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Table 2 Descriptive statistics of profit sensitivity

From: How can states benefit from the equity premium puzzle? Debt as revenue source for Swiss cantons

Debt strategy/parameter Median Mean Std. dev. Min. Max.
(1) annual adjustment to optimal debt level
B0 (initial debt level) 5.18 7.03 6.55 1.05 36.07
\( {\widehat{\mathrm{B}}}^{\ast } \) (optimal debt level) 16.75 17.74 12.08 1.80 66.55
\( {\widehat{\mathrm{B}}}_1^{\ast } \)/rev. (optimal debt in % of receipts) 161.41% 178.67% 1.34 0.00% 720.07%
i0 (observed initial interest rate) 2.46% 2.51% 0.01 0.00% 6.44%
\( {\widehat{\mathrm{i}}}_0 \) (estimated initial interest rate based on B0) 2.46% 2.41% 0.01 0.09% 5.28%
\( {\widehat{\mathrm{i}}}_1 \) (estimated interest rate at \( {\widehat{\mathrm{B}}}^{\ast } \)) 3.24% 3.28% 0.01 0.35% 6.88%
\( \widehat{\uppi} \) (estimated profit [in % of total receipts]) 1.45% 4.78% 7.05 0.00% 50.25%
 Profitable years per canton 14.50 11.54 7.21 0 19
(2) Annual adjustment up to 100% of receipts
B0 (initial debt level) 5.18 7.03 6.55 1.05 36.07
\( {\widehat{\mathrm{B}}}_1 \) (adjusted debt level) 8.17 9.37 6.18 1.80 36.07
\( {\widehat{\mathrm{B}}}_1 \)/rev (adjusted debt in % of receipts) 100.00% 87.28% 0.37 0.00% 211.41%
i0 (observed initial interest rate) 2.46% 2.51% 0.01 0.00% 6.44%
\( {\widehat{\mathrm{i}}}_0 \) (estimated initial interest rate based on B0) 2.46% 2.41% 0.01 0.09% 5.28%
\( {\widehat{\mathrm{i}}}_1 \) (estimated interest rate at \( {\widehat{\mathrm{B}}}^{\ast } \)) 2.60% 2.54% 0.01 0.13% 5.96%
\( \widehat{\uppi} \) (estimated profit [in % of total receipts]) 0.13% 1.11% 1.55 0.00% 6.98%
 Profitable years per canton 11.50 9.69 6.22 0 18
(3) 2 years moving average adjustment up to 100% of receipts
B0 (initial debt level) 5.16 7.02 6.60 1.05 36.07
\( {\widehat{\mathrm{B}}}_1 \) (adjusted debt level) 7.94 9.39 6.04 1.93 35.54
\( {\widehat{\mathrm{B}}}_1 \)/rev (adjusted debt in % of receipts) 94.63% 86.26% 0.33 0.00% 204.77%
i0 (observed initial interest rate) 2.40% 2.42% 0.01 0.00% 5.86%
\( {\widehat{\mathrm{i}}}_0 \) (estimated initial interest rate based on B0) 2.39% 2.33% 0.01 0.09% 5.28%
\( {\widehat{\mathrm{i}}}_1 \) (estimated interest rate at \( {\widehat{\mathrm{B}}}^{\ast } \)) 2.52% 2.46% 0.01 0.13% 5.99%
\( \widehat{\uppi} \) (estimated profit [in % of total receipts]) 0.23% 0.77% 1.37 − 6.61% 6.06%
 Profitable years per canton 12.00 11.15 5.15 1 18
  1. Notes: Unbalanced panel of 26 cantons and 19 years (1997 to 2015); n = 468