Applied Microeconomics

Research Lead: Dr. Anna Rita Bennato

The Applied Microeconomics research cluster is a vibrant team of economists, with dedicated areas of study providing research and analysis on the economic impact of firm and consumer behaviour from a variety of perspectives.

Our teamís areas of expertise include industrial organisation, behavioural economics, ecological economics and labour economics. Our research covers projects on: innovation and research and development (Dr Anna Rita Bennato, Dr David Horan), the impact of public policy (Dr Rozana Himaz, Dr Sara Le Roux), regulation and competition policy (Dr Anna Rita Bennato), environmental and ecological policy (Dr Yoko Nagase), the private and social returns in education (Dr Rozana Himaz), the dynamics of youth unemployment (Dr Maureen Pike) and ambiguity and risk in experimental economics (Dr Sara Le Roux). In our diverse range of research, we make use of alternative approaches, adopting theoretical, empirical and experimental methods.

Projects

  • International co-operation in pharmaceutical research (Dr Anna Rita Bennato, 2015)
    Looking at both technological and scientific collaborations in the pharmaceutical sector, this project explores the impact of the new legal regime on patents and scientific publications jointly signed by researchers located in different countries. This research shows that a strong protection of the intellectual property right has not increased the number of joint patents, while no impact is identified on scientific collaborations.
  • Differentiated taxation in imperfectly competitive markets. Evidence from the Irish automobile market (Dr Anna Rita Bennato, 2015)
    Before introducing a new tax or modifying an existing one, governments need to be aware of the effect yielded by their policy intervention on markets, and then consumers. Focusing on imperfect competitive markets, this project examines how a change in the taxation system causes market inefficiencies.
  • Orphanhood in Ethiopia (Dr Rozana Himaz, 2015)
    On-going research on orphans in Ethiopia, based on Young Lives data: a 15 year longitudinal survey that tracks 12000 children across Ethiopia, Vietnam, Peru and India. Rozana uses applied micro economics to isolate the impact of parental death on child schooling, health and subjective wellbeing outcomes.
  • Education economics (Dr Rozana Himaz, 2015)
    This project estimates returns to education and uses pseudo panel data to address issues of endogeneity and quantile regression techniques to test for sheepskin effects in returns to education. This work has been drawn upon in World Bank blog posts and documents.
  • A theory of the research and development (R&D) multiplier (Dr David Horan, 2015)
    Exploring the effectiveness of subsidy programs aimed at stimulating the innovation activities of private firms, this research identifies a R&D multiplier which explains variation in subsidy effectiveness in terms of underlying differences in industry structure. The model predicts that subsidy effectiveness depends on the interplay between the mode of innovation and its degree of product market fragmentation.
  • Industrial cluster policy: do firms in core or peripheral clusters benefit more from subsidies? (Dr David Horan, 2015)
    This paper, through a framework for evaluating cluster policies, finds that firms located in core clusters benefit more from (investment) subsidies than firms located in peripheral clusters due to differential crowding-out effects associated with core and peripheral investments. Whilst consistent with extant empirical studies, this model suggests peripheral subsidies succeeded in protecting peripheral firm investments from the crowding-out effects of core subsidies.
  • An experimental study on the effect of ambiguity in a co-ordination game (Dr Sara Le Roux)
    A study of the comparative statics of ambiguity in a co-ordination game. The behaviour of subjects in the presence of ambiguity is studied to determine whether they prefer to choose an ambiguity-safe option. The findings indicate that this ambiguity-safe strategy, which is not played in either Nash equilibrium or iterated dominance equilibrium, is frequently selected.
  • Dragon slaying with ambiguity: theory and experiments (Dr Sara Le Roux, 2015)
    This on-going study explores the impact of ambiguity in the best-shot and weakest-link models of public good provision. Following theoretical analysis, experiments are conducted to study how ambiguity affects behaviour in these games and whether subjects' perception of ambiguity differs between a local opponent and a foreign one.
  • Integrating economics and system dynamics approaches for modelling an ecological-economic system (Dr Yoko Nagase, 2015)
    This paper uses a systems dynamics modelling approach. This reduces the need for convenient functional forms that guarantee the existence of analytic solutions. Behavioural assumptions for economic agents and biological rules of the ecosystem can be specified with less need for simplification, and through simulations the computational exercises reveal the kinds of system outcomes that could emerge.
  • What if consumers cannot be charged for waste disposal? (Dr Yoko Nagase, 2015)
    This research explores three policy instruments that can jointly affect producerís packaging design choice: a sorting subsidy, a waste disposal charge, and a Pigouvian tax. The findings contrast the effectiveness of different policy mixes and highlight shortcomings related to the lack of waste charges as policy instruments for local authorities in the UK.
  • Substitution between different labour market groups (Dr Maureen Pike, 2015)
    In the recent recession, youth unemployment rates have been three times that of prime age groups, rather than double as in previous recessions, whilst participation rates among the 55+ group have risen. This research evaluates the extent to which this latter phenomenon is responsible for the relative deterioration in the youth employment experience.

Grants

  • ESRC Professorial Fellowship funding awarded to Dr Rozana Himaz for her research project called When the Party's Over: The Politics of Austerity in Public Services, (Grant holder: Professor Christopher Hood, Oxford University) (2011-2015)
  • Funding from Massey University, New Zealand awarded to Dr Emmanouil Trachanas for his research project called Spatial Price Transmission in Global Dairy Commodity Markets. (2015)
  • European Commission funding awarded to Dr Rehab Osman for his project on Developing a SAM/CGE Framework for Water Quality Assessment Using Satellite Account. (2013)

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