The referendum incentive compatibility hypothesis: Some new results using information messages

We report results from a laboratory experiment that allows us to test the incentive compatibility hypothesis of hypothetical referenda used in CV studies through the public or private provision of information messages. One of the main methodological issues about hypothetical markets regards whether people behave differently when bidding for a public good through casting a ballot vote than when they are privately purchasing an equivalent good. This study tried to address the core of this issue by using a good that can be traded both as private and public: information messages. This allows the elimination of confounding effects associated with the specific good employed. In our case information dispels some of the uncertainty about a potential gain from a gamble. So, the approximate value of the message can be inferred once the individual measure of risk aversion is known. Decision tasks are then framed in a systematic manner according to the hypothetical vs real nature of the decision and the public vs private nature of the message. A sample of 536 university students across three countries (I, UK and NZ) participated into this lab experiment. The chosen countries reflect diversity in exposure to the practice of advisory (NZ) and abrogative (Italy) referenda, with the UK not having any exposure to it. Under private provision the results show that the fraction of participants unwilling to buy information is slightly higher in the real treatment than in the hypothetical one. Under public provision, instead, there is no statistical difference between real and hypothetical settings, confirming in part the finding of previous researchers. A verbal protocol analysis of the thought processes during choice highlights that public provision of information systematically triggers concerns and motivations different from those arising under the private provision setting. These findings suggest that the incentive compatibility of public referenda is likely to rely more on affective and psychological factors than on the strategic behaviour assumptions theorised by economists

Cross Compliance: what about compliance?

We reviewed some moral hazard (MH) models applied to agri-environmental policies and identified the main methodological aspects of the literature on this topics. Imperfect vs incomplete monitoring , static vs dynamic and single vs multiple agents models are the main lines along which the literature has been organised analysing each component of a MH model. Most papers point out the role of farmers' risk aversion in mitigating MH. Others highlight that the observed high rate of compliance is still somewhat paradoxical given current enforcement strategies with low fines and monitoring levels. Cross compliance confirm these findings and urges further studies on dynamic models and farmers' non profit maximising behaviour.Cross-compliance, Moral Hazard, Enforcement, Agri-environmental schemes, Agricultural and Food Policy, Q15, Q58, D82,

Consumer Welfare and the Loss Induced by Withheld Information: The Case of BSE in Italy

The paper develops a measure of consumer welfare losses associated with withheld information about BSE linkage with vCJD. food safety. The Cost of Ignorance (COI) is measured by comparing the utility of the informed choice with the utility of the uninformed one, under condition of improved information. Unlike previous work, based on a single equation demand model, the measure is obtained retrieving a cost function from a dynamic Almost Ideal Demand System. The results indicate that Italian consumers bore a significant loss because of the delayed release of information.Food safety, welfare analysis, information, Food Consumption/Nutrition/Food Safety, BSE, D80, D60, D12,

The Evolution of Institutional Structure of Italian Agriculture: A Historical Reconstruction Through the Debate on Agricultural Holdings Classification

Industrial Organization,

Price Transmission in Three Italian Food Chains: A Structural Break Approach

Recently a wide instability of food prices has been observed in world and European agricultural and food markets. Both media and policy makers have dealt with the unsatisfactory patterns of marketing margins and price transmission along the food chain which may bring about distributive issues and affect inflationary trends. Although price transmission and margins dynamics have attracted so much interest at the policy level, few Italian studies deal with this topic. Our aim is to provide a first analysis of the price transmission mechanism in three Italian agri-food chains (lamb, pork and pasta), within a structural change framework. Results show that structural breaks in the price transmission mechanism are an issue in the food chain of pasta and pork with the regime change arising in occasion of the price bubble of 2007-2008.price transmission, cointegration, structural breaks, Agribusiness, Q13, L11,

Exploring the Impacts of Risk Communication Policies on Welfare: Theoretical Aspects

The aim of this paper is to explore possible measures to assess welfare changes resulting from alternative risk communication policies drawing on previous work on welfare losses due to incorrect risk perceptions. A review of the literature analysing models of risk information processing point out the role of Bayesian updating processes in modelling changing risk perceptions. On the other hand welfare analysis of the consequences of action undertaken under ignorance suggest possible measures of the benefits of improved risk communication. An illustrative example of welfare losses due to poor information is provided using the classical data set on milk contamination in Ohau (Hawaii). Welfare measures are obtained comparing the real observed behaviour with an hypothetical risk perception pattern induced by a more effective risk communication policy.Food Security and Poverty, Risk and Uncertainty,

Agriculture and Income Distribution: Insights from a SAM of the Italian Economy

The paper presents the results of the first SAM analysis of the agricultural sector in Italy. A SAM of the Italian economy has been properly modified in order to focus the analysis on agriculture. Two type of analysis have been carried out: (i) a multiplier analysis, and (ii) an assessment of the distributive impacts of different agricultural policies. This paper proposes also a new method for disaggregating the institutional sectors and production factors in order to analyze income distribution within the economy, with special emphasis on the agricultural sector. Main results are: (i) "fully" decoupled income supporting schemes (transfers to agricultural households) are the most equitable interventions and determine a perfect targeting of the distributive effect on the relevant institutional sectors; (ii) "partially" decoupled income supporting interventions, as the ones implemented under the current CAP, are more effective than others in indirectly (i.e., through multiplier effects) generating positive impacts on the income of agricultural households; (iii) agricultural price support interventions show less desirable effects in terms of their distributive impacts: they are less effective as agricultural income-increasing policies and their distributive impacts are biased against poorer households both in agricultural and non-agricultural sectors.Social accounting matrix, agriculture, income distribution, Italy, Labor and Human Capital, R13, R15, Q18, E25,

Distributive impacts of alternative agricultural policies: A SAM-based analysis for Italy

This paper assesses the distributive impacts of alternative agricultural policies in a SAM (social accounting matrix) framework. A SAM of the Italian economy has been properly modified in order to focus on agriculture. In doing so, a new method for disaggregating the institutional sectors and the production factors in a SAM framework has been proposed. Two types of analysis have been carried out: (i) a multiplier analysis, and (ii) an assessment of the distributive impacts of different sector policies. The main results can be summarised as follows: (i) ‘fully’ decoupled agricultural household income supporting schemes (transfers to agricultural households) are the most equitable interventions and determine a perfect targetVof the distributive effect on the relevant institutional sectors; (ii) ‘partially’ decoupled income supporting interventions, such as the ones implemented under the CAP before the Mid Term Review, are more effective than others (i.e., through multiplier effects) in indirectly generating positive impacts on the income of agricultural households; (iii) agricultural price support interventions show less desirable effects in terms of their distributive impacts: they are less effective as agricultural income-increasing policies and their distributive impacts are biased against poorer households both in agricultural and non-agricultural sectors.social accounting matrix (SAM), income distribution, Common Agricultural Policy

Preferences, trust and willingness to pay for food information: An analysis of the Italian Market

Lack of consumer trust and communication strategies are probably the main determinants of information failure in modern food markets. This study attempts to tackle these aspects affecting the quality of food information by investigating questions related to what topics are more relevant to consumers, who should disseminate trustful food information, and how communication should be conveyed. Primary data were collected both through qualitative (in depth interviews and focus groups) and quantitative research. Quantitative research was conducted by means of a questionnaire administered in 2006-2007 to a sample of Italian respondents using both a web and a traditional mail survey. Reading preferences, willingness to pay and trust towards public and private sources conveying information through a hypothetical food magazine were assessed combining factor analysis, choice modelling and a criterion-based market segmentation. The study shows that reading preferences of Italian consumers can be summarized along three dimensions: agro-food system, enjoyment and wellness. Furthermore, willingness to pay for receiving food-related information is influenced by trust towards the type of publisher, which plays also a key role in market segmentation together with socio-demographic and economic variables such as gender, age, presence of children and income. Policy implications of these findings are discussed.food information, trust, preference heterogeneity, segmentation, Italy, Food Consumption/Nutrition/Food Safety, D12, D18, D89, Q18,

Costs and Benefits of Compliance for HACCP Regulation in the Italian Meat and Dairy Sector

Food Consumption/Nutrition/Food Safety,