Bias and efficiency of single vs. double bound models for contingent valuation studies: a Monte Carlo analysis

The Dichotomous Choice Contingent Valuation Method (DC-CVM), both in the single and the double bound formulation, has been in the last years the most popular technique among practitioners of contingent valuation, due to its simplicity of use in data collection. The single bound procedure is easier to implement than the double bound, especially in data collection and estimation. On the other hand, it is well known that the double bound is more efficient than the single bound estimator. It remains to analyze the bias of the ML estimates produced by either model, and the gain in efficiency associated to the double bound model, in different experimental settings. We find that there are no relevant differences in point estimates given by the two models, even for small sample size, so that neither estimator can be said to be less biased than the other. The greater efficiency of the double bound is confirmed, although it can be seen that the differences tend to reduce by increasing the sample size, and are often negligible for medium size samples. Provided that a reliable pre-test is conducted, and the sample size is large, our results warrant the use of the single rather than the double bound model

A Sample Selection Model for Protest Non-Response Votes in Contingent Valuation Analyses

Pay some money for a public good, for reasons that differ from a genuine indifference to the good. For example, some people may dislike the idea of placing monetary values to public goods like the environment or a historical monument. Some may protest against the inefficiency of the public administration in managing public funds, and refuse to pay a tax. Others may behave strategically, if they think that their answer could influence the actual level of taxation. A good survey design can effectively reduce them, but protest votes can hardly be completely removed from the dataset. The question is how to deal with them. Sometimes they are considered as true zero values, or, if the dichotomous choice method is used, as if they were below the minimum bid. Obviously, if the unwillingness to pay reflects only a protest and not a low or null valuation of the good, this procedure results in downward biased estimates of the wtp measure. It is of paramount importance that the questionnaire contains a follow up question for individuals that refuse payment, to investigate about their motivations, and interpret the responses. Alternatively, observations with protest votes are simply cut off the sample, and only the subsample with positive reservation prices is considered in the analysis. This procedure will not have any effect for the validity of the estimates only if there is no sample selection bias. Otherwise, it leads to incorrect estimates for the willingness to pay. In this paper we present a sample selection model that allows to take into account, and correct, the possible bias due to protest votes. It is shown that selection bias can sensibly affect the estimates for the willingness to pay for the public good. It will be seen that the model may present estimation problems because of flatness of the likelihood function. In some cases confidence intervals around the sample selection coefficient are too wide to give evidence of presence or absence of sample selection bias. It is argued that even in these circumstances the sample selection model with the protest votes should be preferred to the model without protest votes, since it takes into account the uncertainty about the estimates of the willingness to pay

Decomposing productivity differential: evidence from foreign owned and domestic firms in Italy

Using the idea of the multidimensional generalization of the Duncans’ index (Silber 1992), the productivity per worker differential across groups of firms can be decomposed into different components attributed to differences in: sectoral productivity, investment in human and physical capital, employment and other determinants. More specifically, for decomposing group productivity differential we propose an Oaxaca’s decomposition – based approach which assumes a Reimer’s weighting scheme An application of the decomposing method aimed at evaluating productivity differences across foreign owned and domestic firms in Italy is also provided

Bias and Efficiency of Single vs Double Bound Models for Contingent Valuation Studies.A Monte Carlo Analysis

The Dichotomous Choice Contingent Valuation Method can be used either in the single or double bound formulation. The former is easier to implement, while the latter is known to be more efficient. We analyse the bias of the ML estimates produced by either model, and the gain in efficiency associated to the double bound model, in different experimental settings. We find that there are no relevant differences in point estimates given by the two models, even for small sample size, and no estimator can be said to be less biased than the other. The greater efficiency of the double bound is confirmed, although differences tend to reduce by increasing the sample size. Provided that a reliable pre-test is conducted, and the sample size is large, use of the single rather than the double bound model is warranted.Contingent valuation, Single bound estimator, Double bound estimator, Bias, Statistical efficiency

Describiendo la identificación con Europa y con el proyecto de la Unión Europea en las regiones europeas

Recent political events in the European Union (EU) highlighted a growing dissatisfaction of citizens in several EU regions with the EU institutions’ management of socio-economic and financial challenges. This eventually led to a political legitimization crisis, whose drivers are partially shared among EU regions and partially area-specific. However, the relation between citizens’ identification with the EU project and the regions’ characteristics has not been analysed yet. In this article, we fill in this gap by addressing three research questions: i) To what extent do EU citizens identify with Europe and the EU project? ii) Do European regions have different patterns and level of identification? iii) Are the results driven by specific socio-economic variables? Answering these questions is crucial to inform a more inclusive and resilient design of the EU Cohesion Policy in a crucial period for reforming the EU. To this purpose, we develop a novel probabilistic classification model, IdentEU, which embeds with the concept of individual identification with Europe. We use micro-level data from a survey implemented within the PERCEIVE project. We find that the influencing variables that mostly affect (citizens and) regions’ identification with the European project are: trust in the EU institutions, the effectiveness of EU Cohesion Policy and spending, and the level of corruption. These issues gain relevance at the light of three main challenges that affected the EU socio-economic development path in the last decade, i.e. the 2008 financial crisis, the globalization process, and Brexit.Los recientes acontecimientos políticos en la Unión Europea (UE) pusieron de relieve una creciente insatisfacción de los ciudadanos en varias regiones de la UE con la gestión de los desafíos socioeconómicos y financieros de las instituciones de la UE. Esto eventualmente condujo a una crisis de legitimidad política, cuyas causas son parcialmente compartida entre las regiones de la UE y parcialmente específicas de cada área. Sin embargo, la relación entre la identificación de los ciudadanos con el proyecto de la UE y las características de las regiones aún no se ha analizado. En este artículo, llenamos este vacío abordando tres preguntas de investigación: i) ¿En qué medida los ciudadanos de la UE se identifican con Europa y el proyecto de la UE? ii) ¿Tienen las regiones europeas diferentes patrones y niveles de identificación ? iii) ¿Los resultados se basan en variables socioeconómicas específicas? Responder estas preguntas es crucial para generar un diseño más inclusivo y resiliente de la Política de Cohesión de la UE en un período crucial para la reforma de la UE. Con este fin, desarrollamos un nuevo modelo de clasificación probabilística, IdentEU, que se integra con el concepto de identificación individual con Europa. Utilizamos datos a nivel micro de una encuesta implementada dentro del proyecto PERCEIVE. Encontramos que las variables que principalmente afectan la identificación de (ciudadanos y) regiones con el proyecto europeo son: confianza en las instituciones de la UE, la efectividad de la Política de Cohesión y el gasto de la UE, y el nivel de corrupción. Estas cuestiones cobran relevancia a la luz de tres desafíos principales que afectaron la trayectoria del desarrollo socioeconómico de la UE en la última década, es decir, la crisis financiera de 2008, el proceso de globalización y el Brexit

PERCEIVE project - Deliverable D5.4 "Report of the comparative analysis of the correlation between topics emergent from regional discourses on the one hand, and the awareness and perceptions of the EU (from Eurobarometer) on the other hand"

The report at hand focuses on the statistical test of an eventual relationship between media representation of EU regional cohesion policy, among other explanatory variables, and individuals’ level of European identification as well as their different definitions of being European. At present time, it is largely acknowledged that individuals do not possess an innate sense of being European, rather, the meaning of such status is socially constructed. Accordingly, extant research has explored the role of the media in shaping the opinions of the general public. However, only recently has research started focusing on the potential role of cohesion policy in shaping EU identity and many aspects of this phenomenon are still unexplored. We claim that by extending knowledge in this still unfolding area our work contributes to the wider debate on European identity in several ways: a) by performing a media analysis in seven different countries we offer one of the first international evidences as most of the media analyses are conducted in individual national contexts; b) our study is based on a large ad-hoc designed survey which allows us to capture so far largely overlooked aspects of EU identity such as the multiplicity and synchronicity of levels – i.e. individual, regional and national – in a way that Eurobarometer-based research could not do so far; c) our survey also allowed us to explore in unprecedented depth the factors associated with different definitions of being European; d) we analyse media in a bottom-up way, that is, without using pre-coded frames of valence characterising most of extant research; e) along with standard interpretive techniques, we use formal methods for representing national media spaces such as topic modelling and sentiment analysis. We believe that this mixed method approach makes our study more replicable than purely qualitative ones, still, nuances and complexities of extracting meaning from text are better preserved than purely quantitative studies

Modelling zero bids in contingent valuation surveys

When modelling data generated from a discrete choice contingent valuation question, the treatment of zero bids affects the welfare estimates. Zero bids may come from respondents who are not interested in the provision of the public good; alternatively, some zero-bidders may be protesting about the valuation exercise, but hold positive values for the good. In this paper we investigate the effect of different levels of information on zero-bidders on welfare estimates for the population. We find that different strategies of identification may have non-trivial effects. We recommend use of full debriefing questions for zero-bidders, and use of sample selection models to correct for bias caused by protest behaviou

PERCEIVE project - Deliverable D2.4 "Report on the probabilistic model of estimation of citizens’ identification with the EU project and ranking of the case study regions"

In line with the Grant Agreement, this deliverable is provided on month 22 (June 2018) and aims to develop a novel probabilistic model to classify EU citizens according to their level of identification with the EU. In order to achieve this objective, D2.4 addresses the following research questions: - To what extent do EU citizens identify with Europe and the EU project? - Have European regions different patterns and level of identification? - Are the results driven by specific socio-economic variables

Approaching an investigation of multi-dimensional inequality through the lenses of variety in models of capitalism

After a synthetic presentation of the state of poverty and inequality in the world and the contradictions incurred by economic theory in this field after decades of globalization and in the midst of a persisting global crisis, in paragraphs 2. and 3. we outline the rational for our theoretical analysis, underlining two main aspects. First of all, in paragraph 2. we recall the reasons which makes inequality a multidimensional phenomenon, while in paragraph 3. we explore the reasons why the models of capitalism theory is relevant for studying multidimensional inequality. These paragraphs emphasise that inequality is a multidimensional and cumulative phenomenon and it should not be conceived only as the result of the processes of personal and functional distribution of income and wealth, which even by themselves are intrinsically multidimensional. The basic idea is that institutions, the cobweb of relations among them and their interaction with the economic structure define the model of capitalism which characterises a specific country and this, in turn, affects the level and the dynamics of inequality. This approach is consistent with the sociological approach by Rehbein and Souza (2014), based on the analytical framework developed by Pierre Bourdieu. In paragraph 4. we outline the rational for our empirical analysis, applying the notion of institutional complementarity and examining the relationship between institutional complementarity, models of capitalism and inequality. Besides, refining Amable’s analysis (2003), we provide empirical evidence on the relationship between inequality in income distribution and models of capitalism. Additionally, basing on cluster analysis, we identify six different models of capitalism in a sample of OECD countries, provide preliminary evidence on the different level of inequality which characterises each model and suggest that no evidence supports of the idea that a single model of capitalism is taking shape in this sphere in EU. In paragraph 5. we give some hints about issues in search for a new interpretation capable to fasten together the process of increasing inequality, the notion of symbolic violence and the models of capitalism theory. In the last paragraph we focus on conclusions useful for carrying on our research agenda