Public Good Component Research Articles

Core functions, visitor friendliness and digitalisation: a comparative analysis of corporate museums’ performance

We exploit a rich dataset on Italian museums to investigate whether corporate museums’ service provision is quantitatively different from the provision by the rest of private museums and by the three different types of Italian publicly owned museums (whose classification is by organisational mode: traditional, autonomous, and outsourced). We consider service provision in the dimensions of core museum functions (research, collection management, dissemination) and visitor friendliness, and we also focus on digital services. We use count data models estimation methods and include controls referring to museums’ characteristics and contextual factors to account for possible confounding effects. Our analysis reveals that corporate museums do not provide more core services than other museums, as expected given the public good component of this category of services. Contrary to expectations, we find that corporate museums are not among the museums providing the largest number of services enhancing visitor friendliness. Finally, corporate museums provide more digital services than traditional public museums and private museums owned by churches, and not less than other museum types. We argue that this latter evidence may come from their interaction with the parent firm. Corporate museums’ higher levels of digitalisation may be seen as the effect of a knowledge spillover between the more profit-oriented business world and the non-profit cultural sector.

A field experiment on fundraising to support independent information

Voluntary contributions solicited via fundraising campaigns can be a useful tool to finance high quality and independent news media without restricting readership, thus guaranteeing maximum diffusion. We conduct a field experiment with the Italian online information site lavoce.info to explore what type of message is more effective in eliciting readers’ willingness to contribute. We compare messages stressing the public good component of financing news or private benefits for donors. In addition, we test the effect on donations of including information about the tax allowance associated with contributions. While stressing the public good or private benefit component of donating to a media outlet does not lead to a statistically significant difference in terms of revenues raised, information about tax allowance reduces overall contributions, due to a reduction in the number of (small) donors.

Satisfaction and preferences in a legality social dilemma: Does corporate social responsibility impact consumers’ behaviour?

We investigate players’ preferences in a multiplayer prisoner's dilemma by comparing results from satisfaction-based and a choice-based approach by means of a laboratory experiment. The experimental design tests the effects of the legality rating frame on consumers’ choice between products from producers labeled by the legality rating and products by unlabeled producers. Both approaches provide strong evidence of preference heterogeneity, with players who cooperate above median being less affected in their choice by monetary payoffs vis-à-vis the public good component. The empirical findings support the hypothesis of our theoretical model that (part of the) players have, in addition to the standard self-interest component, an other-regarding preference argument that is further satisfied in the legality frame plus conformity design.A policy suggestion stemming from our experiment is based on the fact that corporate social responsibility legality frames and culture have a significant effect on an important portion of consumers. These consumers reveal that the often-declared willingness to pay for socially, environmentally and legally responsible features of products is confirmed by actual purchases of more expensive responsible products. Governments should therefore promote the creation of legality rating schemes with well-defined pre-established rules such as in the Italian case.

Pay-What-You-Want to Support Independent Information - A Field Experiment on Motivation

Pay-what-you-want schemes can be a useful tool to finance high quality and independent news media without restricting readership, therefore guaranteeing maximum diffusion. We conduct a field experiment with the Italian information site lavoce.info to explore how to structure a campaign in a way that maximises readers' willingness to contribute. We compare messages stressing two possible motivations to contribute, namely the public good component of the news or the importance of the individual contributions. We also test the effect of including information about the tax allowance associated with donations. While the particular motivation stressed does not have a significant impact, information about tax allowances surprisingly reduces overall donations, due to a reduction in the number of (small) donors. Stable unsubscriptions from the newsletter suggest that the campaign does not have an adverse effect on readers.

Political Institutions, Resources, and War: Theory and Evidence from Ancient Rome

How does the size of the governing coalition affect the amount and type of violence in society? This paper combines models of the selectorate with stationary bandits to predict that larger coalitions substitute away from fighting for private goods (such as plunder) towards fighting for public goods (such as defense), but does not necessarily reduce the overall scale of fighting. To test this idea, I empirically investigate how Rome's transition from Republic to Empire affected military patterns. I find that the Republic engaged in more battles overall and that Republican battles had more of a public good component. Overall, this paper furthers our empirical knowledge about the ancient world and brings the data to bear on contemporary debates about the causes of peace and war.

Principles-Based Regulation Blueprint for A New Approachh for the Internal Agricultural Market

The European agricultural sectors and the Common Agricultural Policy (CAP) face the triple challenge of productivity increase to meet increasing demands for food, fibre and energy, pressing public policy issues regarding public health and nutrition and the public good components of agricultural land use (emissions, soil protection, landscape, biodiversity, water, climate change), and adaptation to a changing institutional environment with liberalised markets and integrated transnational value chains. The current governance arrangements for the sector are criticised for their complexity, implementation gaps, inefficiency and ineffectiveness. This paper discusses whether a shift towards a different regulatory approach – principles-based regulation (PBR) in the form of the “new approach” – could offer an avenue for fundamental improvements. After reviewing the problems in the current CAP and explaining the broader “new approach” to regulation, we discuss its applicability to the internal agricultural market. We describe how a “new approach” to the internal agricultural market as application of PBR could look like and how PBR could be linked to the farm payments made under the CAP. We finally reflect on the necessary legal competence basis and on the potential of PBR to address the major challenges facing the European agricultural sector and the CAP.

Is Income Redistribution a Form of Insurance, a Public Good or Both?

This paper is an empirical study of what motivates net contributors to support redis- tributive policies. While studies in the area have tended to consider broad measures of inequality and support for redistribution, we focus on a single, salient relationship between local unemployment rates and demand for spending on unemployment benefits. Using a particularity of the Spanish labour market we estimate how workers? stated preferences for unemployment benefits spending respond to changes in the local unemployment rate. We then decompose this response into the part explained by risk aversion, and thus demand for insurance, and the part explained by the public good nature of the redistribution. Our results suggest that increases in local unemployment rates lead to increased demand by workers for unemployment benefits spending. Moreover, our results are consistent with an insurance motive driving this relationship but provide little support for any public good component. Our results suggest that studies of the relationship between inequality and demand for redistribution might benefit from considering both the source and measure of the inequality and the instrument of redistribution.

Happiness and Preferences in a Legality Social Dilemma: Comparing the Direct and Indirect Approach

We investigate players’ preferences in a multiplayer prisoner’s dilemma by comparing results from a direct (satisfaction based) and an indirect (choice based) approach. Both approaches provide strong evidence of preference heterogeneity, with players who cooperate above median being less affected in their choice by monetary payoffs vis-a-vis the public good component. The combination of a legality frame plus a conformity information design reduces further the relative preference (satisfaction) for the non-cooperative choice for such players. Our findings support the hypothesis that (part of the) players have, in addition to the standard self-interest component, an other-regarding preference argument that is further satisfied in the legality frame plus conformity design.

Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods

Green goods such as recycled paper stationary or carbon-neutral flights provide increasingly popular examples of impure public goods. Motivated by theoretical treatments of green goods as a bundle of private and public characteristics in proportions fixed by the provider, we design an experiment with two linked treatments to test how the presence of impure public goods affects behaviour towards public good causes. We set parameters, such that from a standard economic perspective the presence of the impure public good is behaviourally irrelevant. In a treatment where the impure public good provides only small contributions to the public good, we observe that on aggregate pro-social behaviour is lower in the presence of the impure public good. On the contrary, in the treatment where the impure public good is more generous towards the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We observe that impure public goods, that are theoretically irrelevant and are mostly self-interested, may hinder pro-social behaviour and look for explanations in social psychology, such as the phenomenon of thoughtful anchoring, motivated reasoning and reluctant altruism. The results from this experiment question the role of green goods in enhancing environmentally friendly behaviours.

Revisiting the Impact of Order Effects on Sensitivity to Scope: A Contingent Valuation of a Common‐Pool Resource

AbstractWhile many studies have employed stated preferences methods to estimate the value of non‐market ecosystem goods and services, contingent valuation (CV) still generates a significant amount of criticism. Besides ethical concerns, two of the key criticisms relate to insensitivity to scope and order effects. We examine the expectation that the presence of order effects in stepwise disclosure procedures affects the degree of scope sensitivity. We use data from a CV exercise asking farmers in Southern Spain to value two different levels of guarantee of water supply for irrigation in a context of water scarcity. We find that despite order effects being present, they do not affect the existence or the degree of sensitivity to scope. We conclude that, in the light of the mixed evidence found in the literature and the results of our study, it does not seem justified to ascribe order effects and their connection with sensitivity to scope to study design alone (e.g. step‐wise versus advanced disclosure, top‐down versus bottom‐up). The nature of the environmental good under valuation also matters. Our study of irrigation water as a common‐pool resource suggests that, when clear private benefits also exist, these appear to override any ‘good cause dumping effect’ that might arise from the public good component.

Public Health and the Regulatory State

Public health has moved from the public good component of health to everything related to health and, then, to everything related to society. If we take public health in its wide, total, social sense, it presumably explains or justifies much of the regulatory state. Virtually all state activities contribute directly or indirectly to some citizens’ “physical, mental and social well-being” (as the World Health Organization’s definition says). Public health requires social engineering, which cannot be achieved without controlling the lifestyles that the Philosopher King doesn’t like. Controlling lifestyles cannot be done without regulating the businesses that would allow people to satisfy their sinful preferences, and without preventing these people from circumventing the controls through black markets or other violations of government regulation.

Powering Up Developing Countries through Integration?

Power market integration is analyzed in a two-country model with nationally regulated firms and costly public funds. If the generation costs between the two countries are too similar, negative business stealing outweighs efficiency gains so that the subsequent integration welfare decreases in both regions. Integration is welfare enhancing when the cost difference between two regions is large enough. The benefits from export profits increase the total welfare in the exporting country, whereas the importing country benefits from lower prices. In this case, market integration also improves incentives to invest compared to autarky. The investment levels remain inefficient, however, especially for transportation facilities. Free riding reduces incentives to invest in these public-good components of the network, whereas business stealing tends to decrease the capacity to finance new investment.

Powering Up Developing Countries Through Integration?

Power market integration is analyzed in a two-country model with nationally regulated firms and costly public funds. If the generation costs between the two countries are too similar, negative business stealing outweighs efficiency gains so that, subsequent to integration, welfare decreases in both regions. Integration is welfare enhancing when the cost difference between two regions is large enough. The benefits from export profits increase the total welfare in the exporting country, whereas the importing country benefits from a lower price. In this case, market integration also improves incentives to invest compared to autarky. The investment levels remain inefficient, however, especially for transportation facilities. Free riding reduces incentives to invest in these public-good components of the network, whereas business stealing tends to decrease the capacity to finance new investment.

Economic performance of exotic dairy cattle under smallholder conditions in the marginal zones of Kenya using three analytical approaches

Smallholder exotic dairy cattle have been adopted in the dry marginal zones of Kenya from the high potential areas over the last two decades contrary to the opinion of experts. The objective of this study therefore was to evaluate the economic performance of this dairy establishment in the marginal zones. Three approaches were used for the evaluation: the stochastic cost frontier to determine inefficiencies and the causative institutional and socio-economic factors; cost-factor demand systems; and the supply response analyses to determine the elasticity estimates of policy variables. The results from these approaches are supplementary and seem to support the need for government interventions in institutional and socio-economic factors that have a high public good component in order to expand dairy establishment in the marginal zones.

Managing tourism products and destinations embedding public good components: A hedonic approach

Decision making by tourism firms' managers and public policymakers is complex for many reasons. One of them is that many tourism products embed a combination of multiple public (external to the decisions of individual firms, related to location and essentially non-rival) and private attributes. Since tourists get satisfaction from each of the components of the product variety bought, managers face the daunting task of putting together, promoting and pricing a bundle of heterogeneous components. This paper draws on hedonic pricing literature to obtain insights (beyond making correct pricing decisions) for tourism firms' managers and public policymakers when dealing with products and destinations embedding public good components. An application to coastal hotels in tourism destinations of Catalonia is presented.

Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods

An impure public good is a commodity that combines public and private characteristics in fixed proportions. Green goods such as dolphin-friendly tuna or green electricity programmes provide increasingly popular examples of impure public goods. We design an experiment to test how the presence of impure public goods affects pro-social behaviour. We set parameters, such that from a theoretical point of view the presence of the impure public good is behaviourally irrelevant. In a baseline setting, where the impure public good provides only small contributions to the public good, we observe that on aggregate pro-social behaviour, defined as total contributions to the public good, is lower in the presence of the impure good. Some individuals do not alter their decisions, but roughly two fifths of subjects make a lower contribution to the public good in the presence of the impure public good. On the contrary, in the case where the impure public good favours the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We conclude that the presence of green goods which have only a small environmental component may reduce pro-environmental behaviour.

Subjective Well-Being and Household Factors in South Africa

This paper uses a household surveyfrom South Africa to estimate a model ofsubjective well-being based upon poverty andhousehold characteristics including housing,sanitation, and transportation. Following Sen,we allow for factors in addition to income andwe begin to incorporate functionings andcapabilities as determinants of well-being. This study finds that important differencesexist among groups based upon their economicstatus. For the poorest quartilestransportation and housing play the mostimportant role in determining well-being, whilefor the richest quartiles, sanitation, water,energy, education and health are relativelymore important. These results have importantpublic policy implications because many of thefactors affecting well-being have large publicgood components. In addition, these resultscould be used to help governments focus aid inorder to improve well-being.

Not‐For‐Profit Provision Of Public Services

Not-for-profit firms are greatly over-represented in the childcare, medical care, education and care for the aged sectors where service providing workers, as well as purchasers, seem to care about the level or quality of service being provided. Since all individuals who care about service levels receive non-excludable benefits, these services have a public good element. Such care can be used to motivate employees to perform tasks beyond their strict job description. But such care only motivates effort if workers believe it affects the final level of provision. Existing theories suggest that nonprofit firms should arise in sectors where it is difficult for the purchaser to contract with the provider of the good or service sold.' Nonprofits are, indeed, usually found in the provision of services, where this type of contract is difficult to specify, but most service sectors are exclusively provided by for-profit firms, whose concern for their reputations ensures delivery of quality service. Existing theories of nonprofits based on contracting purchase difficulties cannot satisfactorily explain why reputations do not similarly work for for-profit firms in sectors where nonprofit firms are widespread. This paper is motivated by the observation that nonprofits are highly concentrated in the delivery of caring services where the service provided often has a public good component. Examples of such services are childcare, medical care, education and care for the aged. For multi-country evidence on this, see RoseAckerman (1996, Figure 2). In such sectors, service providing workers, as well as purchasers, often have a civic-minded interest in service and consider the level or quality of service important. It is posited here that this is an important distinction between these services and the vast majority of others such as: financial services, insurance, professional services etc., where much less civic-minded care exists. The paper demonstrates that nonprofit firms are more effective than for-profit firms in obtaining care motivated effort, in addition to pecuniarily motivated ef

Environmental improvement with economic development through public information provision

This paper presents the public provision of information as a policy tool both for managing water use and for encouraging the development of the agricultural sector. It demonstrates that there is a theory-based justification for the use of public weather information systems as an environmental policy tool if the following two conditions hold: 1. Agricultural production systems are information intensive, and 2. information has public good components. It is found that public provision of weather information can reduce wasted water and increase agricultural output and economic viability, providing a tool that simultaneously addresses concerns about development and the environment. Lessons learned from the impact of a weather information system in California are reinterpreted for a similar system in the developing country context of Mexico.

Forestry Managers’ Perceptions of the Feasibility of Incorporating Non-Market Value Estimates into Financial Environmental Reporting

There is currently considerable interest in environmental economic valuation methods because of their importance in policy development and Litigious issues. Several accountants have recently advocated these valuation techniques within accounting and reporting frameworks. Environmental accounting can incorporate financially quantified environmental externalities into conventional reporting systems, so that financial statements communicate the commercial and environmental performance of an organisation to its stakeholders to allow more fully-informed decisions. This paper examines the feasibility of developing a financial environmental reporting system for an Australian public sector forestry organization. Data collected with the assistance of the organization were analysed using descriptive and inferential coding. Reactions of forest managers to the introduction of environmental reporting, and their implementation experience, were examined. Potential barriers to the reporting system include a lack of funding, internal resistance to economic valuations due at least in part to low knowledge levels in relation to non-market valuation methods, stakeholder resistance, and the absence of recognised environmental indices against which to report. Potential benefits include capacity to report on sustainability of forest management, and information with which to negotiate settlements with powerful stakeholders and to seek funding for public-good components of operations.