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In this study, we estimate the effect of a negative labour market shock on individuals’ levels of stress, anxiety, and depression. We use a dataset collected during the first wave of the COVID-19 pandemic, on a representative sample of citizens from Italy, Spain, and the United Kingdom, interviewed on three occasions. We measure stress, anxiety and depression and labour shocks using validated scales. Our research design is a standard differences-in-differences model: we leverage the differential timing of shocks to identify the impact on mental health. In our estimations, a negative labour shock increases the measure of stress, anxiety, and depression by 16% of a standard deviation computed from the baseline. [This paper has been accepted for publication in Economia Politica. The final version has gone through peer-reviewed and presents significant differences from this one.]

Commercial practices such as drip pricing, reference pricing and best-price guarantee can be used to set higher prices and mislead consumers, but protective measures can restore efficiency. In a placebo-controlled market experiment, we examined a treatment allowing for the use and misuse of commercial practices. Three additional treatments tested the effects of formal sanctions, informal sanctions and a regret nudge. We found that commercial practices led to higher prices, cheating was systematic and regret nudging was ineffective. Furthermore, formal and informal sanctions reduced both the likelihood of using commercial practices and the likelihood of cheating, leading to welfare increases.

We assess the impact on trust and trustworthiness of a governmental program to compensate victims of forced displacement. All our subjects were eligible to apply for restitution of their land in accordance with the 2011 “Bill of Victims” issued by the Colombian government. The key independent variable of our analysis is whether a subject had obtained land within this or similar programs. Our dependent variables are a subject's trust and trustworthiness to unknown others, as measured by an experimental Trust Game. We focus on interpersonal trust and trustworthiness because of their well-documented positive effect on economic development. Our design also included a treatment in which subjects voted on their most preferred outcomes in the game, as it has been shown that consultative democracy can increase mutual trust in other settings. We find that land restitution is significantly correlated with higher trustworthiness, while there is no correlation with trust. This is consistent with the idea that trust and trustworthiness tap into different aspects of individual motivations. Voting is not correlated with trust but is associated with higher trustworthiness in one of the measures, although there is no differential impact for those who were granted land. We compare the effect of having been granted land with rural and urban samples who were not victims of displacement. Overall, our results suggest that land restitution empowers victims reestablishing social capital. The evidence on the impact of political participation and its interaction with land restitution is inconclusive.

In this article, we examine the expectations of the economic outlook, fear of the future, and behavioural change during the first Covid-19 wave, for three European countries (Spain, the United Kingdom, and Italy) that have been severely hit. We use a novel dataset that we collected to monitor the three countries during the crisis. As outcome variables, we used expectations (e.g., economic outlook, labour market situation, recovery), fear (e.g., scenario of new outburst, economic depression, restriction to individual rights and freedom), and behavioural change across the following dimensions: savings, cultural consumption, social capital, and risky behaviour. We provide descriptive evidence that is representative of the population of interest, and we estimate the impact of exposure to shock occurred during the crisis on the same outcome variables, using matching techniques. Our main findings are the following: we detected systematically negative expectations regarding the future and the recovery, majoritarian fears of an economic depression, a new outbreak, and a permanent restriction on freedom, a reduction in saving and in social capital. Exposure to shocks decreased expected job prospects, increased withdrawal from accumulated savings, and reduced contacts with the network relevant to job advancement, whereas it had inconclusive effects over fears. Supplementary Information The online version contains supplementary material available at 10.1007/s11205-021-02697-5.

The article discusses whether and to what extent experiments can contribute to a research paradigm based on the study of human behaviour in complex evolving environments and on the problem of asymmetric adjustment among different components of economic system along certain trajectories, focusing on the possibility that experimental evidence may represent an external consistency check on this type of heterodox modelling. It considers the evidence on rationality of human agents, and the possibility to identify a microfoundation alternative to homo oeconomicus, discussing the evidence on humans as strong reciprocators, as trusting individuals and as embedded in social norms.

The gift exchange hypothesis postulates that workers reciprocate above market-clearing wages with above-minimum effort. This hypothesis has received inconclusive support in dyadic employer-worker relationships. We present a field-experimental test to assess this hypothesis in the context of a triadic relationship in which only one out of two workers receives a pay increase. We conjecture that inequality aversion motivations may thwart positive reciprocity motivations and analyze the interaction between such motivations theoretically. Across different treatments, the pay increase is assigned to the more productive worker in the initial work session, to the needier worker, or arbitrarily. Two additional conditions in which either none or both workers receive a bonus serve as benchmarks. We find that pay increases lead to decreased productivity. Such a decrease is most sizable in the condition where both workers receive the bonus. A post-diction of this result is that workers interpret the monetary bonus as a signal of the employer’s contentment with their effort, making them feel entitled to reduce their effort. In other treatments, receiving the pay increase while the coworker does not receive a pay increase positively affects productivity, primarily when the pay increase is due to relative productivity. This result is consistent with status-seeking preferences rather than aversion against advantageous inequality. Conversely, not receiving the pay increase while the coworker does, leads to lower productivity, primarily when the pay increase is assigned based on relative needs.

We designed and conducted an experiment of common-pool resource management involving economic and political inequality. Participants are assigned to different types differing in their endowments-Poor, Middle and Rich-and play an appropriation dilemma, with and without a voting procedure to select a quota limiting maximum extraction. Political inequality is introduced by allocating a higher likelihood to select the voted quota of a given player type: in the Ptochocracy treatment, the "Poor" type has a higher chance of setting her choice as quota; whereas in the Demarchy and Plutocracy treatments, this is true for the "Middle" and "Rich" types, respectively. These are contrasted with Democracy, where the votes of all three types are equally likely to be selected. Theoretically, each player type selfishly prefers the quota closer (i.e., one unit below) their endowment, although the lower quota would be socially desirable.We find that participants voted for the selfishly preferred quota between half and two-thirds of the time, and the introduction of these quotas decreased the absolute extraction in about 17.5%, even though participants were more likely to choose extraction levels closer to their maximum capacity (now set by the quota). Nonetheless, we do not find systematic differences in extraction patterns between treatments.

During a pandemic, the government requires active compliance by citizens. While these demands can be enforced with rewards and punishments, legitimacy allows the government to achieve the same results with greater cost effectiveness. In this article, we measure revealed legitimacy through support of three potential mitigation strategies against Covid19, when they are defended using expert endorsement, consultation by civil society, and mediation between opposing interests. We elicit approval of the supporting arguments and of the communication strategy. Our methodological choice was to randomly assign participants to either a non-conflicting priming or to one that emphasizes the risks involved, (e.g. connection between health and economy, uncertainty, and economic costs). The data come from an online experiment we conducted as part of a longitudinal study of several countries. The countries included are Italy, Spain, and the United Kingdom. The results show that the support of experts in non-controversial domains is preferred (consensus of value, low uncertainty, diffuse rents). Contrary to our hypotheses, we found that citizen deliberation is not preferred under high epistemic uncertainty, and mediation is either indifferent or not preferred under conflict of value and conflict of interest.

Households are frequently subject to income and asset shocks. We performed a lab experiment, inducing losses on a real effort task, after which we measured cognitive performance, loss aversion and cheating behavior. We found that asset losses, but not income losses, act as a cognitive load, by decreasing accuracy and increasing response times. We did not detect any change in dishonesty or loss aversion.

We report experimental results from three Colombian villages concerning the impact of a voting mechanism on interpersonal trust and trustworthiness. The vote is purely consultative in that participants are asked to declare in a secret ballot the most “appropriate” plan of action for individuals involved in a “Trust Game”. The plan of action that is most voted is then publicly announced. The mechanism is unbinding, as only the aggregate result of the voting is disclosed and it has no bearing on individual decisions. In spite of the strategic irrelevance of the announcement, we observe an increase in both trust and trustworthiness after the announcement is carried out, in comparison to the baseline condition where no voting takes place.

In this study, we test the hypothesis that the Colombian system of socioeconomic stratification (SES), which ranks dwellings from one to six to calculate utility (public services) rates, may induce discrimination. To this end, a field experiment with around 1000 participants from Bogota is carried out. The design includes a combination of a trust game and a dictator game and SES-contingent decisions. Results exclude the presence of pure preferences for discrimination, yet they confirm that low strata are associated with stereotypes of low trustworthiness. We also observe significant prosocial behavior in the low-income population, and most strikingly, we do not observe any difference in trustworthiness across different income levels.

Spanish Abstract: Treinta y seis profesores, estudiantes e investigadores de la Facultad de Ciencias Economicas y del Centro de Investigaciones para el Desarrollo CID de la Universidad Nacional de Colombia y otras instituciones, nos unimos para intentar reflexionar sobre la pandemia y la decision insospechada de aislamiento y sus reacciones tanto economicas como sociales de corto y mediano plazo. En este caso, nuestra experiencia ha sido entender ciclos economicos y empresariales, coyunturas adversas como la violencia o las guerras y analisis de crisis anteriores, ya sea relativamente cercana como la que a finales del siglo XX golpeo a Colombia o la ya lejana crisis del 29. Asi, nos unimos para abordar los efectos economicos y las politicas sociales asociadas a la pandemia del COVID-19. Este documento es el producto de dicho esfuerzo y reune los 21 documentos que salieron publicados en la alianza con El Espectador. En algunos casos se trata del mismo texto, en otros de textos ampliados. English Abstract: Thirty-six professors, students and researchers from the Faculty of Economic Sciences and the Centro de Investigaciones para el Desarrollo (CID) of the Universidad Nacional de Colombia and other institutions joined together to try to reflect on the pandemic and the unexpected decision to lockdown, and its short- and medium-term economic and social consequences. In this case, our experience has been to understand economic and business cycles, adverse situations such as violence or wars, and analyses of previous crises, whether relatively close to the one that struck Colombia at the end of the 20th century or the now distant crisis of the 29. Thus, we come together to address the economic effects and social policies associated with the COVID-19 pandemic. This document is the product of that effort and brings together the 21 documents that were published in the alliance with El Espectador. In some cases, it is the same text, in others it is expanded.

Workers who perform their occupations through platforms are becoming an increasing share of the labour force. The debate is polarized between those arguing for platforms as an instrument to increase flexibility and labour force participation, and those who see it as a further mechanism to increase Non-Standard Work (NSW). This debate is policy relevant because in either case, platform participation is associated with a difference in terms of willingness to contribute to the social security system. Nevertheless, the evidence is scant because we lack reliable data sources. In this contribution, we use a dedicated survey to estimate Willingness to Pay (WTP) for social security and estimate the causal impact of platform participation using a selection on observable strategy. We found that platform workers are less disposed to contribute to social security, although the perception of accessibility and adequacy are not affected. Results are robust to specifications and multiple hypotheses testing.

In this paper, we study the relationship between exposure to violence (ETV) and pro-social behavior using two artefactual field experiments in Bogota, Colombia. We focus on two dimensions of ETV: trauma and negative economic shock. In our first experiment, after manipulating a recall of ETV, we collate a number of decisions from a trust game and a dictator game. Using a design inspired by Falk and Zehnder (2013), we compare the measures of in-group bias at the district level. In our companion experiment, we use a similar design, which includes a Prisoners’ Dilemma, and we introduce a 2-by-2 design where we attempt to disentangle the effect of trauma and a negative wealth shock. Our results suggest that there is a positive relationship between ETV and pro-social behavior, driven by both trauma and shock. Finally, there is evidence of in-group bias at the district level in Bogota, but this is task specific. When we explore possible mediating variables proposed by the literature, we find that only beliefs seem to be affected, however the result is not robust. On the other hand, evidence is consistent with a generalized explanation based on either the dual system theory or the role of negative emotions.

The study of wealth and wealth inequality has received far less attention than income, but the increasing importance of wealth, debt and wealth inequality means closer attention must be paid to their concomitant dynamics. Policy interventions to reduce economic inequality continue to target income more than wealth, but targeting the latter – especially through taxes on financial assets – is arguably more effective.

This article explores the impact of innovation, offshoring and demand on profits and wage dynamics. Empirical analysis is performed on a panel of 37 industries (1995–2010) across five European coun...

This article critically discusses the potential of the new behavioural turn in consumer policy. It focuses on methodological and normative aspects, which are not suffi ciently discussed in the policy domain, in particular on the lessons that can be learned from randomised control trials and the normative side of the intervention. Some implications for consumer policies are drawn, proposing a new taxonomy of interventions.

In this paper we use the subset of ICT companies from the European R&D Investment Scoreboard to test the effect of change in the shareholders structure on the business orientation towards R&D. A change in one of the control participation for the business group is associated with a deepening of the R&D orientation. The effect is twice as large if the shareholder is a public institution or a risk-oriented financial institution. In the estimation, we address the role of heterogeneity by allowing for fat tails and asymmetry.

Previous research has investigated the effects of violence and warfare on individuals' well-being, mental health, and individual prosociality and risk aversion. This study establishes the short- and long-term effects of exposure to violence on short-term memory and aspects of cognitive control. Short-term memory is the ability to store information. Cognitive control is the capacity to exert inhibition, working memory, and cognitive flexibility. Both have been shown to affect positively individual well-being and societal development. We sampled Colombian civilians who were exposed either to urban violence or to warfare more than a decade earlier. We assessed exposure to violence through either the urban district-level homicide rate or self-reported measures. Before undertaking cognitive tests, a randomly selected subset of our sample was asked to recall emotions of anxiety and fear connected to experiences of violence, whereas the rest recalled joyful or emotionally neutral experiences. We found that higher exposure to violence was associated with lower short-term memory abilities and lower cognitive control in the group recalling experiences of violence, whereas it had no effect in the other group. This finding demonstrates that exposure to violence, even if a decade earlier, can hamper cognitive functions, but only among individuals actively recalling emotional states linked with such experiences. A laboratory experiment conducted in Germany aimed to separate the effect of recalling violent events from the effect of emotions of fear and anxiety. Both factors had significant negative effects on cognitive functions and appeared to be independent from each other.

Spanish Abstract: En este articulo mostramos la evolucion de la desigualdad en la region latinoamericana en el siglo XXI, analizando separadamente ingreso y riqueza para los principales paises. Consideramos las determinantes de los cambios en los indices de desigualdad y las posibles causas, analizando el potencial papel de los gobiernos de izquierda. Mostramos como la evolucion favorable del contexto internacional y el equilibrio politico en la region sean la explicacion mas consistente de los patrones observados. English Abstract: In this article we show the evolution of inequality in the latin-american region in the XXI century, considering separately income and wealth, for the largest economies. We analyze the drivers of the changes in inequality measures and the possible causes, considering the potential role of the leftist governments. We show how the evolution of the international context and the political equilibrium are consistent with the observed patterns.

In this article, we show the evolution of inequality for the largest economies of the Latin American region in the 21st century, with separate consideration of income and wealth. We analyse the drivers of the changes in inequality and possible underlying causes, including the role of the new wave of leftist governments.

This paper investigates the ‘virtuous circle’ between innovative inputs, outputs and economic performance with a three-equation model highlighting feedback loops and simultaneous relations. An empirical test is conducted of innovative expenditure, innovative sales and economic results in a sample of Italian manufacturing firms, comparing occasional and serial innovators. The data, for 1998-2007, are drawn from a rich panel of Italian firms with 20 or more employees compiled by the National Institute of Statistics, ISTAT, including three waves of Community Innovation Surveys. The model extends that developed at industry level by Bogliacino and Pianta (2013a, 2013b) and confirms those earlier findings. For the core of persistent innovators, there are complex links at play in different phases of the innovation process and in the feedbacks between economic success and sustained innovation expenditure. This article investigates the "virtuous circle" between innovative inputs, outputs, and economic performance with a three-equation model highlighting feedback loops and simultaneous relations. An empirical test is conducted of innovative expenditure, innovative sales, and economic results in a sample of Italian manufacturing firms, comparing occasional and serial innovators. The data, for 1998-2007, are drawn from a rich panel of Italian firms with 20 or more employees compiled by the Italian National Institute of Statistics including three waves of Community Innovation Surveys. The model extends that developed at the industry level by Bogliacino and Pianta (Industrial and Corporate Change, 2013a, 22(3), 649-678; Innovation and demand in industry dynamics: R&D, new products and profits, in A. Pyka and E. S. Andersen (eds), Long Term Economic Development, Economic Complexity and Evolution. Springer-Verlag: Berlin, 2013b) and confirms those earlier findings. For the core of persistent innovators, there are complex links at play in different phases of the innovation process and in the feedback between economic success and sustained innovation expenditure.

In this article, we propose an integrated view of the mechanisms supporting the Schumpeterian “engine of progress.” We investigate—at the industry level— the interconnections between three key relationships shaping the dynamics of innovation and economic performance: first, the ability of industries’ R&D efforts to turn out successful innovations; second, the ability of innovations to lead to high entrepreneurial profits; and third, the commitment of industries to invest profits in further technological efforts. We build a simultaneous three-equation model exploring the determinants of industries’ R&D intensities, innovative turnover, and profit growth, highlighting the complexity of relationships, reciprocal influences, and feedback loops. The model is empirically tested at the industry level—for 38 manufacturing and service sectors—on 8 European countries for two periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of R&D, innovation, and profits of European industries., JRC.J.2-Knowledge for Growth

This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behaviour. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. By virtue of being embedded into a setting designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted. Este artículo presenta los resultados de un experimento de laboratorio y un experimento en línea en varios países que prueba el efecto de las ecoetiquetas de los vehículos de motor en los consumidores. El estudio de laboratorio presentó una tarea de elección discreta y preguntas sobre la comprensión, mientras que el experimento en línea de diez países incluyó medidas de disposición a pagar y comprensión. Las etiquetas que se enfocan en economía de combustible o costos de funcionamiento se entienden mejor e influyen en la elección sobre el comportamiento ecológico relacionado con el dinero. Sugerimos que este efecto proviene de la contabilidad mental del ahorro de combustible. En ausencia de un marco de ahorro de costos, no encontramos un efecto similar de la información sobre emisiones de CO2 y respeto al medio ambiente. Las etiquetas no funcionan tan bien como los materiales promocionales. En virtud de estar integrados en un entorno diseñado para captar la atención, estos últimos son más efectivos. También encontramos que los automóviles grandes y caros tienden a estar infravalorados una vez que se destaca la economía de combustible. Aquest article presenta els resultats d'un experiment de laboratori i un experiment en línia en diversos països que prova l'efecte de les ecoetiquetes dels vehicles de motor en els consumidors. L'estudi de laboratori va presentar una tasca d'elecció discreta i preguntes sobre la comprensió, mentre que l'experiment en línia de deu països va incloure mesures de disposició a pagar i comprensió. Les etiquetes que s'enfoquen en economia de combustible o costos de funcionament s'entenen millor i influeixen en l'elecció sobre el comportament ecològic relacionat amb els diners. Suggerim que aquest efecte prové de la comptabilitat mental de l'estalvi de combustible. En absència d'un marc d'estalvi de costos, no trobem un efecte similar de la informació sobre emissions de CO2 i respecte al medi ambient. Les etiquetes no funcionen tan bé com els materials promocionals. En virtut d'estar integrats en un entorn dissenyat per captar l'atenció, aquests últims són més efectius. També trobem que els automòbils grans i cars tendeixen a estar infravalorats una vegada que es destaca l'economia de combustible.

Item does not contain fulltext The weight of evidence points to the advertising of food affecting food consumption, especially among children. Such advertising often promotes unhealthy foods. Current policy deliberations focus on developing effective 'protective' messages to increase advertising literacy and consequent scepticism about advertising targeting children. This study examined whether incorporating a 'protective' message in an advergame promoting energy-dense snacks would reduce children's snack intake. A randomized between-subject design was conducted in the Netherlands (N = 215) and Spain (N = 382) with an advergame promoting either energy-dense snacks or nonfood products. The results showed that playing an advergame promoting energy-dense snacks increased caloric intake in both countries, irrespective of whether the 'protective' message was present or not. These results point to the limitations of 'protective' messages and advertising literacy and provide policy makers with a rationale for extending the current prohibition of food advertising to young children in the terrestrial media to online environments. 7 p.

In this study we use a unique database covering 25 manufacturing and service sectors for 16 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets.

Law enforcement against illegal drug markets like coca leaf production have created big debate about its consequences and effectiveness. Since this enfocerment does not only affect the illegal market but also the legal ones it is then necessary to study its effects and effectiveness within a general equilibrium framework. This is the first contribution of this note. Moreover, using a unique database on Colombia we make a robust econometric check for the main results: we show that standard erradication policy have counterintuitive effects and do not reduce the production.

In this paper, we provide a generalization of the standard models of the diffusion of a new product. Consumers are heterogeneous and risk averse, and the firm is uncertain about the demand curve: both learn from past observations. The attitude towards risk has important effects with regard to the diffusion pattern. In our model, downward-biased signals to consumers can prevent the success of the product, even if its objective quality is high: a "lock-in" result. We show, in addition, that the standard logistic pattern can be derived from the model. Finally, we discuss the steady states of the learning dynamics, with regard to the multiplicity and the local stability of equilibria, and to their welfare properties.

Brazil was characterised by a marked process of trade liberalisation in the ¿90s, resulting in a dramatic increase in the volumes of exports and imports since the year 2000. Over the same period, the relative demand for skilled labour has increased substantially. To investigate whether these two simultaneous phenomena are linked is the purpose of this paper. More in particular, this study focuses on the possible impact of domestic technology, capital complementarity and trade openness on the relative demand for skilled labour in Brazilian manufacturing firms, using a unique panel database of Brazilian manufacturing firms over the period 1997-2005. The empirical evidence supports the hypothesis that technology played a role in determining the skill-upgrading of Brazilian manufacturing firms. Indeed, the estimations show that domestic technology and capital formation are complements for the skilled workers and that imported capital goods clearly act as a skill-enhancing component of trade., JRC.J.2-Knowledge for Growth