MA Theses 2012

Valentyna Baloshenko: “Does the Winner Really Take It All: Assessing the Impact of Mega Sport Events on FDI Flows of the Hosting Country”


Many countries see hosting of sports events as a way to ensure their sustainable development and to accelerate this development even further. Hosting a mega sport event can lead to economic, social and political impacts, such as creating new job and business opportunities, increasing tourist visits and promoting sport in a nation etc. However, until now there were no researches as whether hosting a big sport event has a positive influence on the FDI inflow to the country. We found that hosting Olympic Games does not generate significant positive effect on FDI inflows as well as hosting Football Championships. However, a positive significant anticipation effect was found for countries that have won the right to host Winter Games and World Cup, although the effect has a transitory nature. At the same time, bidding for hosting EURO Championship results in significant influence on FDI inflows with a permanent negative effect.


Mykyta Bilyi: “Empirical Testing of Option Pricing Models on Highly Volatile Emerging Markets”


This study compares performance ofBlack-Scholes with volatility smile correction and non-linear GARCH option pricing models. Thelog of Mean Square Error ratio and wins ratio of one day out-of-sample forecast are used as measures of accuracy. The data that is used in this study comes from Russian derivatives exchange board. Market prices for the option on RTS index futures for twelve months of 2011 are considered. Based onlog-MSE ratio criterion the conclusion is made about equal short-term forecasting powers of two pricing models.Wins ratio criterion implies that Black-Scholes model outperforms GARCH in calm market conditions, while the latter model produces more credible option price forecasts during market turmoil. This result suggests that GARCH option pricing model may be used along with convenient Black-Scholes model to estimate option prices during periods of high volatility in the emerging markets.


Olena Bogdan: “Impact Evaluation of the Social Investment Fund Project in Ukraine”


The purpose of this study is to evaluate the impact of the Ukrainian Social Investment Fund communal services micro-projects on district level morbidity rates. Using panel data for Ukrainian districts from 2000 to 2010 with economic factors and medical infrastructure, as inputs, and treatment variable, as a measure of project impact, the effect on morbidity rate is determined. The results of difference in-difference and fixed effect estimations are similar and indicate that the morbidity rate decreased substantially in participating districts in medium and long run perspective. Furthermore, the analysis of the heterogeneity of project impact reveals important details about the estimated impact on morbidity rate. Specifically, impact on morbidity rate was larger in districts which acquired more USIF funding, represent urban areas (cities) and have higher average wage.


Irina Capita: “The Impact of School Size on Educational Outcome: The Case of Moldova”


This thesis investigates the relationship between school size and educational outcomes in the Republic of Moldova. Using the information for almost entire population of schools in Moldova administrated by the Ministry of Economy found a positive statistically significant impact of school size on school performance, as measured by the mean test score for secondary school graduates. The positive effect was revealed before and after adding controls relevant for the case of Moldova. Based on the results of the best specification, we conclude that there is an optimal school size for Moldova, it is about 777 students. The results of the current work can be used as guidance during network optimization agenda in the country.


Arsenie Ciobanu: “Testing the Expectations Hypothesis in the Romanian Interbank Money Market”


This thesis uses cointegration and vector error correction models in order to test the validity of the Expectations Hypothesis in the Romanian interbank money market in the period 2003-2012. The methodology involves tests of cointegration between the shortest and the longest money market rates and tests of cointegrating vector restrictions. Vector error correction models are estimated on the entire sample period 2003-2012, on the pre-EU accession (2003-2006) and post-EU accession (2007-2012) periods as well as on rolling subsamples in order to assess the stability of liquidity premia and cointegrating vector parameters. The validity of the Expectations Hypothesis is supported by the empirical evidence during the post-EU accession period, associated with relatively stable liquidity premia. The hypothesis is rejected for the entire sample period 2003- 2012 and for the period 2003-2006, associated with fluctuating liquidity premia. The data utilized in the research consists of daily interbank money market interest rates published by the National Bank of Romania.


Alisa Firsova: “The Effect of Being a Victim and the Presence of a Bully in Class on Students’ Performance at School: Evidence from Ukraine”


High students’ achievement at school is very important nowadays since it is important for the later career of students and can explain wage inequality. One of the most important factors which determine studying is healthy environment at school. This paper considers the effect of being victimized and the presence of a bully in class on fourth and eighth students’ performance at school. Data used in the research comes from Trends in International Mathematics and Science Study 2007 for Ukraine. We find that being a victim has a negative impact on students’ performance at school for both fourth and eighth grades. Furthermore, it is found that violence behavior in a group which has at least one student who plays computer games too much negatively affects other students in the group for eighth grade.


Mark Iarovyi: “Testing Uncovered Equity Return Parity: Case for Asia and the Pacific”


This thesis tests the dynamic equilibrium relation occurring between exchange rates and the expected returns on risky securities. The future differentials in payoffs on assets are assumed to equalize due to uncovered equity return parity and the no arbitrage condition. The logic implies that if the country’s stock exchange is expected to produce lower pay-offs relatively to another country, its currency is expected to appreciate in time relatively to country which stock exchange yields higher returns. The sample countries used for this reason are the Asian Tigers, Australia, New Zealand and Japan – ones of the most open economies in the world with minimal regulation of international capital flows and high currency turnover.


Sergii Kiiashko: “Index Futures Market Efficiency and Arbitrage Opportunities: Evidence from the Ukrainian Futures Market”


In this study the market efficiency of the Ukrainian index futures market is examined by testing the hypotheses of the absence of ex-post and ex-ante mispricings, rarity and transitoriness of arbitrage profits and the existence of the direct relationship between average absolute relative mispricing and the time to maturity. We find that the frequency of transaction boundary violations in the Ukrainian market is significantly lower than in the developing Polish market and is comparable to the matured MMI (American) market. The analysis of the upper-bound violations does not allow us to reject the hypothesis of the absence of arbitrage opportunities. On the other hand, lowerbound violations, which are generally much more difficult to exploit by investors, led to frequent and persistent profits for the early contracts, however, violations almost totally ceased to exist for more recent futures. Overall, taking into account the current state of affair in the Ukrainian futures market the hypothesis of the market efficiency cannot be rejected.


Tetiana Kolomiiets: “Firm’s Demand for Labor: Does Energy Efficiency Matter?”


This work investigates the effect of energy efficiency on firms’ labor demand. As more energy efficient firms have lower costs of production, such firms should be more competitive on internal and external markets, which should lead to higher level of production and, finally, to higher labor demand. Using a Simultaneous Equation Model I reject the hypothesis about a positive relationship between energy efficiency and firm’s employment level. Moreover, the average wage rate of a firm also tends to fall with an increase of energy efficiency.


Dmytro Kovalchak: “Lead-Lag Relation Between Futures and Spot Market: Case of Russia”


The paper empirically investigates intraday lead-lag relation between futures and spot market in Russia for period September 2007 to December 2011 using 5-minute data for futures and index prices. Three-stage-least-squares regression is used to estimate lead-lag relation. Results indicate that Russian market exhibit bidirectional relation between spot and futures markets. Also, it was found that on the expiration day only recent movements (up to 5 minutes) of the spot (futures) market are important for determination of the direction of the futures (spot) market. Findings are consistent across all contracts under scrutiny. Result of the study are of interest for different groups of market participant: market makers, speculators and regulatory athority.


Artur Kovalchuk: “Inflation Targeting in Developing Countries: Influence on Growth and Inflation Volatility”


A growing number of developing countries are practicing inflation targeting as a monetary policy framework. If Central bank of such country wants to implement inflation targeting it has to take into account experience from other countries. This thesis provides the analysis of the changes in growth and inflation due to implementation of inflation targeting in developing countries. In order to meet the goal he macro-data for all developing countries was chosen. The period of investigation is 1984-2011 years. Estimation shows that there is significant effect of implemented inflation targeting on inflation and variability of growth. But, there is no clear effect on growth and variability of inflation.


Anna Kozlova: “Response of Residential Electricity Demand to Price Changes in Ukraine”


In Ukraine residential electricity tariffs are lower than production costs which lead to higher industrial tariffs and need of Government subsidies. That is why reduction of residential electricity consumption became a great concern of the Government. One of the main policies aimed at reduction of electricity consumption is increase in price of electricity. The current study attempts to estimate how increase in electricity price affects electricity consumption of urban and rural population. Also for the CSI countries problem of non-payments is still urgent that is why in this study effect of debt accumulation will be taken into account. As a result of estimation it can be seen that urban population is much less responsive to the price changes than rural population. Also the possibility of debt accumulation affects positively electricity consumption and reduces the effect of price increase.


Ulyana Kravchenko: “Inter-Industry Wage Differentials. Evidence from Developed and Developing Countries”


This paper investigates the impact of industry effect on wage setting for the same occupational groups divided by wage hierarchy: top-management, middle-class workers and low-wage workers. Data used in this research are taken from WageIndicator dataset for 2010. These data were collected through a web portal connecting to national websites in almost 50 countries. Method of ordinary least squares (OLS) is used in obtaining the results of the wage equations. Results are compared using different set of controls: human capital characteristics and enterprise conditions. Findings from cross-country equations indicate that interindustry wage differentials are persistent for same set of industries, for employees in the same occupational group controlling for labour characteristics, firm’s characteristic and notwithstanding the developed and developing countries. However Manufacturing industry seems to be the lowest paid industry in developing economies, this pattern breaks for advanced economies countries.


Kostyantyn Kravchuk: The Impact of Trade Liberalization on Productivity Dispersion: Evidence from Ukraine


The paper investigates the effect of trade liberalization on productivity dispersion using a rich dataset that contains financial records of 57,734 Ukrainian manufacturing firms for 2001-2009. Productivity dispersion measures are obtained from the estimation of Cobb-Douglas production function applying Olley-Pakes approach to deal with simultaneity and selection biases. Then industry-level productivity dispersion measures are computed, and OLS regression is employed to evaluate the impact a change in import tariff. The study shows that a reduction of tariff leads to a decrease in the dispersion. The results confirm the conclusion of Melitz (2003) model which predicts exit of the least productive firms after trade liberalization. However, the robust evidence is obtained only in specifications with the lagged values of the tariff variable. It implies that the reduction of tariff causes exit of inefficient firms not immediately, but in the next two years. The contribution of this paper is to provide rare evidence about the topic from a developing country where effect of reduction of trade barriers on productivity distribution may be more pronounced. The paper also suggests an explanation of the contradictory results that were found in previous studies, and provides empirical reasons for an extension of Melitz model.


Taras Kravets: “Effect of Corporate Governance on Bond Yields: Case of CIS”


This work is dedicated to the influence of corporate governance of CIS bond issuers on their bond yields. There are a lot of papers in which authors provide strong evidence that bond yields of a specific company declines if corporate governance is effective. But most of the evidence was found for developed countries, such as the United States of America. Unfortunately, in corrupted CIS countries companies do not have a powerful incentive to reveal the information about their corporate structure. Hence, it is hard either to measure such things as corporate governance for CIS companies or to find such ratings estimated by some agencies. Hence, at present it is only possible to do the analysis between huge CIS companies. Anyway, the results of this research fit the expectations and confirm findings done by Bhojraj and Sengupta (2003) and Collins, et. al., (2004). After estimating the model it has been found that corporate governance significantly affects bond yields. In other words, the better is corporate governance, the lower bond yields are expected to be.


Polina Kulak: “Do Investments in Sustainability/Corporate Social Responsibility Initiatives Add Value to the Company?”


The goal of the research is to investigate the relationship between the companies’ investments in the corporate social responsibility/corporate sustainability initiatives and the companies’ performance and value on the market. Developing corporate social responsibility/corporate sustainability practices require substantial initial investments in the form of financing environmental and social projects, improving corporate governance as a necessary tool to meet legal obligations and create a necessary platform for developing corporate social responsibility/sustainability practices. So the main question is whether these investments would be paid off in term of better company’s performance and appreciated value on the market.


Ecaterina Loghinova: “Returns to Fields of Study in Moldova: Do Expectations Meet Reality?”


The main goal of this paper is to investigate whether Moldovan young people choose their future specializations in such a way that creates an excess supply of unclaimed specialists on the Moldovan labor market and, as a consequence, the actual returns do not coincide with expected ones while the latter possibly act as the main motivation when making the choice. In order to analyze possible misbalances the likelihood of being employed given the specialization, expected and actual returns to selected fields of study, and job correspondence to the specializations are explored. The findings show that graduates from economics and law – the most popular specialties – are less likely to be employed than other, and their reservation wages are lower than the wages of specialists from other fields. Statistically significant differences in both actual income and probability to obtain a job which corresponds to specialization between “business, economics and law” and other fields were not found either. Thus, the results do not justify a higher demand for education in and higher expected returns to this field of study.


Andrii Luzan: “Does a Loan for Own Customers Make Sense? Empirical Evidence from the USA”


This paper investigates the issues connected with one of accounts receivable policies: formation of financial subsidiary by parent company in order to provide loans for own customers to buy its products. Such type of financial policy leads to changes in the company’s capital structure and accompanied by important economic features. Results suggest that captive finance subsidiary is most likely to be afforded by large companies with significant amount of accounts receivable on the balance sheet. In addition companies can manage their volatility of sales by using discrimination price policies, which itself raises possibilities to optimize production cycle and gain more profits. At the last stage this research investigates the issue of the 2008-2010 financial crisis reflection on the shares price. The analysis shows that stock prices of companies with captives were hit relatively more than the other firms, even if such companies more profitable than others during bad times. This can be explained that the presence of a captive subsidiary moves parent company closer to the financial nature, and, particularly, financial companies were severely tumbled by the recent financial crisis.


Leonid Matvieiets: “Do Educated Managers Matter?”


The paper studies whether the CEO’s level of education and background matters for the firm’s performance. We estimate the influence of different educational levels on performance in a sample of publicly traded companies, whose stocks are listed at international stock exchanges, controlling for industry and regional effects and country specific cultural elements. Besides estimating the influence of education, we also explore whether this influence of education depends on the cultural environment, measured by Geert Hofstede Cultural Dimensions, in which the companies and the CEOs operate.


Anzhela Mazhorova: “Stock Markets Comovements in Eastern European Countries: The Role of Integration”


In this paper the contribution of integration processes to stock market comovements is investigated. We explore the role of economic and financial forces in detecting the stock market fluctuations among transition countries from Eastern Europe. This role is represented in the form of global and idiosyncratic shocks. Using the factor vector autoregressive approach and structural form representation the main determinants of fluctuations and their impact were found out. Also it is shown that the reaction of prices to the own idiosyncratic shock is positive and significant for all countries.


Sergii Meleshchuk: “Genes and Technology Diffusion”


This paper endeavors to shed light on one of the most puzzling questions in modern economics literature: why different countries enjoy different levels of technological development. The main hypothesis is that certain alleles of DRD4 gene may affect individual novelty-seeking behavior, and, consequently, the frequency of the alleles in population may shape the aggregate outcomes. Genetic backgrounds of different propensity towards novelty-seeking are explained, theoretical model is built to link individual behavior with aggregate outcomes. Theoretical predictions are tested empirically on different measures of aggregate level of technology and innovations in the country. The influence of frequency of C allele on the measures of level of technologies and innovations was found to be positive, significant, while the evidence on the influence of 7R is less reliable.


Stsiapan Padchasha: “Financial Crisis and Savings: Evidence from the Russia Longitudinal Monitoring Survey”


This thesis investigates the hypothesis whether the financial crisis of 2010’s changed the household savings behavior in the Russian Federation. After the careful study of the literature on household savings behavior it was concluded that the financial crisis seems likely to affect household savings behavior by changing the strength of the precautionary savings motive. In order to evaluate the existence of the precautionary savings motive the data for the period of 2005-2009 years from the Russia Longitudinal Monitoring Survey were used. The coefficient of absolute risk aversion that shows the strength of the precautionary savings motive was estimated by using the conditional volatility of household labor income. The estimated empirical results show that the latest financial crisis indeed influenced savings behavior of Russian households: before the financial crisis of 2010’s Russian households saved their assets for the precautionary savings motive, whereas after the financial crisis Russian households started to dissave accumulated assets in order to maintain the permanent level of consumption.


Vladyslav Petrov: “Education-Health Gradient in Different Cultural Environments”


In this paper we studied education-health gradient in different cultural environments based on World Bank for the period 1980-2007 years. In the first chapter we provide introductory information. The second chapter describes the mechanism of interaction between health, education and cultural environment. In the third chapter we develop a theoretical basis for empirical analysis. The fourth chapter is presenting the methodology of empirical analysis. In the sixth chapter we report on results and in the seventh we present our conclusions on the results and prospects of future study. For six out of fourteen cultural indicators, which had statistically significant interaction with education, we found complementary relationship with education. Respectively eight indicators appeared to be substitutes to education in health model. The greatest effect of education on health was estimated for the following cultural environments: Muslim countries, countries with the status of the former French colonies and countries with high levels of cultural diversity. The above-mentioned culture environments are recommended for detailed consideration by officials of international organizations and charity funds, as promising areas for health policy implementation through improving of educational level.


Dmytro Popov: “Predictability of Commodity Futures Returns on Emerging Markets: A Nonlinear Approach”


The ability to predict the returns on financial instruments, either stocks, bonds or derivative contracts, carried away academics and practicing investors for decades. This research aims to assess the validity of EMH for commodity markets of emerging countries. We claim, that given the defining characteristics of emerging economies, additional forecast efficiency can be extracted through the use of non-linear techniques GARCH and Artificial Neural Networks. Our results show, that commodity futures returns are indeed predictable in short-term horizon, and the forecasting accuracy is satisfactory. This implies that the weak form of the EMH does not hold for emerging commodity markets, and additional benefits can be obtained through this inefficiency. We also describe the implications of such a result for hedgers.


Elena Riabikina: “Remittances and Small Business Investments: The Case of Moldova”


This paper analyzes the links between remittances and small business development in Moldova. The aim is to investigate whether being an experienced user of banking services and having access to banking system in Republic of Moldova, in particular, among Moldovan remittance-receivers have a positive effect on investment in small business. In order to address this issue a Probit model and Propensity Score Matching methods were implemented upon subjective fact of owning a business by the head of the remittance-receiving and non-receiving households. The research is based on a household data set for Moldova for the year 2008. It was found that remittance receivers are more willing to start own business. Also the nearness of bank location, opened current account in the bank and the trust in banks have a positive effect on the entrepreneurial spirit. However, these factors are no more pronounced among remittance-receivers. These results suggest that activities increasing trust and current account usage among all Moldovans will be more effective that those focusing on remittance-receivers only.


Amet Seitibraimov: “Underpricing and Long-Term Performance of Initial Public Offerings from CIS”


This paper estimates the degree of underpricing and underperformance for IPOs originating from Russia, Ukraine and Kazakhstan during the period from 1996 to 2010. It also determines the factors explaining the performance of these stocks in the one, two and three year term after the date of IPO. The paper provides the comparison in the patterns of the above-mentioned phenomena across the three countries under study as well as their comparison to the international evidence. It also provides the results for variability in the estimates of underpricing and underperformance against a set of benchmarks relevant for a diverse circle of investors.


Solomiya Shpak: “Effectiveness of Foreign Aid to Health: Case of Developing Countries”


This paper considers effectiveness of health targeted aid and the role of corruption level in performance of health care system. The quality of the health care is measured by avoidable mortality, which refers to all deaths that can be prevented or cured given available knowledge and technology in health care. The sample contains data on 34 developing countries covering the period of 1995-2009. Fixed effect methodology is applied to estimate whether total aid and bilateral and multilateral aid separately has effect on avoidable mortality. Results show that health targeted aid does have positive effect on avoidable mortality elimination. Moreover, countries with high corruption level tend to distribute aid more effectively than those with low corruption level. Finally, it is bilateral aid that seems to influence avoidable mortality level.


Oleksandra Slobodian: “Effect of Pension Increase on Unemployment Duration”


While majority countries have already implemented contributional pension scheme Ukraine still postpones the reform. Pensions in Ukraine are paid from funds accumulated by current population and the size of the pension is established by state. Further more pensions account for nearly 20% of household income thus reducing the incentives to work. This research studies the influence of pension increase in 2004 on unemployment duration in Ukraine. We assume that unexpected pension increase negatively affects the unemployment duration by stimulating longer job search by members of households receiving income. On the other hand higher pension leads to decrease of unemployment duration by promoting retirement of working pensioners, thus the total effect on unemployment is ambiguous.


Anna Strelchuk: “The Effect of FDI Entry-Mode on Economic Growth: Ukraine”


The aim of this study is to examine the effect of different FDI entry-mode on economic growth of Ukrainian regions. The empirical analysis was performed using the data on Ukrainian regions for 2000-2008 time period. Three estimation techniques were used in examining production function model and growth model: OLS, Fixed effect estimation and GMM. Empirical results suggest that both forms of FDI entry are beneficial for economic growth of Ukrainian regions. Therefore, government should perform economic policies targeted on FDI inflow stimulation, disregarding the FDI entry-mode.


Roman Syrotian: “Velocity of Money: Determinants in Ukraine”


This work studies the determinants of changes in the velocity of money in Ukraine in 2001:1 2011:4 period, in particular it considers such factors as variability of money growth, wealth and inflation. Four velocity measures corresponding to M0, M1, M3 and M4 money aggregates were considered. The data sample consists of quarterly observations of Ukrainian macroeconomic figures. Two estimation procedures were performed: Granger causality tests and cointegration analysis. In the result, it was found that the drop in the velocity in the considered period was mostly explained by wealth effects while inflation and variability of money growth were found to be non significant in sense of explaining movements in velocity.


Yaraslau Taran: “What Factors Can Predict that a Bank will Get in Trouble During a Crisis? Evidence from Ukraine”


During the 2008-2009 crisis a wave of bank failures hit Ukraine. Thousands of people lost their money or spent a lot of time, money and health to get their money back. This study is devoted to the identification of early warning signs which could help to identify the weak banks, which would become insolvent if a crisis would come to Ukraine. I use bank level data for the crisis periods 1997-1998 and 2007-2008 in order to find the variables that could have been helpful for predicting banking troubles during both of these periods of financial crises. Capital adequacy and liquidity indicators are shown to be consistent predictors of banking failure across crises.


Dzianis Tauhen: “The Customs Union of Belarus, Russia and Kazakhstan: Gravity Model Approach to Estimation of Trade Flows Changes”


This study measures the anticipatory trade creation and trade diversion effects of Customs Union of Belarus, Russia and Kazakhstan (CUBRK) for chosen industries. Those effects are estimated using Gravity Model of Trade (GMT). Log-linerized and exponential specifications of GMT are estimated with the help of OLS and Poisson-Pseudo-Maximum-Likelihood (PPML) estimators. Models include time fixed effects and variables which deal with endogeneity issues. The research data contain large amount of zeros, so OLS is estimated mainly for comparison reasons, since it was proven to be biased in case of zero trade flows. The inference is made based on PPML estimation. In order to capture gradual changes in trade flows, dynamic models are estimated along with static models. The results show strong evidence of static and dynamic anticipation of trade creation.


Liudmila Tuhari: “Does Corporate Lobbying Affect the Total Factor Productivity?”


This study attempts to evaluate the effectiveness of corporate lobbying activity conducted by a firm from a financial perspective. By examining the productivitylobbying activity relation, this research fills in the gap between the political connections and productivity literature. The panel data on 7466 US firms for a period of 10 years are analyzed as a case. The lobbying expenditures are taken as one of the variables affecting the total factor productivity of a firm. The paper provides a brief synthesis of the literature related to the effects of corporate political activities and presents some methodological issues concerning the estimation of lobbying outcomes. The results of empirical estimation suggest that lobbying has a significant positive effect on the firm’s total factor productivity: each 1% increase in lobbying expenditures lead to a growth of productivity by 0,057%. Also, on average, lobbying firms are more productive than non-lobbying companies.


Nicolai Vicol: “Wealth Concentration in the Top Ranges: An Agent-Based Model”


A simple random growth process describing wealth accumulation by a stochastic differential equation allows the agents to invest in (a) assets exposed to stock market fluctuations and (b) assets giving stable returns. The model sheds light on the origin of Pareto distribution of wealth, described by a single parameter. This Pareto coefficient serves as measure of wealth concentration among Forbes billionaires. Its high negative correlation with the equity index S&P 500 confirms that in periods of stock market booms, wealth concentration in the upper tails becomes more acute, while the opposite in case of financial crashes. The model is further enriched allowing agents to trade under bargaining power of the wealthier, so modeling the preferential attachment. In this agent-based model (ABM) the role of government resumes to taxation and redistribution. The numerical simulations suggest that bigger size of government results in wealth more equally spread out. Limited trade between agents has the same effect. However, the bargaining power of the wealthier makes wealth concentrates. The simulations results are confirmed empirically in a cross-country analysis, where the number of super wealthy individuals serves as proxy for level of wealth concentration when controlled for size of nation’s wealth and population. Business and labor regulations in favor of the poorer, as well as reducing corruption seem to be efficient means to reduce wealth concentration in the top ranges.