Stockholm School of Economics

About: Stockholm School of Economics is a education organization based out in Stockholm, Sweden. It is known for research contribution in the topics: Population & Cost effectiveness. The organization has 1186 authors who have published 4891 publications receiving 285543 citations. The organization is also known as: Stockholm Business School & Handelshögskolan i Stockholm.

Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings*

Abstract: Individuals who are unaware of the price do not derive more enjoyment from more expensive wine. In a sample of more than 6,000 blind tastings, we fi that the correlation between price and overall rating is small and negative, suggesting that individuals on average enjoy more expensive wines slightly less. For individuals with wine training, however, we fiindications of a non-negative relationship between price and enjoyment. Our results are robust to the inclusion of individual fi xed effects, and are not driven by outliers: when omitting the top and bottom deciles of the price distribution, our qualitative results are strengthened, and the statistical signifi cance is improved further. These fi ndings suggest that non-expert wine consumers should not anticipate greater enjoyment of the intrinsic qualities of a wine simply because it is expensive or is appreciated by experts. (JEL Classifi cation: L15, L66, M30, Q13)

Investor Protection, Equity Returns and Financial Globalization

Abstract: We study the effects of investor protection on equilibrium stock prices, returns and portfolio allocation decisions. In our theoretical model, if investor protection is weak, wealthy investors have an incentive to become controlling shareholders. In equilibrium, the stock price reflects the demand from both controlling shareholders and portfolio investors. As a consequence, due to the high demand from controlling shareholders, the price of weak corporate governance stocks is not low enough to fully discount the extraction of private benefits. This generates the following empirical implications. First, stocks should have lower expected returns when investor protection is weak. Second, domestic and foreign investors' participation in the stock market should be lower in countries with weak investor protection. Third, portfolio investors from countries with weak investor protection should hold relatively more foreign equity. Fourth, countries with weak investor protection should receive relatively more foreign direct investment. We show that these implications are consistent with existing empirical studies and we provide original evidence that domestic portfolio investors are less likely to participate in the domestic stock market and hold more foreign equity, when investor protection is weak.

An Introduction to Modern Welfare Economics

Abstract: This is the first book in welfare economics to be primarily intended for undergraduates and non-specialists Concepts such as Pareto optimality in a market economy, the compensation criterion, and the social welfare function are explored in detail Market failures are analysed by using different ways of measuring welfare changes The book also examines public choice, and the issues of provision of public goods, median voter equilibrium, government failures, efficient and optimal taxation, and intergenerational equity The three final chapters are devoted to applied welfare economics: methods for revealing people's preferences, cost-benefit analysis, and project evaluation in a risky world The book is intended for introductory and intermediate courses in welfare economics, microeconomics, and public economics It will also be suitable for courses in health economics, environmental economics, and cost-benefit analysis, as well as those undertaking project evaluations in government agencies and private firms