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A growing literature examines adverse behavior as unintended consequences of incentives. We test Lazear's hypothesis that states that if rewards were dependent solely on relative performance then an increase in rewards would induce agents to engage in sabotage activity to reduce rivals' output. We test this hypothesis using the natural experiment of a rule change in Spanish football, the increase in points for winning a league match from two to three. We find, consistent with Lazear's hypothesis, that teams in a winning position were more likely to commit offences punishable by dismissal of a player after this change.

Proposals for tax cuts on cultural goods represent an ongoing debate in cultural policy. The main aim of this paper is to shed some light on this debate using microsimulation tools. First, we have estimated an Almost Ideal Demand System for 19 different groups of goods, including cultural goods. Expenditure and price elasticities have been obtained from this model. Using this information, three alternative cuts in the VAT rate on cultural goods have been microsimulated and evaluated in terms of revenue and welfare. These types of fiscal reforms will lead to welfare and efficiency gains that can be described as regressive.

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Most of the literature on returns to languages is concerned with immigrants. The authors' study, which uses the European Community Household Panel Survey for the period 1994–2001, infers returns to non-native languages by native workers in nine countries of the European Union. The study differs from other studies that deal with the same issue in three respects. First, instead of using a dummy for each language, they use the ratio of the population not proficient in a given country's national language and compare the results with the more traditional approach using dummies. Second, they correct for time-independent measurement errors in self-reporting and find that the resulting IV estimates are much larger than those obtained by OLS. They also suggest that there is little room for time-persistent errors and heterogeneity and that therefore their estimates should suffer ostensibly little from unobserved ability biases. Finally, they estimate IV quantile regressions to illustrate how returns to languages vary at different points of the distribution of earnings.