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Preference elicitation methods and equivalent income: an overview
No full textThe equivalent income is a preference-based, interpersonally comparable measure of well-being.Although its theoretical foundations are well-established, empirical applications remain limited, primarily due to the detailed data requirements on individuals' preferences across various wellbeing dimensions. This paper reviews the literature on preference elicitation methods with a focus on estimating equivalent income. We examine several survey-based methods, including contingent valuation, multi-attribute choice or rating experiments, and life satisfaction regressions. The review highlights the advantages and limitations of each method, emphasizing the considerable scope for methodological improvements and innovations.</p
Work from home and subjective wellbeing
No full textInternational audienceEveryone expects telework to ‘stick’, but will this make workers happier? On the one hand, work from home (WFH) is clearly desired by a majority of workers, as evidenced by their willingness to pay for this arrangement. This finding is supported by all choice experiments, either real, on a recruitment platform for example, or hypothetical, via surveys. But, on the other hand, working entirely from home seems to be detrimental to their life satisfaction and their mental health, as shown by difference-in-differences studies based on the COVID-19 natural experience. Is hybrid work the optimal solution, the ideal compromise between the pros (saving commuting time) and the cons (loosing social integration) of WFH? This seems to be the aspiration of most workers worldwide. Does the demand for hybrid work also reflect a trade-off between life satisfaction and job satisfaction
Money and Value: The Contribution of The Empire of Value to the Economics and Sociology of Conventions
No full textInternational audienceTrying to understand what goods are worth of is at the very heart of economists’ thinking. The answer traditionally given to this question consists in identifying a certain substance, labor, or utility, as being at its origin. The approach of the economics and sociology of conventions takes a completely different path: value is a sui generis social construct, based on monetary convention. This represents a decisive break with traditional economic approaches. Money institutes value. The power invested in money stems from its collective recognition as a purchasing power. In this sense, like language, money is a community fact; it exists only in the context of its community of use, from which it derives its power. In so doing, the proposed construction is reminiscent of Boltanski and Thévenot’s polity model: money must be seen as the “higher common principle” through which everyone is brought into relationship with others. The desire for money, rather than the search for useful commodities, is the elementary force at the heart of the functioning of commodity production. From this perspective, money can be described as “sovereign”, and the monetary community can be compared to the political community. In both cases, one can see a set of originally separate individuals building, through their association, a collective body that transcends and protects them. The monetary institution, like the state, has the nature of a collective power that the association gives itself when it constitutes itself as a social body
The Right Numeraire or the Just Weights? How to Make BCA Rational and Fair
No full textInternational audienceUnweighted benefit–cost analysis (BCA) based on aggregate willingness to pay might be, at long last, falling into disrepute, as it is widely recognized that it exhibits a bias toward the wealthy, and as alternatives are appearing more and more practicable. However, the choice of alternatives is often framed in terms of choosing an alternative metric to willingness to pay in money, such as willingness to pay in healthy life years, or a measure of subjective well-being. It is argued in this paper that (i) a simple summation of individuals’ willingness to pay in any numeraire (e.g., money, healthy life years) is bound to generate non-transitivity issues in a similar way as money-based BCA, and (ii) a metric such as subjective well-being involves distributional value judgments that are too specific to reflect the relevant spectrum in the public debate. The “orthodox” weighted BCA method, which links BCA to an underlying social welfare function, offers more flexibility and guarantees transitive choices. Fortunately, in some relevant cases, these various methods may provide similar results, and the main options currently proposed all give greater weight to the worse off in the population than does unweighted BCA
Les colonisations à l’épreuve de la comparaison: Institutions, exploitation, indépendances
No full textInternational audienceJe tiens ici à remercier Frederick Cooper, Christelle Dumas et David Todd d’avoir consacré du temps à lire et commenter mon livre, et suis honoré qu’ils lui aient trouvé quelques qualités. Même si le nombre d’années et l’effort dédiés à un travail n’offrent aucune garantie de valeur, ce livre est le produit d’une recherche de longue haleine s’étalant sur près de vingt ans. Ce travail de longue durée a été rendu possible grâce au système de recherche publique français et a impliqué une petite équipe de collègues et co-auteurs – en particulier Yannick Dupraz et Sandrine Mesplé-Somps – à qui je souhaite une nouvelle fois rendre hommage. Si ce livre améliore, comme je l’espère, notre connaissance collective de l’histoire de la colonisation française, il ne constitue qu’une étape. Il soulève ainsi de nouvelles questions, et je rejoins mes trois commentateurs dans leur souhait que d’autres travaux, en France et ailleurs, s’attaquent à celles-ci. Plutôt que de m’adresser tour à tour à mes trois collègues, j’ai pensé utile de revenir sur les thèmes qu’ils ont abordés, regroupés en quatre sections : conquête et contrôle militaire ; peuplement et institutions ; exploitation et non-développement ; décolonisations. Avant cela, je me permets toutefois quelques remarques méthodologiques.Je suis heureux qu’à la fois un historien des empires, une économiste du développement ainsi qu’un historien de la mondialisation et de l’inscription internationale de la France saluent l’approche comparatiste que j’ai adoptée entre colonies, entre empires et entre période
Accueillir les jeux olympiques rend-il heureux ?
No full textInternational audienceUsing a panel survey of 26,000 people living in London, Paris and Berlin during the summer months of 2011, 2012 and 2013, we exploit the quasi-natural experience of choosing London as host city. We follow a difference-in-differences approach to determine the effect of hosting the 2012 Summer Olympic Games.Our results show that the Summer Games increased Londoners’ satisfaction and happiness in the short term (i.e. during the Olympic period), particularly around the opening and closing ceremonies. The beneficial effect on Londoners is quite significant, but the monetary equivalent of this gain in terms of subjective well-being remains well below the actual cost of the event. However, the conclusion is different, if we assume that the hedonic effect extends to the whole of the UK and not just to the city of London.À l’aide d’une enquête de panel auprès de 26 000 personnes résidant à Londres, Paris et Berlin pendant les mois d’été de 2011, 2012 et 2013, les auteurs exploitent l’expérience quasi naturelle que constitue le choix de Londres comme ville d’accueil. Ils suivent une approche en différence de différences, afin d’identifier l’effet d’accueillir les Jeux olympiques (JO) à l’été 2012.Leurs résultats montrent que les JO d’été ont accru la satisfaction et le bonheur des Londoniens à court terme (c’est-à-dire pendant la période olympique), en particulier autour des cérémonies d’ouverture et de clôture. L’effet bénéfique sur les Londoniens est assez important, mais l’équivalent monétaire de ce gain en bien-être subjectif reste bien inférieur au coût réel de l’événement. Cependant, la conclusion est différente, si l’on suppose que l’effet hédonique s’étend à l’échelle du Royaume-Uni et non à la seule ville de Londres
Bank's skin-in-the-game and hold-up by illiquid firms: strategic bargaining, dynamic inconsistency and credit constraints
No full textThe loan literature analyzes the hold-up problem from the bank monopolistic information perspective, but if only the firm can fully repay the bank, the loan relationship is actually a bilateral monopoly. Then, if a firm borrows short to finance a long-term project, non-cooperative bargaining occurs at loan renewal. If, regardless of the firm's second-period quality, the perfect equilibrium partition derived from this bargaining grants the bank less than the break-even condition, she declines to lend ex-ante.That is, expected hold-up by the firm induces credit constraints. If the firm gets more by defaulting than by borrowing from another bank, the initial bank cannot break even by filing for the firm bankruptcy; that is, the bank has a weak outside option. Then, even if this option is binding, the previous credit constraints result holds. Such hold-up by illiquid firms provides a new foundation for long-term lending to finance long-term projects.</p
Independent media, propaganda, and religiosity: Evidence from Poland
No full textInternational audienceExploring a drastic change in media landscape in Poland, we show that mainstream media can significantly affect religious participation. After nationalist populist party PiS came to power in 2015, news on state and private independent TV diverged due to propaganda on state TV, resulting in a switch of some of its audience to independent TV. Municipalities with access to independent TV continued to follow a long-term secularization trend, while municipalities with access only to state TV experienced a reversal of this trend. An online experiment sheds light on the mechanisms underlying the effect of exposure to independent news on religiosity
Can Firm Subsidies Spread Growth?
No full textHow do firms diffuse resources and do they spillover outside headquarter intensive areas? We show R&D subsidies induce French firms to hire new workers, often in new establishments and commuting zones. Using subsidy induced labor demand shocks and past employment patterns, we estimate a within industry spillover elasticity of .26 to non-subsidy firms, rising to .35 for openings outside of headquarter areas. Spillovers are also significant across firm branches and for firms. While subsidies are nominally awarded to headquarters, firms expand to distribute spillovers more broadly
The Economics of Informality: The Financing of the Informal Economy, criminal activities and nonregulatory capital
No full textThe coexistence of formal, informal, and criminal sectors in developing economies presents a complex challenge for policymakers seeking to promote sustainable growth and development.Foreign capital inflows can play a significant role in influencing the dynamics of these economic sectors, with the potential to either enhance or hinder economic progress. This paper develops a theoretical model that examines how a small open economy receives and allocates foreign capital across these distinct sectors. Our model uniquely incorporates mechanisms for the detection and penalization of capital flows directed towards the informal and criminal sectors, assessing the risks and regulatory responses associated with these investments. Moreover, the model posits that the criminal sector exerts a rent-extracting impact on the productive sectors, siphoning a fraction of their outputs.Numerical simulations reveal that stringent enforcement of penalties and effective detection mechanisms can substantially diminish the criminal sector's influence while simultaneously promoting growth within the formal sector. Striking a balance in regulating the informal sector is crucial, as over-regulation can stifle entrepreneurial spirit while under-regulation may not adequately curtail the negative externalities associated with informal economic activities.Differentiated policies that clearly distinguish between informal and criminal activities are more effective.The model further identifies an inverse relationship between the rents extracted by the criminal sector and the stringency of policies targeting capital flows into the criminal and informal sectors.There is a trade-off between the beneficial impacts of control policies on the formal sector and their detrimental effects on the informal sector, prompting the need for optimal regulation levels. When the formal sector is less exposed to the criminal sector, there tends to be an increase in formal output and a reduction in both informal production and criminal activities, leading to a decrease in optimal Gross National Product (GNP). This phenomenon underscores the diminishing returns to scale and highlights the complex interactions between sectorial productivity and criminal interference.These findings underscore the necessity for targeted and nuanced policy measures that can adeptly manage the intricate relationships between different economic sectors in the presence of foreign capital. By strategically regulating and guiding these capital flows, governments can enhance economic stability and promote inclusive growth.La coexistence des secteurs formel, informel et criminel dans les économies en développement représente un défi complexe pour les décideurs politiques qui cherchent à promouvoir une croissance et un développement durables. Les entrées de capitaux étrangers peuvent jouer un rôle important dans l'influence de la dynamique de ces secteurs économiques, avec le potentiel d'améliorer ou d'entraver le progrès économique. Cet article développe un modèle théorique qui examine comment une petite économie ouverte reçoit et alloue les capitaux étrangers entre ces différents secteurs. Notre modèle intègre de manière unique des mécanismes de détection et de pénalisation des flux de capitaux dirigés vers les secteurs informel et criminel, évaluant les risques et les réponses réglementaires associés à ces investissements. De plus, le modèle postule que le secteur criminel exerce un impact d'extraction de rente sur les secteurs productifs, siphonnant une fraction de leurs outputs.Les simulations numériques révèlent qu'une application stricte des pénalités et des mécanismes de détection efficaces peuvent considérablement diminuer l'influence du secteur criminel tout en favorisant simultanément la croissance au sein du secteur formel. Il est crucial de trouver un équilibre dans la régulation du secteur informel, car une régulation excessive peut étouffer l'esprit d'entreprise tandis qu'une régulation insuffisante peut ne pas suffire à réduire les externalités négatives associées aux activités économiques informelles. Des politiques différenciées qui distinguent clairement entre les activités informelles et criminelles sont plus efficaces.Le modèle identifie également une relation inverse entre les rentes extraites par le secteur criminel et la rigueur des politiques ciblant les flux de capitaux vers les secteurs criminel et informel. Il existe un arbitrage entre les impacts bénéfiques des politiques de contrôle sur le secteur formel et leurs effets néfastes sur le secteur informel, ce qui incite à la recherche de niveaux de régulation optimaux. Lorsque le secteur formel est moins exposé au secteur criminel, on observe généralement une augmentation de la production formelle et une réduction de la production informelle et des activités criminelles, ce qui entraîne une diminution du produit national brut (PNB) optimal. Ce phénomène souligne les rendements d’échelle décroissants et met en évidence les interactions complexes entre la productivité sectorielle et l'ingérence criminelle.Ces résultats soulignent la nécessité de mesures politiques ciblées et nuancées qui peuvent gérer adroitement les relations complexes entre les différents secteurs économiques en présence de capitaux étrangers. En régulant et en orientant stratégiquement ces flux de capitaux, les gouvernements peuvent améliorer la stabilité économique et promouvoir une croissance inclusive