Hiring Incentives and Labour Force Participation in Italy

A long-standing economic tradition maintains that labour supply reacts to market tightness; its sensitivity to job quality has received less attention. If firms hire workers with both temporary and open-ended contracts, does participation increase when more permanent jobs are available? We investigate this relationship within a policy evaluation framework; in particular, we examine how labour supply reacted in Italy to a recent subsidy in favour of open-ended contracts. This subsidy increased labour force participation by 1.4% in 2001 and 2.1% in 2002. This increase was concentrated on males aged 35-54, with a low or at most a secondary schooling level.

Looking for free riding: Energy efficiency incentives and Italian homeowners

We examine the effect of energy efficiency incentives on household energy efficiency home improvements. Starting in February 2007, Italian homeowners have been able to avail themselves of tax credits on the purchase and installation costs of certain types of energy efficiency renovations. We examine two such renovations—door/window replacements and heating system replacements—using multi-year cross-section data from the Italian Consumer Expenditure Survey and focusing on a narrow period around the introduction of the tax credits. Our regressions control for dwelling and household characteristics and economy-wide factors likely to influence the replacement rates. The effects of the policy are different for the two types of renovations. With window replacements, the policy is generally associated with a 30 % or stronger increase in the renovation rates and number of renovations. In the simplest econometric models, the effect is not statistically significant, but the results get stronger when we allow for heterogeneous effects across the country. With heating system replacements, simpler models suggest that the tax credits policy had no effect whatsoever or that free riding was rampant, i.e., people are now accepting subsidies for replacements that they would have done anyway. Further examination suggests a strong degree of heterogeneity in the effects across warmer and colder parts of the country, and effects in the colder areas that are even more pronounced than those for window replacements. These results should, however, be interpreted with caution due to the low rates of renovations, which imply that the effects are estimated relatively imprecisely.

The incentives of a resource owner: Evidence from a private oyster fishery

European flat oyster Ostrea edulis fisheries were once abundant around the UK coastline. The sole remaining productive O. edulis fishery in Scotland is in Loch Ryan. This fishery has been privately owned and managed by a single family since 1701. Economic theory predicts that ownership, whether public or private, is a necessary condition for rational fishery management. In this paper, a series of four leases and a licence are examined, covering an 85-year period over the 20th and 21st century, to examine whether the management of the Loch Ryan fishery conforms to the expected norms of rational management. The leases show that, over this period, the owners appear more willing to expend resources on regulating tenant behaviour, supporting the conclusion that successive generations of owners developed an evolving sense of what "rational management" might require. The results of this study could inform the management of other fisheries - both public and private - by emphasising the importance of learning from experience.

Incentives and rewards: what do adult populations truly want? Insights from the physical activity loyalty (PAL) scheme

Background
Trials depend on good recruitment and retention, but efforts to improve these have had varying success. This may be due to inadequate understanding of what participants would value in return for taking part. An opportunity arose in one trial to investigate the incentives that might help recruit and retain participants to another.

Aim
To determine what adults value as an incentive for involvement in a trial.

Methods
In the PAL Scheme, employees used a ‘loyalty card’ to monitor their physical activity over 12 weeks. The incentive group (n=199) collected points and received rewards for physical activity (1 minute = 1 point, max: 30 pts/day). A comparator group (n=207) self-monitored their physical activity only. Points could be redeemed as retail vouchers. 17 different incentives were available, from 75 pts (£2.50, a sandwich) to 1800 pts (£60, 1 month gym membership).

Results
148 of the 199 intervention participants used their card at least once, earning a mean of 374 pts. 121 earned sufficient to collect a reward and 76 redeemed points for vouchers but only 48 exchanged the vouchers for rewards. The most popular reward was not that of highest monetary value: two cinema tickets (300 pts, £10).

Conclusions
The value that participants place on a reward might be more important than its monetary value. Some might appreciate receiving the voucher, without spending it. In choosing incentives to boost trial participation, it may help to allow people to choose from a variety of rewards, rather than reimbursing in money.

Reforms, incentives, welfare and productivity growth in Chinese wheat production

Following the 1978 rural reform, a series of agricultural reforms were introduced in China with an aim to create incentives for the farmers to produce more. However, the nineties’ reforms towards liberalization eventually resulted in a huge drop in agricultural production, which apparently motivated the grain self-sufficiency program in 1998. For a dataset that covers wheat production during these reforms, we examine how and to what extent these reforms affected the Total Factor Productivity (TFP) and the welfare of wheat farmers in China, both at the national and at the regional level. We find that although the nineties' price reforms led to a relatively faster growth of the incentivized TFP of wheat production, they failed to improve profits vis a vis welfare for the farmers. A series of weather shocks in the early nineties resulted in a scarcity of cultivable land and a shortage of agricultural labour, which eventually led to a sharp increase in their relative prices. The introduction of grain self-sufficiency program stabilized these agricultural prices but destroyed the growth in TFP for most regions. However, this reform resulted in some improvement in farmers’ welfare. Wheat farmers in China therefore experienced a trade off between productivity and welfare; competition boosted their productivity and regulation improved their welfare. Not only these findings add a completely new set of results to the existing literature, they can also form a strong basis for future agricultural reforms in China.

Innis Lecture: Can the Theory of Incentives Explain Decentralization?

This survey presents within a single model three theories of decentralization of decision-making within organizations based on private information and incentives. Renegotiation, collusion, and limits on communication are three sufficient conditions for decentralization to be optimal.

Perfectionism, Economic (dis)Incentives, and Political Coercion

May a government attempt to improve the lives of its citizens by promoting the activities it deems valuable and discouraging those it disvalues? May it engage in such a practice even when doing so is not a requirement of justice in some strict sense, and even when the judgments of value and disvalue in question are likely to be subject to controversy among its citizens? These questions have long stood at the center of debates between political perfectionists and political neutralists. In what follows I address a prominent cluster of arguments against political perfectionism—namely, arguments that focus on the coercive dimensions of state action. My main claim is simple: whatever concerns we might have about coercion, arguments from coercion fall short of supporting a thoroughgoing rejection of perfectionism, for the reason that perfectionist policies need not be coercive. Thlist challenges to this last claim.

Economic Incentives and Liberal Equality

In order to assess to the degree to which the provision of economic incentives can result in justified inequalities, we need to distinguish between compensatory incentive payments and non-compensatory incentive payments. From a liberal egalitarian perspective, economic inequalities traceable to the provision of compensatory incentive payments are generally justifiable. However, economic inequalities created by the provision of non-compensatory incentive payments are more problematic. I argue that in non-ideal circumstances justice may permit and even require the provision of non-compensatory incentives despite the fact that those who receive non-compensatory payments are not entitled to them. In some circumstances, justice may require us to accede to unreasonable demands for incentive payments by hard bargainers. This leads to a kind of paradox: from a systemic point of view, non-compensatory incentive payments can be justified even though those who receive them have no just claim to them.