians aged 14+ between January 2001 and December 2013, with the objective of determining whether there was evidence for a plain packaging effect on smoking prevalence at any time during the 13 months from December 2012 through December 2013.
Download the complete media release:
30 June 2014
UZH Working Paper No. 165 by Ashok Kaul and Michael Wolf (2014):
The (Possible) Effect of Plain Packaging on Smoking Prevalence in Australia: A Trend Analysis
A stated objective of the Australian Plain Packaging Act 2011 is to reduce smoking prevalence. We use the Roy Morgan Single Source (Australia) data set over the time period January 2001 to December 2013 to analyze whether this goal has been achieved in the first year since the implementation. In particular, we carry out a statistical trend analysis to study the (possible) effect of plain packaging on smoking prevalence. Two informative analyses help to draw conclusions on the (actual) effect of plain packaging on smoking prevalence in Australia. First, we look at the year of data before plain packaging was introduced, which happened in December 2012. Second, we compute confidence intervals around the estimated treatment effects. Our main results can be summarized as follows. First, if a statistical significance level of 5% is required, then there is no evidence at all for a plain packaging effect on smoking prevalence. Second, if one is willing to accept a relatively low level of statistical significance (that is, 10%), then there is evidence for a very short-lived plain packaging effect on smoking prevalence, namely in December 2012 only (after which smoking prevalence is statistically indistinguishable from its pre-existing trend). A formal power analysis demonstrates that the power of our inference methods is remarkably high.
Plain packaging, smoking prevalence, treatment effect, trend analysis
C13, C22, H43, I18
07 April 2014
Link to the Chantler Review
Find below the link to the Independent Review into standardised packaging of tobacco (the "Chantler Review") prepared by Sir Cyril Chantler.
05 April 2014
Meeting between Ashok Kaul, Michael Wolf, and the Plain Packaging Review Team (of the "Chantler Review") on March 20, 2014
On March 20, 2014, Ashok Kaul and Michael Wolf met with the Plain Packaging Review Team to discuss their working paper with the title "The (Possible) Effect of Plain Packaging on the Smoking Prevalence of Minors in Australia: A Trend Analysis." The transcript of the meeting can be downloaded below.
March 28 2014
Reply by Ashok Kaul and Michael Wolf to the NHS choices comment
Reply to “Plain cigarette packaging doesn't work, says industry funded study“ by Ashok Kaul and Michael Wolf, March 28, 2014
Our recent study on the effects of the “Australian Plain Packaging Act 2011” has been criticized in a comment on NHS choices [available at: http://www.nhs.uk/news/2014/03March/Pages/Plain-fags-packs-dont-work-says-industry-funded-study.aspx]. Below we present replies to the most important issues raised in this comment.
While we always welcome other researchers’ comments on our work, we kindly ask them to carefully read our work first before publicly criticizing it. To start with, the NHS comment is titled “Plain cigarette packaging doesn’t work, says industry funded study”. This title is an incorrect summary of our results and therefore is misleading. Being experienced empirical researchers, we took care to point out that we “fail to find any evidence for an actual plain packaging effect”, which is not the same as claiming we find evidence for no plain packaging effect. In other words, the absence of evidence for an effect should not be misconstrued as evidence for no effect. Either the author(s) of the comment is/are not aware of this fundamental distinction or the study’s claim are deliberately inflated in order to question our credibility.
On a technical level, our study is not a cross-sectional analysis but a time-series analysis. In particular, there is a cross-section of data in each month condensed into a single number (namely observed prevalence); we then analyze the resulting univariate time series (that is, the sequence of monthly observed prevalence). In particular, we do not work with yearly but with monthly data.
The disclaimer that PMI was not given access to the data by us is standard; freedom of research has been guaranteed. The study is industry-funded but the methods are standard textbook methods; any sufficiently skilled researcher should be able to replicate the results.
The NHS article also questions the reliability because the study was not peer-reviewed; this, too, is standard in research because peer-review takes time and findings are typically communicated in working papers in order to allow for a methodological debate and to disseminate findings at an early stage. Data covering a whole year after plain packaging (including December 2013) have been available only since January 2014. We will be submitting our study to a peer-reviewed outlet in due time. Given the straightforward nature of the data and the statistical methodology, we do not expect changes to the basic findings during the reviewing process.
Finally, the NHS article questions the quality of the Roy Morgan Single Source data. We appreciate the suggestions regarding the definition of the variable “smoker” as well as the referencing to census data of prevalence rates. With respect to the data used, we want to point out that single source data are of exceptionally high quality: Its sample size is twice the size of the two major official data sets, namely about 50.000 interviews per year. (NDSHS and AHS rely on about 25,000 interviews per year and are both cross-sectional data sets themselves.) It is available on a monthly basis, allowing researchers to trace month-to-month changes rather than developments in increments of several years. Also, the data have already been used to analyze smoking behavior in Australia by renowned tobacco control researchers [see e.g. Siahpush, M., Wakefield, M. A., Spittal, M. J., Durkin, S. J., & Scollo, M. M. 2009. “Taxation reduces social disparities in adult smoking prevalence.” American journal of preventive medicine, 36(4), 285–291]. Overall, we believe we have used the best currently available data set to evaluate the Australian plain packaging experiment using statistical methods.
March 26 2014
NHS choices comment on the working paper "The (Possible) Effect of Plain Packaging on the Smoking Prevalence of Minors in Australia: A Trend Analysis"
UZH Working Paper No. 149 by Ashok Kaul and Michael Wolf (2014):
The (Possible) Effect of Plain Packaging on the Smoking Prevalence of Minors in Australia: A Trend Analysis
A key stated objective of the Australian Plain Packaging Act 2011 is to influence smoking prevalence, in particular of minors. We use the Roy Morgan Single Source (Australia) data set on minors, (that is, Australians aged 14 to 17 years) over the time period January 2001 to December 2013 to analyze whether there is evidence that this goal has been achieved. We carry out a statistical trend analysis to study the (possible) effect of plain packaging on smoking prevalence of minors in Australia. More specifically, we fit a linear time trend that explains well the fact that observed smoking prevalence has declined steadily over the last 13 years. Two informative analyses help to draw conclusions on the (actual) effect of plain packaging on smoking prevalence of Australian minors. First, we look at the year of data before plain packaging was introduced, which happened in December 2012. Second, we compute confidence intervals around the estimated treatment effects (that is, around the deviations from the fitted trend line) from 12/2012 on. Both analyses fail to find any evidence for an actual plain packaging effect on Australians aged 14 to 17 years. Several reasonable variations to our methodology are discussed. All of these would only result in findings even more indicative of an absence of any plain packaging effect.
Plain packaging, smoking prevalence, treatment effect, trend analysis
C13, C22, H43, I18
(Revised Version May 2014)