Projekty badawcze

Consumers' preferences for demand side management in Poland

UMO-2017/25/N/HS4/01458 - PRELUDIUM

In Poland, year-after-year there is an increase in electricity demand. Technical constraints and the necessity to shut down old plants cause the problems for the Electrical System: power shortages and difficulties with balancing supply and demand. Electric Power Efficiency is high on the political agenda, what is expressed in regulations. The proposition that can make the system secure is the control of consumption. Demand Side Management (DSM) is a method to control the demand for electricity. It consists in the modification of consumer demand of electricity through various methods used by the distributor. DSM is not a popular approach in Poland. There is a need for investigating demand side flexibility and the results of DSM programs.

The main objective of the study is to evaluate the value consumers put in the change of their habits connected with electricity use (e.g. shifting consumption in time) and the impact of social norms of this value. It will examine the impact of social norms on the willingness to accept (WTA) energy demand management programs: external control and sharing of information about electricity usage. The study will evaluate potential disutility associated with the introduction of DSM. It will be the first research about consumers’ preferences toward DSM in Poland using the Choice Experiment (CE). It will open new field of studies: introduction of the social norms into theanalysis of DSM potential. It will expand conclusions from the Theory of Planned Behaviour.

The Choice Experiment method will be applied to analyze household attitudes to DSM inspired contracts. The research group consisting of 1000 participants will assure the representativeness. In the CE, consumers will imagine the hypothetical situation of having an automated metering infrastructure in their houses. Households will be faced with hypothetical electricity contracts and their choices will reveal preferences for different attributes of the contracts. By econometric methods it is then possible to explicitly estimate the compensations needed to be “flexible” in different dimensions at the household level. The dimensions of flexibility considered in the contracts are related to the types of electricity use (domestic electricity), time of the day (morning/evening) and dissemination of information about the usage of electricity. The social norms questionnaire will make it possible to analyse the impact of social norms on consumers’ choices about electricity usage.

DSM has many beneficial effects (both economic and environmental), including mitigating electrical system emergencies, increasing the reliability of the system and reducing the number of blackouts. Possible benefits can also include deferring high investments in generation, transmission and distribution networks. Demand Side mechanisms improve energy efficiency and help balance electricity supply and demand. The better understanding of consumers’ preferences toward DSM programs is needed to implement them in the most effective way.

The innovative character of the study is that the CE will be used to investigate the potential of using demand side management in Polish households. The results of the study will support company control demand as well as help the government's plans with implementing smart meters in Poland. In the study, it will be possible to estimate a value on the disutility a household experiences, for instance, from not being able to use the washing machine, or disutility from a lower/higher indoor temperature during the peak hours and the utility/disutility associated with peer comparisons of electricity consumption. These values are highly policy relevant by showing how much money households need to change habits, for example, moving electricity use from peak load hours. For the first time the impact of social norms on preferences toward DSM mechanisms will be examined.

Incentivizing skill formation via optimal tax and transfer policy: A theoretical analysis and its application to Polish data

UMO-2018/29/N/HS4/00320 - PRELUDIUM

The  purpose  of  this  proposed  research  is  to  provide  better  understanding  of  how  various  tax  and transfer  policies  such  as  skill  formation  subsidies,  unemployment  benefits,  and  pensions  affect individual  skill  formation  choices  under  uncertainty. 

The  research  aims  at  providing  a  theoretical foundation  for  comparing  various  tax  and  transfer  policies  by  their  impact  on  skill  formation  and social  welfare  in  contemporary  welfare  states  in  general,  and  in  Poland  in  particular. 

Specifically, the  proposed  research  aims  at  providing  answers  to the  following  three  questions:  which  types  of tax and transfer policies can be successfully used to induce individuals to intensify skill formation under  uncertainty;  which  policy  (or  which  policy  mix)  is  the  most  efficient  at  inducing  skill formation  and/or  improving  social  welfare;  and  what  is  the  optimal  (welfare-maximizing)  level  of taxation  and  transfers  from  the  government  in  Poland.  The  answers  to  the  first  two  research questions  will  constitute  a  theoretical  foundation for  guiding  policy  choice  whenever  there  is concern regarding the impact of tax and transfer policies on individual skill formation.

The answer to the third research question will deliver a practical application of the model’s results for Poland

Ekonomiczna analiza praw człowieka w krajach postsocjalistycznych

0095/DIA/2016/45 - DIAMENTOWY GRANT

Celem naukowym projektu jest dokonanie wszechstronnej ekonomicznej analizy praw człowieka dla krajów postsocjalistycznych Europy i Azji. Proponowane badanie ma swoje
podstawy w teoriach rozwiniętych w ramach interdyscyplinarnych nurtów badawczych takich jak ekonomia konstytucyjna i ekonomiczna analiza prawa, oraz szerzej nowa ekonomia
instytucjonalna. Jest ono podzielone na cztery zasadnicze etapy. W pierwszym analizie poddany jest wpływ zakresu obowiązujących praw człowieka (de iure i de facto) na wzrost
gospodarczy państw socjalistycznych po 1989 roku. Zweryfikowana zostanie następująca hipoteza badawcza: respektowanie praw człowieka de facto w krajach postsocjalistycznych
ma pozytywny wpływ na wzrost gospodarczy tych państw. Przedmiotem badania w drugim etapie jest wpływ respektowania tych praw na poziom szczęścia i dochód mieszkańców w tej
grupie krajów w kontekście przebiegającej tam transformacji ustrojowej. Głównym pytaniem badawczym w tej części projektu jest: czy zakres respektowania praw człowieka de iure i de
facto wpływa na poziom szczęścia odczuwany przez mieszkańców krajów postsocjalistycznych? Trzecia część badania skoncentrowana jest na poszukiwaniu
determinantów zakresu ochrony praw człowieka w krajach postsocjalistycznych. Wśród czynników mogących wyjaśniać zakres ochrony praw de facto szczególny nacisk jest
położony na znaczenie praw de iure oraz na potencjalną rolę poziomu wzrostu gospodarczego, dobrobytu i dochodów w kraju. W końcu w czwartym etapie połączona
zostaje analiza determinantów i skutków praw człowieka w badanym kontekście. Dzięki temu możliwe będzie m.in. udzielenie odpowiedzi na pytania: czy władze w państwie zaczynają
respektować prawa człowieka, gdy staje się ono bogatsze, czy to prawa człowieka są jednym z czynników wzrostu gospodarczego, a może zależność można uznać za dwustronną.

ICT and Trade Performances of Central and Eastern European Countries: Evidence from Micro and Macro Data

UMO-2016/23/N/HS4/03655 - PRELUDIUM

In the recent century, information technology revolution and the Internet together with the fast pace of globalization gave birth to digital economy that created new opportunities to produce, deliver, trade and consume goods and services all over the world...

The role of ecosystem services provided by trees in urban planning and management

UMO-2016/23/N/HS4/03674 - PRELUDIUM

This research project addresses the problem of valuing ecosystem services provided by urban trees, that is a part of a broader issue in ecological economics: the interdependence and coevolution of human economies and natural ecosystems over time and space.

In particular, the research will examine the contribution of ecosystem services provided by urban trees to quality of life in cities, yet these services are rarely explicitly considered in environmental policy targets. The goal is to quantify regulating services provided by urban trees and evaluate their contribution to comply with policy targets of air quality and climatechange mitigation in the municipality of Warsaw, Poland. The project will address key economic and policy questions.

In order to develop specific policy recommendations, as a first step first -the i-Tree Eco tool will be adjusted and applied to quantify–in biophysical terms. To express the result in monetary terms, BenMAP tool will be applied. BenMAP is intended as a tool for estimating the health impacts, and associated economic values, associated with changes in ambient air pollution. It accomplishesthis by running health impact functions, which relate a change in the concentration of a pollutant with a change in the incidence of a health endpoint.

As a second step the Principal-Agent model will be created, and by that an analysis of optimal incentive contracts characterized by asymmetric information and externalities generated will be made. The study will focus on the joint provision of ecosystem services, which are a public good, by urban trees manager by a principal (high-level city officials thatare supposed to react to citizens' needs) and an agent ("urban green" administration). For concreteness, we will frame the model with the specific example of environmental policy targets for Warsaw in mind.

The following steps sketch the overall researchplan:

1. Collecting a detailed and comprehensive review of the current theoretical andempirical literature about valuating ecosystem services provided by urban trees;

2. i-Tree Eco modelling;

3. BenMAP modelling;

4. Elaborating on research results;

5. Principal-Agent model application;

6. Disseminating results through publications and conference presentations.

There are at least three reasons, why the research is so important to carry on:

Development of ecological economics: The project’s research will contribute to the development of ecological economics by providing adjusted model for valuating of ecosystem services provided by urban trees in the climate and social-economicconditions of central and Eastern Europe country.

Practical meaning of theresearch:

In the context of a rapidly urbanizing world, understanding complexity and managing human–environment interactions within urban areas is vital if we are to balance the interdependent social and ecological goals of sustainability.

Adjustment to UE regulations by an innovative way ofapplying Principal-Agent model:

In this research an analysis of optimal incentive contracts characterized by asymmetric information and externalities generated will be made. The study will focus on the joint provision of ecosystem services, which are a public good, by urban trees managed by a principal (high-level city officials that are supposed to react to citizens' needs) and an agent ("urban green" administration). For concreteness, we will frame the model with the specific example of environmental policy targets for Warsaw in mind.

Determinants of efficiency and quality of social assistance institutions in Poland

UMO-2015/19/D/HS4/01968 - SONATA

In an increasingly complex world, the provision of public services with a high level of quality is difficult. Public institutions do not have adequate human, material and financial resources to meet all the expectations of citizens. Both theoretically and practically new concepts emerged to provide public services, and special attention should be given to approach of relation network and cooperation between the public, NGO and the private sector. Especially clearly it is evident in the case of social services which supply sometimes poses a serious challenge set toward the local government. With regard to social welfare institutions, in particular the Social Welfare Centres, there is objection regarding the ineffectiveness, inefficiency of their operation, but also instrumental treatment of people in need of social assistance services. Sometimes the quality of services provided by the Centers for Social Welfare and behavior of staff providing those services tends to reverse a potential beneficiaries of social welfare institutions.

On the other hand omissions in the sphere of social assistance have significant spillover effects in the future and increase the cost of delivering aid. Therefore, it became reasonable to take this topic and studies aimed at verifying what are the factors influencing the efficiency and quality of delivery of social services. The main objective of the project is to identify the types of relationships and strength of the relationship between the efficiency of the functioning of social welfare institutions and the quality of services they provide and to investigate the impact of individual components of the efficiency and quality on the performance of social assistance institutions in Poland. Research on the effectiveness and quality of public service delivery are already well established in the literature (see. Modzelewski 2009, Opolski, Modzelewski 2004).

However, the literature does not approach, which examines the relationship between the various components of efficiency and quality. In these studies, there shall be no decomposition on the efficiency of the allocation of investment, scale efficiency and pure technical efficiency in parallel compiling these categories of technical quality, non-technical (functional) and social dimensions of quality. In this context, there were no well so far simultaneous studies of the impact of organizational effectiveness (within individual units of the social welfare system, and complex organizational structures and networks to provide services by many different institutions) to the above mentioned variables on the effectiveness of social assistance services. This study is the development of the concept presented in publications of the Author (see. Modzelewski 2009; Modzelewski, 2014; Opolski, Modzelewski 2004).

The institutional analysis of the local party officials strategies in the economy. The case of

UMO-2015/19/B/HS4/03233 - OPUS

Our project is one of the first attempts in Poland which applies the new institutional economics in the studies of the management system in the centrally planned economy. In our researches of the local party officials’ activity in the economy we apply the model based on the positive agency theory. Using this approach we will analyze the archival materials of the voivodeship committees in Warsaw, Katowice and Lublin and the documents of economic administration – ministries and associations of enterprises.

The results of the project should lead to the better understanding of the evolution of economic system in the time of state socialism in Poland and its influence on the post-communist period. The changes caused by the institutional innovations and inflow of capital, as pointed political scientist and sociologists, promoted groups of interests related to the different branches and regions.

These changes had the impact on the transition process after 1989. Particularly, the phenomenon of nomenklatura privatization and the strong position of former party-state administration in the postcommunist economy is at least partially rooted in the process of institutional evolution of party and state administration that happened in 1970s.

Wealth inequality in Central and Eastern Europe

UMO-2017/25/B/HS4/01360 - OPUS

The project aims at empirical measuring and explaining wealth inequality in post-socialist Central and Eastern European (CEE) countries, which have become EU New Member States after 2004. In economic science, inequality has been usually measured in terms of disparities of income or consumption. Economists paid less attention to wealth inequality largely due to scarcity of reliable data on household wealth. Household wealth is usually measured as net worth, which is a difference between household (real and financial) assets and household debts. Scientific research shows that wealth is of prime importance as a determinant of individual economic well-being and its distribution in the society.

Parental wealth is positively associated with greater educational and cognitive results for children, transitions to home and business ownership, and children’s labor market outcomes. The fact that wealth is usually very unequally distributed (much more unequally than income) translates into very unequal opportunities for children and adolescents coming from different economic backgrounds. According to recent empirical research, wealth inequality is also negatively related to economic growth. Although there is extensive research on wealth inequality in rich countries, the problem has been much less studied in the context of CEE countries. The project can therefore fill an important gap in the economic literature. Specifically, the project will measure the degree of wealth inequality in CEE countries correcting for the problem of the missing data on wealth of the super-rich in household surveys. Such corrected estimates of wealth inequality for CEE countries do not exist yet. The project will provide first insights on the mechanisms that determine wealth inequality in the CEE countries.

The results of the project will help to understand how economic growth, business cycles and structural transformations from centrally planned to market economies have affected wealth of the richest persons, its distribution and mobility among the richest. New facts about wealth inequality and insights into mechanisms driving changes in wealth of the super-rich in CEE region will add to the stock of knowledge about wealth inequality in advanced countries. It will be interesting to see whether the economic processes determining wealth inequality and wealth of the super-rich in the CEE countries are similar to those operating in Western advanced economies. An additional objective of the proposed project is to throw a new light on the problem of income inequality in Poland. The existing substantial literature on income inequality in Poland, based on household survey data, suggests that the rise of inequality was rather limited during the transformation to market economy.

However, inequality estimates in this literature could be seriously biased downward due to the problem of missing top incomes in household survey data. New research based on tax returns data suggests that income inequality grew in Poland much more substantially. This project will provide new estimates of income inequality trends in Poland using combined household survey and tax returns data. In addition, the improved income inequality estimates will be used to compute inequality-corrected measures of real incomes and well-being. We will use these measures to reevaluate whether the Polish transition to market economy was successful in terms of raising overall societal well-being as well as the well-being of the poor and the rich in Poland.

Fragility of pension system and their reforms

UMO-2014/13/B/HS4/03264 - OPUS

The objective of this project is to inquire the role that the time inconsistency of economic policy plays in determining the stability of pension system reforms (PSR). We aim to verify three main hypotheses. First, we propose that thestability of PSR is largely driven by the decision concerning the fiscal closure rule to the reform (H1). Second, we positivelyhypothesize that voters may abandon even welfare enhancing PSF due to time inconsistency of economic policy, makingthe reforms fragile (H2). Third, time inconsistency of the economic policy may affect welfare evaluation of PSR, thus yielding normative recommendation on whether PSR should be implemented at all (H3).

This project involves a sequence of theoretical extension to an OLG framework developed by Hagemejer, Makarski and Tyrowicz (2013). The original framework encompasses a reform of a pension system from a defined benefit pay-as-you-go system (DB PAYG) to a defined contribution (DC) one, with or without a capital prefunded pillar. Our earlier work shows that fiscal closures matter for the overall welfare effects of the reform, but we did not tackle explicitly the choice of fiscal policy and the linked political economy aspect. The extensions will go in three main steps, in response to the formulated hypotheses.

For H1: We have shown in previous research that although contemporaneous taxation is preferable to public debt in terms of welfare, the former allows more intergenerational redistribution, whereas the efficiency loss is small. We have not tested for other fiscal closures, e.g. reduction of contribution rates; adjustment in government expenditure, etc. –they were not viable policy options in the case of Poland, but are often considered in other countries. Indeed, a meaningful inclusion of government expenditure structure in welfare modelling is currently at the frontierof innovation in DSGE modelling.For H2: Recent empirical evidence suggest that the social security reforms are reverted in some countries. We hypothesize that even if social security reform is welfare improving it can still be abandoned in the politicalprocess due to time inconsistency of economic policy. Rational agents, even if reform is individually welfare enhancing, may find it preferable to vote against it if the reforms is unstable. Usually, PSR involves short (or medium) term costs that are compensated with long term benefits. Therefore, due to time inconsistency, agents may vote to revert the reform before the cost of it mount. Additionally, within cohort heterogeneity (e.g. due to income, cost of voting, etc.) makes individual voting strategieseven more complex and its modelling –more challenging. The benefits of abandoning the reform may also crucially depend on the selected fiscal closure. To the best of our knowledge, no such models exist: literature on political economy of PSR so far focused on viability rather than its stability.

For H3: Given the discussed above fragility of PSR due to time inconsistency, we ask whether it is optimal to introduce the reform. We want to see how the cost and benefits analysis of social security reform changes if one takes into account time inconsistency of economic policy. If there is uncertainty about PSR, individual adjustment in terms of labor supply and savings is likely to be different, thus altering the benefits of the PSR. The general equilibrium effects may create a vicious cycle, undermining further the stability of the PSR. Since savings and labor supply may respond incompletely to the incentives from PSR. Our goal is to evaluate how this uncertainty affects the welfare effects of PSR.

The major value added of this project lies in combining efforts from two strands of public economics literature –welfare effects of fiscal policies with political economyof intergenerational redistribution. Both these fields are vital currently, given the fiscal tension and unavoidable aging in Europe and –more broadly –among industrialized countries.We intend to develop three research papers (one in response to each hypothesis), as well as extensively disseminate the results in international conferences and seminars in Poland. In our earlier work we have developed a series of five research articles (available currently as working papers), all of which are already submitted to international refereed journals. We also disseminated in a 11 international conferences, seminars in Poland. As means of dissemination we have developed a website where we share the outcomes of the research, a few non-technical summaries of our work and a constantly updated review of other papers in the field. We presented the conclusions from our research at Chancellery of the Prime Minister, National Bank of Poland, European Commission (DG Employment) and at the World Bank, in addition to numerous academic seminars and a few media appearances. We intend to continue so in the future.

Impact of population ageing on public finances in Poland

UMO-2016/21/D/HS4/00691 - SONATA

The project refers to one of the most important population processes, which is population ageing.

Steady increase of percentage of old people in the population is the outcome of increase in the average life expectancy and also of a low fertility rate. Forecast by Eurostat show that until year 2060, in the European Union member countries percentage of people above 65 years old will be 30%, which is now 17% (from 14% to 35% in Poland). Increase in the proportion of older people is related to providing these individuals decent living conditions both in terms of health and financial security . This becomes a challenge for both families and for the state. With an ageing population the costs to the state budget are increasing.

These costs are related to pensions, as well as expenses associated with health care and long-term care . The aim of the project is to assess fiscal sustainability in Poland, taking into account the projected budgetary impact of population ageing. In this study, basing on the SHARE database, we will modify the underlying demographic assumptions, made in the European Commission’s Fiscal Sustainability Report 2015, concerning elderly people. In addition, using data on physical activity and health condition of elderly people, we will try to verify whether an increase in physical activity would lead to decrease in public expenditure on health care and long term care. The proposed project is of great significance for the fiscal policy and public finances. The results may indicate that the risks associated with unsustainability of public finances in Poland, caused by population ageing, are higher in longer term than it may be concluded from the latest European Commission’s Fiscal Sustainability Report.

On the other hand, the assessment of an impact of physical activity of elderly people on their health condition and the sensitivity of public expenditures on health care and long term care, depending on the physical activity, may indicate the importance of promoting physical activity among the older part of the society