rafmacalaba/datause-encoder-data huggingface dataset:
# Behavioral Insights in Infrastructure Sectors: A Survey

George Joseph<sup>1</sup> , Sophie Ayling, Pepita Miquel-Florensa, Hernán D. Bejarano, Alejandra Quevedo Cardona Key Words: D9: Micro-based Behavioral Economics; Publicly Provided Goods, Water, Energy, Infrastructure, Development Planning and Policy JEL: D9, H4, O21, Q4 1 George Joseph, Water Global Practice, World Bank (gjoseph@worldbank.org), Sophie Charlotte Amy Ailing, Pepita Miquel Florensa, Toulouse School of Economics, (pepita.miquel@tse-fr.eu), Hernán Bejarano Department of Economics, CIDE, Mexico(hernan.bejarano@cide.edu) and Alejandra Quevedo Cardona, Universidad del Rosario (alejandra.quevedo@urosario.edu.co).

Funding for this research was provided by the Global Water Security and Sanitation Partnership (GWSP), Water Global Practice, The World Bank.
have higher operating costs as compared to the first one due to the purification and transportation costs. In each production system, two different yield levels (109t/ha/y and 218t/ha/y) were included. Although the levels of the yield considered could be theoretically plausible, such high yields have yet to be consistently obtained in practice (Schenk et al. 2008).

**Table 12: Capital and operating costs for an open pond system**

||30 g/m<sup>2</sup>/d<br>109 t/ha/y||60 g/m<sup>2</sup> <br>218 t/ha|/d<br>/y|
|---|---|---|---|---|
||Remotely<br>Supplied CO2|On-site<br>flue gas|Remotely<br>Supplied CO2|On-site<br>flue gas|
|Capital costs ($)|96,756|90,884|136,228|122,658|
|$/mt-yr biomass|887|835|626|561|
|Operating costs ($)<sup>a</sup>|19,795|14,184|21,752|19,925|
|Capital charge (15%)|14,484|13,701|20,421|18,399|
|Total annual costs ($)|34,279|27,885|42,173|38,324|
|$/mt biomass|315|256|193|176|
|$/barrel of algal oil|90|73|55|51|
|$/lt of algal oil|0.57|0.46|0.34|0.32|

Source: Benemman and Oswald (1996). Inflation adjusted to 2008.<sup>a</sup> Labor and overhead would amount to about $3,915 and $5,219 for the low and high productivity cases respectively.

More recently, and with the renewed interest on microalgae production, several widely diverging estimates of the cost of production emerged. Interestingly, almost all of the recent estimates are much higher than the numbers presented by Benemman and Oswald (1996), mostly due to the difficulty of attaining such large yields. A summary of several of the most recent estimates is presented in Figure 1.

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# rigtire 4 CONSOLIDATED NON-FINANCIAL PUBLIC SECTOR EXPENDITURE

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take advantage of a more lenient regulatory classification, or temporal shifts in sales to benefit from temporary tax rebates (Sallee, 2010). Depending on instrument design, the scale and impact of gamification can be quite considerable. The 2015 EU-wide vehicle emissions standards yielded a 14% decrease to sales-weighted emissions by official calculations. However, of these, two-thirds were estimated to be attributable gaming (Reynaert, 2021). Thus, while discretized regulation may be advantageous for simplicity and saliency, such design also creates opportunities for gaming. Recognizing this trade-off is important for designing effective price instruments.

The larger the tax, the larger the incentive to evade. This follows from common economic intuition and is borne out in practice. In Finland, importing a vehicle requires paying an import tax that is a set percent of the value of the vehicle. For used cars, the value is discounted by the vehicle’ mileage. In other words, a vehicle with high mileage is liable for lower import taxes, all else equal. However, the Finnish customs authorities, who are responsible for collecting the import tax, do not regularly verify the reported mileage, creating an opportunity for tax evasion. Comparing the reported mileage with odometer readings during subsequent inspections reveals that approximately 10% of imported used cars over-reported their mileage (Harju et al., 2020). In 2012, import taxes were reformed to also depend on carbon emissions rates. The reform saw evasion become more prevalent for cars affected by the tax hike but remain unchanged for lowemissions vehicles. This supports the intuition that higher taxes result in a greater incentive to evade. Recognizing the enforcement gap, in 2013, the Finish customs authorities acquired access to odometer readings from downstream inspections. An information campaign randomized controlled trial (RCT) showed that awareness of the more stringent enforcement was effective at reducing tax evasion.

# 3.5. Interactions with Public Transportation

Sustainable mobility requires a multi-pronged approach that involves public transportation and non-motorized travel in addition to private vehicle demand management. Price instruments on private vehicles and their use push travelers towards more sustainable and efficient choices. However, pushing can be far more effective if complemented by a pull. That is, if there are viable alternatives to private vehicles, such as high-quality public transportation or built environment designed for non-motorized travel, drivers are much more likely to change their 20
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the overall framework for the TIMES model.<sup>5</sup> We will then describe how the electricity sector is modeled within the TIMES framework.

# **2.1.1. Overall Framework for the TIMES Model**

The TIMES model is based on the reference energy system (RES). An RES refers to a system of meeting useful end-use energy demand (e.g., light, heat, electric traction, motive power etc.) in each economic sector (e.g., industrial, households) through various channels or networks that transport energy commodities (coal, oil, gas, electricity) from domestic primary energy sources or imported primary or final energy sources. Figure 1 illustrates the RES on which the TIMES model used for this study is based. Various energy consumption technologies that produce final energy to useful energy (e.g., a boiler converts natural gas to heat, a light bulb converts electricity to light, an electrical motor converts electrical energy to mechanical energy) in the demand side whereas energy production or transformation technologies (e.g., electricity power plants to produce electricity from fuels) in the supply side. Energy transportation facilities (e.g., pipelines for oil and gas, transmission lines for electricity) carry energy commodities from production locations to demand centers.

In the China TIMES model,<sup>6</sup> there are five demand sectors: agriculture, industry, commercial, residential and transportation. Energy-intensive industry sectors are further divided into sub-sectors based on technology or fuels. Altogether, the model considers 43 industrial sub-sectors and more than 400 technologies. The building sector is divided into urban residential, rural residential, and commercial categories, and energy demand is further divided into space heating, cooling, water heating and cooking, lighting and electric appliances. The transport sector is first divided into two categories: passenger and freight. The passenger transport is then divided into five types, and freight transport is divided into four types.

The TIMES model finds a mix of energy sources along with transformation/ transmission/transportation paths among the thousands of such possible mixes in such a way that the selected energy mix confirms that it is the least cost option to meet the given demand with available supply sources. While meeting projected end-use energy demand, the model satisfies all resource, technological, policy, and any other constraints specified. Thus, the model

> 5 For more detailed description of the TIMES model, please refer to Timilsina et al. (2019).

> 6 There is also a separate TIMES model for China (e.g., Chen, 2005; Chen et al. 2014). Interested readers could refer to Timilsina and Jorgensen (2018).

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- an emissions inventory, even a crude one but based on a minimal level of physical tests and measurements, to assess the relative contribution of motor vehicles to overall pollutant emissions;

- emission standards that are derived from a realistic evaluation of costs and expected compliance by vehicle manufacturers and suppliers, oil refineries and fuel distributors, and users;

- identification of specific problem areas (for example diesel-fueled vehicles), selection of appropriate countermeasures based on their costs and likely effectiveness in the context of local technical and administrative capacities, and design of a policy framework -- regulations, enforcement, and fiscal measures -- to ensure the success of control measures;

- an appropriate institutional set-up -- legislation, organization, administrative procedures, funding sources -- to implement the selected measures;

- a monitoring and evaluation mechanism to assess progress and recommend adjustments in the control program.

# **Research Priorities**

Establishing economically justified and socially acceptable motor vehicle pollution control measures is likely to prove problematic in developing countries, partly because the magnitude of the problem and its consequences are not well understood. Knowledge of the cost and effectiveness of various control measures is inadequate nor is it possible to establish the priority of reducing one pollutant relative to another, although there is a general consensus about the need to reduce lead in gasoline and sulfur in diesel fuels. Based on the findings of this study, further investigation is warranted in the following areas:

- Role of motor vehicles in urban air pollution. There is very little reliable data and empirical information on the nature and magnitude of air pollution caused by motor vehicles in developing countries. Emission inventories to assess the contribution of motor vehicles to air pollution are lacking, particularly data on vehicle kilometers of travel, speed, and vehicle emission rates. A cross-country assessment of air quality and vehicle emission standards is also needed to evaluate how these standards were determined and to propose a realistic framework for specifying standards. The proposed research would involve a cross-sectional analysis relating physical and transport characteristics to transport pollutant emissions for a representative sample of urban areas in developing countries. The main objective of this work would be to make a more accurate determination of the
the FE estimates suggest an advantage of roughly 6 percentage points, and the GMM estimates, roughly 13 percentage points.

A final piece of evidence on the importance of information is the correlation between the impact of PCs on productivity levels and competition, as proxied by the markup ratio (row (c)).<sup>16</sup> A reduction in the markup ratio, which we assume to be associated with an increase in competition and hence a reduction in management's information advantage, is associated with positive effects of PCs on productivity levels for all four specifications, although it is statistically significant only for the FE specifications. Note that the effects of any increased competition throughout the period alone are already controlled for (as part of the other reforms), hence this interaction term captures the influence of competition on the productivity effects of PCs. The magnitudes of the FE estimates are large, and suggest that, if we assume causality, then reducing the markup ratio by one standard deviation would increase the effects of PCs on productivity by at least 5 percentage points. The large standard errors for the GMM estimates, however, suggest that we should be cautious in assuming that causality runs from competition to PC effects on productivity.

Our hypothesis that PCs work better when they provide higher powered incentives is partly supported: higher firm-level wage elasticity is correlated with higher productivity, although the results are statistically significant only for the FE estimates (row (d)). If we assume causality, then a firm signing a PC with a wage elasticity of, for example, 0.66, would experience a jump in productivity levels of more than 10 16 The markup ratio is constructed based on Li (1997), which uses the same data set as this paper. See the appendix for details.

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# **1. Introduction**

_In Brazil, 80 percent of managers have ranked access to finance as a major or severe constraint. But in Kazakhstan, 20 percent of managers did. Is access to finance a bigger problem in Brazil than in Kazakhstan?_ _Not necessarily. In Brazil, all but one of the 17 possible constraints are identified as major or severe by a higher proportion of respondents than identify the top constraint as major or severe in Kazakhstan. Switching from an absolute ranking to a relative one, finance is reported as the top constraint in both countries. Looking at more objective information on access to finance, only 13% of small firms in Kazakhstan are able to access formal external finance, while half of the small firms in Brazil are able to. Indeed, productive firms in Brazil complain less about access to finance than less-productive firms. However, in Kazakhstan, productive firms are more likely to complain about a lack of access to finance than less-productive firms, raising bigger questions about the available supply of external finance and how it is allocated among firms there._ Qualitative rankings are extremely popular among policy makers as well as members of the private sector. The World Economic Forum’s Global Competitiveness Report uses subjective ratings to rank countries, as does the International Country Risk Guide (ICRG) and the Heritage’s Index of Economic Freedom. However, what is ultimately of interest is how well these rankings reflect the underlying reality and its impact on business operations, and how much weight one should put on them in formulating priorities for change. Here there is much more skepticism among economists about their reliability.

Concerns about using qualitative or subjective indicators in analysis stem from possible measurement error that could introduce bias into the results.<sup>1</sup> This could reflect differences across individuals in their willingness to report negative (or positive) responses; differences across respondents in what they use as a benchmark or yardstick in

> 1 We use qualitative or subjective interchangeably to reflect the measures are ratings of conditions.

2
with direct compensation for work as a cadre. In short, our results indicate that in rural China cadre households may have some advantage from cadre status to in gaining privileged access to jobs in businesses and economic activities managed by villages, but these may derive from either political connections or the information advantages that come along with cadre status. These jobs were usually well paid relative to farming and in high demand by villagers. According to the RCRE panel data, this is the only source of higher incomes associated with cadre status in rural China.<sup>28</sup>

**_Relationship to Returns to Communist Party Membership_** _._ Cadre status and membership in the Communist Party are closely related in rural China. First, only Communist Party members can be inducted into the village party committee. Second, although the village committee (as opposed to village party committee) does not require its members to be a Communist Party members, being a Communist Party member helps one to be nominated to the village committee. In the early period covered by this survey, when the township government appointed village cadres, it typically gave priority to Communist Party members in the village. However, since the introduction of village elections, the village committee is elected by villagers and as a result it is not necessarily comprised of Party members.

> 28 One of the potential indirect benefits of being a cadre could be that being a cadre helps the other members of the family gain access to local off-farm employment or higher wages in such employment.  If some of the benefited family members move out and form their own households and their income is no longer included in the cadre‘s own household income, then the long-term benefits of being a cadre will be understated by the income returns to cadre households shown in the paper.  Unfortunately, since the RCRE survey was conducted at the household level and did not collect data on each family member and track each family member, we are not able to examine how being a cadre affects the incomes of other family members.  However, to the extent that the family member does not move out and form his/her own household, any of the impacts of being a cadre on his/her incomes will be contained in per capita income of the cadre household.

28
Redistributing that capital mimnics the effects of privatizing assets, i.e. making them productive again.' Alternatively, it is possible to postulate that some of the lost output is prolonged and supported (hoarded?) by government out of social concerns, thus indirectly subsidizing wage earners and socialized enterprises with the prospects of a runaway fiscal deficit.

# **3.2. Taxes and The Rest of the Model**

Tax revenue consists of the major types of direct and indirect taxes - domnestic indirect taxes (sales/exciseNAT), import tariffs, export duties, payroll tax, incone tax on capital and odter income. The rest of the framework follows the standard 1-2-3 design. Imperfect substitution characterizes the competition between domestic goods and imports. This is reflected in the CES (Armington) function between domestic goods and imports (equation Al1-A13). The CMEA shock on the import side may be addressed by a rise in import prices. Personal income is the total of factor income (net of tax) from labor and capital plus transfers from the government and abroad (equation AM4). A simple Keynesian-type consumption function defines consumption at market prices (inclusive of sales tax) as a fixed proportion of personal income after tax (equation A15). Current account balance (equation A16) is the residual of imports less exports at world prices, adjusted for grants and remittances from abroad. Domestic demand (equation A 17) consists of private consumption, investment, and govemment consumption. Public savings are endogenously determined in the government budget (equation A19) as the balance of tax revenues (equation A18) plus foreign grants (exogenous) less government consumption (exogenous) and tansfer to the household (exogenous). By Walras' law, the savings-investment identity (I ! Sp + Sg + Sf) is implied slf data are available, output can also be distinguished in terms of socialized and private enterprise **s** o that the effects of privatization can be looked at more directly. It will not change the qualitative results of the paper however.

_12_ _Go: Revenue Unceriainty_
# 1. <u>Introduction</u>

The recent global financial crisis hit the Russian economy very hard, leading its GDP to contract by 7.9 percent in 2009 after registering almost 7 percent GDP growth rates in the years prior to the crisis. Moreover, the pace of poverty reduction decelerated noticeably. While the impact of economic downturns on poverty has been studied, including using micro-simulation models (Bourguignon et al, 2008, Chen and Ravallion, 2009, Ferreira et al., 2008, Ajwad et al, 2012, Nikoloski 2011, Habib et al, 2012), research on the impact of economic crises on other aspects of human development, such as education and health behavior and outcomes, have received less attention in the literature. One reason for the nascent literature studying the crisis-human development nexus is that sufficiently detailed data, which allow households to be followed over a period of several years, is scarce. The data scarcity is particularly acute in emerging economies.

Economic shocks elicit conflicting health behavioral responses depending on whether the income or substitution effects dominate. During economic crises, the income effect directly reduces consumption of privately funded medical care, private insurance and healthy behavior, while it indirectly increases psychological costs and the likelihood of poor diets. In contrast, during crises, the substitution effect lowers the (opportunity) cost of time dedicated to healthy activities (exercise, breast feeding, etc.), increases the time available to invest in individual and household health, and reduces job-related accidents and stress.

This study analyzes the relationship between income shocks experienced during the 2009 economic crisis and health and nutrition behavior. The study, therefore, provides insights into household health and nutrition behavior during crises, specifically: (i) total household consumption of food; (ii) total household out-of-pocket health expenditure; and (iii) household doctors’ visits. We use the Russia Longitudinal Monitoring Survey, which contains longitudinal data on over 2,000 Russian families spanning the period between 2007 and 2010.

We employ a difference-in-difference with propensity score matching technique to measure the impacts of the recent crisis in Russia on health and nutrition behavior. In addition, we carry out two separate robustness checks on our findings. The first check is propensity score matching (PSM).<sup>2</sup> The second check is to apply a parametric fixed effects model. We find that the results are substantively unchanged to the estimation methodology employed.

This paper contributes to the extant empirical knowledge of the crisis-human development nexus in a few, crucially important ways. The first contribution of this paper is that while past

> 2 Rosenbaum sensitivity analysis is carried out as an integral part of the PSM technique.

2