Prochains Séminaires
4 février 2025
11h 00 - E2.508
Karine Nyborg
“Image Preferences as a Driver of Normative Polarization”
We demonstrate how the preference to be highly regarded by others as well as oneself can drive strong polarization and segregation. Being highly regarded by someone requires conforming to that person’s normative views. We assume that if normative views move towards one extreme, image costs increase for one type of individuals but decrease for the other type. Individuals trade off image benefits against effort costs in the short run; in the long run, normative views and peer group affiliations develop endogenously. Individuals gradually adapt their normative views to those of their peers, but more reluctantly so for views harming their self-image. Over time, people may also switch social groups, seeking peers regarding them highly. The steady state is extremely polarized and segregated: each social group consists of same-type individuals who agree on the most extreme implicitly self-serving normative view. However, if normative views are partially adopted across peer groups, not only within groups, equilibrium polarization is less extreme.
Calendrier
- 4 février 2025 : Karine Nyborg (University of Oslo) - “Image Preferences as a Driver of Normative Polarization”
- 4 mars 2025 : Benoit Schmutz-Bloch (Ecole Polytechnique)
- 11 mars 2025 : Florian Oswald (University of Turin)
- 1er avril 2025 : Céline Bonnet (Toulouse School of Economics)
Organisation
Organisés les mardis de 11h00 à 12h15.
Lieu : E2.508
Organisateur : Can Askan Mavi - INRAE - can-askan.mavi@inrae.fr
Archives récentes
- 30 janvier 2025 : Christophe Gouel (PSAE) - "Carbon bias of tariffs: Are fossil fuels the culprits?”, avec Cecilia Bellora (OCDE), Lionel Fontagné (U. Paris 1) et Youssef Salib (Ecole des Ponts)
This paper revisits the existence of a carbon bias in trade policies, where dirtier sectors receive lower trade protection compared to cleaner sectors. Using a stylized general equilibrium model that accounts for greenhouse gas emissions, we confirm the presence of a carbon bias in 2019 but find it to be significantly smaller than previously estimated. The bias is mainly driven by low tariffs on fossil fuels, particularly crude oil. Further analysis reveals that domestic consumption taxes on fossil fuels in non-producing countries function as de facto tariffs. When these taxes are included in tariffs, the carbon bias shifts to a pro-environmental stance. Additionally, incorporating the finite nature of fossil fuel resources into the model reverses the carbon bias, as production becomes less responsive to tariff changes. These findings suggest reasonable doubts about the reality of this carbon bias and imply that addressing its existence in trade policies is not a policy priority compared to more impactful measures, such as directly taxing greenhouse gas emissions.
- 21 janvier 2025 : Veronica Salazar-Retrespo (Uni.Geneva) - “Cattle Supply Chains and Deforestation in Brazil”, avec Matthieu Stigler (U. Genève)
Tropical forests are crucial to the global environment, serving as biodiversity hubs, storing and sequestering carbon, yet they face severe threats from agricultural expansion. Recognizing their role in deforestation, countries like the UK, US, and EU have implemented trade policies to curb deforestation by requiring proof that the production of a set of agricultural commodities is deforestation-free. A key question is whether these policies will encourage farmers to adopt sustainable practices or instead push them toward less regulated buyers. In this paper, we ask that question in the context of Brazil’s cattle sector. First, we leverage a unique dataset on animal transport, matched with property boundaries, to document key empirical patterns of deforestation and the supply network of cattle at the farm level in the state of Pará, Brazil. Second, we build a structural model of farm-level land use decisions with an endogenous supply network. Third, guided by model-derived gravity equations, we estimate the role of existing domestic supply-chain anti-deforestation policies in shaping the trade of cattle and deforestation decisions. In the future, we aim to simulate counterfactual scenarios to quantify the potential outcomes of trade policies such as the EU’s upcoming Regulation on Deforestation-free products (EUDR).
- 16 janvier 2025 : Maxime Tranchard - "The UK Soft Drinks Levy Tax”
This paper investigates the implementation of the Soft Drinks Industry Levy (SDIL) in the United Kingdom, leveraging panel data from 2015 to 2018 to assess the policy's impacts. Introduced in April 2018, the SDIL is a targeted fiscal intervention designed to reduce sugar consumption through a price-based mechanism. Under the policy, beverages with sugar content exceeding 5g per 100ml are subject to an 18p per liter levy, with an additional 8p for products exceeding 8g, leaving part of the supply chain untouched by regulation.
While prior research has examined the immediate effects of the SDIL on consumption patterns, pricing strategies, and product reformulation—highlighting significant reformulation efforts in the pre-implementation phase—this study advances the literature by adopting a structural approach. By integrating consumer panel data across pre- and post-implementation phases, this analysis disentangles the causal effects of the levy from broader market trends. Furthermore, the structural framework enables counterfactual simulations, allowing us to assess the policy’s potential impacts in a pre-policy environment and to explore optimal taxation designs.
- 14 janvier 2025 : Martin Quaas (University of Leipzig) - “Fisheries Management from a Fisherman’s perspective: An Economic Theory”
The economics of overfishing has been largely understood since long, and proposals for economically more efficient management have been made. In particular, strong user rights in fisheries have been identified as a way towards greatly increasing efficiency and biological sustainability of fisheries. Yet, the uptake of catch shares as the primary form of rights-based fishery management has been limited and slowing down in recent years and, strikingly, the problem of overfishing has not been going down in the past decades. In this paper we develop a theory to analyze fisheries management from a fisherman’s perspective. With strong user rights, and efficiently managed stocks, fishermen receive resource rent and producer surplus. Without strong user rights, they only receive producer surplus. We study the preferred quota management from the fisherman’s perspective and find that it is strictly higher than the more efficient, rent-maximizing management. We further compare the welfare that a fisherman derives from (i) an efficiently managed fishery and (ii) a fishery under (regulated) open access. As overall efficiency is higher in the fishery with strong user rights, in principle it could Pareto-dominate the open-access fishery. In practice, however, the fisherman may be better off in the fishery under (regulated) open access. We find that even full grandfathering of resource-use rights does not guarantee a strict Pareto improvement, as some resource users will leave the sector.
- 11 janvier 2025 : Romain Fillon (PSAE) - "The Biophysical Channels of Climate Impacts"
How does regional economic activity shape regional climate impacts? Land use and land cover (LULC) change with economic activity, affecting regional climate through biophysical channels like albedo. These regional feedbacks are often overlooked in quantitative spatial models, which focus on global carbon effects. By incorporating this biophysical feedback, I find notable welfare implications for adaptation and mitigation, as it alters temperature impacts and interacts with regional adaptation. Using a dynamic-spatial model at a global 1° grid along ‘middle-of-the-road’ scenario SSP2-4.5, I estimate the welfare consequences of climate change, with agents that adapt through migration, structural change and trade. I interact intra-annual climate projections with model-consistent non-linear damage patterns on amenities and sectoral productivities. Without biophysical impacts, almost all locations experience negative welfare changes: there are no benefits to be expected from climate change in the Northern Hemisphere. Biophysical channels account for 2.4% of total welfare impacts, intensifying regressive effects of climate change on lower-income regions.
- 9 janvier 2025 : Inès Mourelon (U Paris Dauphine - PSL) - "Macroeconomic and Environmental Effects of Climate Policy Uncertainty: A Sectoral Reallocation Perspective”
This paper investigates sectoral reallocations in an economy where climate policy is uncertain. To this end, it develops a Dynamic General Equilibrium model with two sectors - a polluting one and a non-polluting one, along with climate externality and endogenous firm entry. Climate policy uncertainty stems from the possibility that the government may introduce a carbon tax in the next period. I show that, compared to a scenario without climate policy uncertainty, the probability of implementing carbon taxation prompts entrepreneurs to curtail investment in polluting firms’ entry while promoting entry into the non-polluting sector. Through general equilibrium effects, these sectoral reallocations deteriorate welfare, generate a drop in economic activity, and increase CO2 emissions. I provide additional empirical evidence through a VAR model that supports these results. Overall, this paper points out the economic and environmental costs of climate policy uncertainty.
- 19 décembre 2024 : Martin O'Connell (Wisconsin - Madison) - “ The Welfare Effects of Price Shocks and Household Relief Packages: Evidence from the European Energy Crisis ”
How should governments respond to rapid increases in the cost of living driven by shocks to the prices of staple goods? We study this question in the context of the 2022–2023 European Energy Crisis. Vulnerability to price shocks depends both on energy spending patterns – which we show vary widely and only weakly correlate with income – and substitution responses. Households responded to price rises with an average elasticity of energy consumption of 0.31, but with the top fifth of energy users having an elasticity over 50% larger than the bottom fifth. The UK government's policy response – a combination of an energy price subsidy and a universal transfer – reduced the average welfare loss from the crisis from 6% to 1% of income. However, the intervention entailed efficiency costs of £3.7bn over six months. We show that an alternative policy that bases transfers on income and past energy use, alongside a subsidy, closes 60% of the gap in social welfare between the UK’s policy and the first-best.
- 17 décembre 2024 : Claire Rimbaud (U. Paris Dauphine) - “Playing Dumb to Look Green? The Impact of Information Complexity on Attitudes Toward Information”, avec Alice Soldà (EM Lyon)
This paper investigates whether individuals use information complexity as an excuse to remain ignorant so as to behave more selfishly. We study this question in a context where individuals face a trade-off between their monetary payoff and their pro-environmental preferences. We propose that individuals use information complexity as an excuse to make self-serving mistakes, which allow them to behave more selfishly without compromising their pro-environmental image. To test this idea, we conducted an online experiment in which we varied (i) the complexity of the information regarding the environmental impact of a donation and (ii) whether there is a trade-off between participants' selfish motives and pro-environmental preferences. In line with our hypothesis, we found that participants make more mistakes when information is complex, but even more so when there is a trade-off between their monetary payoff and their pro-environmental preferences. Our findings suggest that pro-environmental individuals do 'play dumb' when doing so gives them an excuse to behave more selfishly without compromising their image.
