Projekty badawcze

Social networks, intergenerational transfers and family in international migration

UMO-2015/19/D/HS4/00813 - SONATA

The aim of the project is to understand how international migration of adult children affects a social network (i.e. a group of close individuals) and received private transfers of money and time of their parents, who stayed in the home country. How migration affects family relations? Are the social networks of migrants’ parents larger than the social networks of parents whose children do not migrate? What is the share of persons unrelated and what is the share of the family members in the social networks of migrants’ and non-migrants’ parents? Do the financial and non-financial transfers received by the parents come from their children, from members of their social network, or from people outside from those networks? Are the amounts and structure of private transfers received by parents in migrant families the same as in the families without migrants? Are the migrant children residing abroad more willing to provide financial transfers to parents and limit the non-financial transfers because of the physical distance? Do children who remain in the home country provide larger financial transfers to their parents in migrant families than children in non-migrant families? The answers to the research questions posed above are not obvious. On the one hand, a small physical distance may facilitate maintaining contact, on the other hand, close proximity can generate conflicts. Migration of children may enhance the emergence of unrelated individuals in the social network of parents. In addition, modern means of communication can modify these relationships. Therefore, the impact of child’s migration on parent’s social network requires examination. Furthermore, large physical distance inhibits the non-financial transfers for parents remaining in the country provided by migrant children. It can be expected that the decline in care provided to parents due to migration of one child can be compensated for by relatives remaining in the home country (either children or other persons). If the transfers are altruistic and fully compensated, then there will be no motivation to increase financial transfers to the parents of a migrant child. Thus, who and to what extent provides care depends on parents’ social network and shapes financial transfers to parents from migrant children (and from children remaining in the country). Moreover, financial transfers are not a perfect substitute for non-financial transfers, which could additionally complicate the described phenomenon. Therefore, it is important to examine factors affecting non-financial and financial transfers given to parents in migrant and non-migrant families. This research problem is closely linked to the major challenges of modern societies. Increasing age in which individuals formulate marriages or partnerships, relations’ instability, and fertility allowing at most generations’ replacement have been observed in European countries and in Poland for decades. The systematic increase in the number and the proportion of older people in the European populations occurs due to the increasing life expectancy and constantly low fertility. Because of the greater life expectancy, families are composed of representatives of more generations, but due to the lower fertility rate, each descending generation is less numerous. Family ties are also changing, unstable relationships entail reconstruction of the family, in which family relationships become more open and less dependent on the degree of kinship. Social networks also transform themselves, because the circle of relatives and trusted people can undergo significant differentiation. For example, social networks of older individuals in families with a small number of children can expand with friends.

Thus, to ensure the elderly a decent living, care during illness or disability, as well as material benefits, becomes a challenge. In particular, families whose member or members undertake migrations can face such problems. In a family with a small number of children, one of whom migrated abroad and parents are characterized by long life expectancy, providing financial and non-financial help becomes more problematic than in the family without migration. It is especially important for Polish society, because about 2 million Poles stayed abroad for at least three months in 2011. The study is important for the development of the discipline and also for the social policy. The abovementioned phenomena require building of a model explaining the mechanisms governing decisions children make on the frequency and the size of financial and non-financial transfers provided to parents in migrant and non-migrant families. Moreover, there is a need to examine how the social networks of older individuals look and how they differ between parents of migrant and non-migrant children.

Our empirical analysis is based on the SHARE (the Survey of Health, Ageing and Retirement in Europe) panel survey conducted over a representative sample of persons aged at least 50 years in 20 countries (Austria, Belgium, Czech Republic, Denmark, Estonia, France, Greece Spain, Netherlands, Ireland, Germany, Luxembourg, Poland, Portugal, Slovenia, Sweden, Switzerland, Hungary and Italy, and Israel) in the years 2004-2013 with the use of econometric estimation methods and statistical tests.

New methods of parametric modelling of consumer's preferences

UMO-2015/19/D/HS4/01972 - SONATA

The subject of the proposed project concerns the ways of modeling consumers’ preferences. The aim of the project is to propose new methods which will be better at describing the preference differences in the population. These new approaches include: (1) using more flexible distributions, than currently applied (2) proposing a model in which there are main preference types but also differences within each type and (3) going away from the typical assumption of the linear relationship between the cause and effect. The new methods we propose can be used in statistical models which are used for the analysis consumers’ choices. The observed choices make it possible to quantitatively describe consumers’ preferences. As a result, it is possible to evaluate the changes in their welfare, their maximum willingness to pay and to predict their market behavior. In this project, we will prepare theoretical foundations and tools which will allow for using the new approaches we propose. Their practical applicability and performance will be evaluated and compared using (1) computer simulations, (2) existing and (3) newly collected empirical data. The empirical study planned within the project deals with visual pollution caused by outdoor advertising in Warsaw.

This is a relevant empirical problem due to potentially high impact on consumers’ welfare, but also in the light of the new regulations (the act of ‘ustawa krajobrazowa’ dated 24 April 2015) which allows policy makers to influence the number, size and placement of outdoor advertisements. Our empirical study will thus provide the much needed results which will allow for defining the socially-optimal level of outdoor advertising in Warsaw. Preference modeling is one of the keystones of modern microeconomics and is difficult to be overestimated. It is critical for supporting public policies, designing new private goods or predicting consumers’ behavior.

These methods have been implemented in a vast number of papers in many fields of applied microeconomics, including marketing, transport, health and environmental economics. Our research project addresses the fundamental methodological problem related to the modeling of consumers’ preferences, i.e. accounting for the differences in consumers’ preferences.

This has been one of the priorities of the research in this field for many years, and remains to be one of the most important points in the research agenda. Providing new, more efficient methods to describe the differences in consumers’ preferences will make it possible to better describe the reality and to improve predictions of consumers’ behavior. The improvements in the methodology will therefore transfer directly to empirical applications and policy making. At the same time, the empirical study to be conducted within the project has a chance to provide a valuable input to the public debate regarding the level of outdoor advertising, and the results will likely be in the interest of the general public and policy makers in Poland and abroad.

The private value and the rate of return to tertiary education in Poland

UMO-2015/19/B/HS4/03232 - OPUS

The main research objective of the project is to calculate the private value and the rate of return for tertiary education in Poland by using econometric procedures to account for the broad measures of benefits and costs of studies. Many young secondary school leavers after passing their A-level exams stand each year before the decision on their future life path. Some opt for direct entry into the labour market, others decide to continue their education enrolling into higher education programmes.

There are many reasons why young people choose to study (interesting way of life, continuing the family tradition, development of their own interests and passions, vocation or mission). Among those factors that influence the choice of studying, the economists are mostly interested in those which stem from the theory of rational choice, which are expectations of significant financial benefits in the form of higher wages, achieving an appropriate prestige and position in life, as well as the desire to increase opportunities for attractive and stable employment.

The decision to continue education unfortunately entails also the costs. These costs result from the fact that the labour market entry must be postponed for a few years, leading to potential loss of revenues from work. In the European labour market, which becomes increasingly open and available for young Poles, these forgone earnings can be quite substantial. In addition, studying involves a variety of direct financial expenditure as well as engagement of time and effort required for completing a diploma. The aim of the proposed project is to determine and evaluate the costs and benefits resulting from decisions to continue education at the tertiary level in Poland.

The main hypothesis of underlying research project states that the value of tertiary education in Poland is significantly positive, but declining in recent years, which can be related to massification of tertiary education. The internal rate of return for tertiary education is above typical rates of return for financial assets indicating that education can be seen as a worthwhile investment.

Additional hypotheses related to the value and the rate of return to tertiary education will be subject to falsification. It is postulated that the value of tertiary education varies to several characteristics, in particular: it is higher for women than men; higher for higher ability graduates; and higher for public school graduates.

Culture goods as experience goods

UMO-2014/14/E/HS4/00389 - SONATA BIS

The nature of the project is mainly empirical and experimental. During the course of the project we willconduct several controlled field experiments and questionnaire studies.Based on already existing relations with economic entities financing the production and distribution ofcultural goods we will conduct several controlled field experiments estimating the impact of the experiencedcharacteristic   of   cultural   goods   on   the   differences   in  WTP  ex post  consumption   and  WTP  ex anteconsumption. WTP will be estimated based on actual bids made under PWYW mechanism. While assessingthe difference between payments made in PWYW  ex ante  consumption system and in PWYW  ex postconsumption system we will take into account among others: (1) atmosphere in which consumption takesplace, (2) description of a specific cultural good (its digital availability, launch time, etc.); and (3)  theuncertainty with respect to quality of the cultural good (i.e. with respect to the utility it may derive). In orderto encourage consumers to place their truthful offers we will use the system of incentives based on the ideaof Groves-Clark Tax (GCT). For this project, GCT mechanism will be modified to be rather a subsidy than atax and will be implemented for cultural goods. To judge the reliability of this mechanism we will also useother experimental techniques usually used to elicit from respondents truthful answers (e.g. Bayesian TrueSerum scoring method) and to estimate consumer WTP (e.g. Second-price sealed-bid Vickrey auctions).Expected impact of the research project on the development of science, civilization and societyTo the best of authors’ knowledge, there is no empirical work dealing with the topic of  analyzing the impactof the experienced characteristic of cultural goods on the differences in WTP ex post consumption and WTPex ante consumption. In addition, there is no empirical work neither using Groves-Clarke tax mechanism norjudging  its reliability.The  value  added  is  therefore in (1) the fields of behavioral and experimentaleconomics and (2) cultural economics, by extending the current understanding of economic processes in theanalyzed segment of the economy. Verifying the research hypothesis will allow us to define alternative waysof financing, producing and distributing cultural goods, in particular those that may have to compete againsttheir free unauthorized counterparts. The performed analysis and constructed research scenarios that applythe concept of Grooves-Clark tax mechanism  may well be used in the future projects.

Parental leave- short term outcomes of Polish reforms

UMO-2015/17/N/HS4/02925 - PRELUDIUM

In developed countries not enough children are born. Consecutive generations are less numerous than the previous, which altering alters the proportion of working and retired individuals...

Fiscal and welfare effects of changes in fertility and health in an aging society - insights from OLG modelling.

UMO-2014/13/D/HS4/03643 - SONATA

The aim of this study is to assess using the OLG macroeconomic model the long- and medium-term effects of changes in fertility and life expectancy in good health.

By developing scenarios of changes in fertility and life expectancy in good health and appropriate macroeconomic modeling based on OLG model will be constructed to verify the purpose of the study includes the following research hypotheses: H1: Increase of fertility (for example due to family policy) may in the medium and long term bring economic benefits exceeding the costs of pro-natalist policy H2: The increase in healthy life expectancy (which is the result of investments in prevention and health care on selected diseases) can mitigate the negative impact of changes in the structure of the population on public finances and the general level of prosperity. It can be done by changing the preference for work of the next generations of older workers

The factors that affect the number of children they have and the factors influencing the improvement of the health status of the next generation (and hence the possibility of extending the age of labor market activity) will shape future changes in public spending and welfare.

Formal versus de facto rules in economic studies of postsocialist countries' constitutions.

UMO-2014/13/B/HS4/00402 - OPUS

The project aims at providing the answer to the question, whether formal rules originating from the text of state constitutions matter for de facto constitutional rules operating in these countries (main goal), and if so, what are the conditions/determinants of this influence and in a broader perspective –of the mutual relations between these rules (detailed goals). Existing literature in the field of Constitutional Economics, as well as Constitutional Law and Economics, confirms the significance of de facto constitutional rules for policy decisions and economic outcomes, however the results pertaining to formal constitutional rules (stemming directly from the constitution texts) are at best ambiguous. Recent cross-disciplinary studies concerning the relevance of formal rules for constitutional practice, combining economics, legal scholarship and political science, as well as conclusions stemming from Law and Economics research on the relationship between formal rules and social norms, so far not applied to the constitutional setting, allow to formulate a hypothesis, according to which the content of de iure constitutional rules (originating from the constitutiontext) is significant for de facto constitutional rules operating in these countries (under certain conditions, which will be specified based on the verification of detailed hypotheses of the project) and, therefore, exerts indirect influence on policy decisions and economic outcomes. The proposed project is aimed at studyingthese issues in detail with the use of recent achievements of cross-disciplinary approaches within economics,as well as econometric tools. The empirical analysis will encompass postsocialist countries of Europe andAsia, which faced the need to introduce new constitutional frameworks to allow for systemic changes thatoccurred after 1989.

The basis for the theoretical study encompassed by the project is the distinction between de iure and de facto constitutional rules, inspired by the theory on the production of norms as proposed by Law and Economics. The mechanism how informal rules evolve and how they interact with formal rules is explained using game theory, in particular signaling theory. This method is applied inter alia to explain the effect of crowding-out informal rules by the formal ones. The empiricalstudy, aimed at verification of the main and detailed research hypotheses, will apply econometric methods. The constructed empirical model will be based on the conclusions of the theoretical part of the project, regarding the channels of mutual relationships between de iure and de facto rules. The following will be explained: the variation within de facto rules –by reference to de iure rules and a set of control variables; the reverse relationship; as well as potential more complex interactions between the rules. The study will apply panel data techniques, including simultaneous systems estimations and matching.

Due to the lack of unambiguous conclusions concerning the significance of formal constitutional rules for policy decisions and economic outcomes, while at the same time a debate currently takes place between political scientists, legal scholars and economists about the existence and nature of interrelationships between formal and informal rules, which is far from resolved, in particular at the constitutional level, the research carried out within the project and its potential results will mark a significant contribution to the international literature on Constitutional Economics and Constitutional Law and Economics. The proposed study will also be a source of scientifically-backed recommendations for constitution-drafters as regards formulating the constitution text so that it creates a formal setting which is conducive to the effective functioning of the economy. In particular, based on the obtained results, it will be possible to formulate recommendations allowing for a more successful quest for de iure constitutional solutions fulfilling the needs of postsocialist countries of Europe and Asia. In the latter context the project may also be of particular importance for the current debate regarding constitutional amendment in Poland and the role of the Polish Constitutional Tribunal for sanctioning informal constitutional rules. Finally, the project will contribute to the development of recently initiated research in the field of Constitutional Law and Economics in Poland.

Will GDPR solve the online privacy paradox? Study on users' preferences towards privacy control mechanisms

UMO-2017/25/N/HS4/01214 - PRELUDIUM

Project objectives:

Recent body of research shows that the ability of consumers to make informed decisions about their Internet privacy is seriously hampered due to insufficient control over personal data they share online. The uncertainty with respect to ‘who’, ‘when’ and ‘for what purpose’ collects this data undermines trust in online providers which has negative consequences for the development of digital economy. In recognition of this challenges the EU has recently introduced General Data Protection Regulation (GDPR) which will enter into force in 2018 setting minimal rules of conduct with respect to privacy protection. The project will apply a discrete choice experiment (DCE) method to determine consumer preferences towards protection of online privacy. The project will focus on: (a) user preferences towards different ’scopes’ of control mechanisms which might evolve from upcoming privacy reform in the EU and (b) welfare assessment of ’minimal’ vs ’maximal’ privacy protection. The specific project objectives are: (i) to provide evidence on how individual users assign value to the specific aspects of privacy protection, such as data portability, right to be forgotten or objection towards profiling and secondary use of data; (ii) explore heterogeneity of preferences towards privacy with respect to relevant characteristics of users; (iii) explore to what extent preferences towards privacy protection are sensitive to different framing of disclosure risks (in order to examine existence of so called’privacyparadox’); (iv) based on scenario simulation, assesswelfareeffectsof’minimal’and’maximal’ scopes ofprivacy protection which may evolve after 2018.

Methodology:

To elicit customers’ preferences for specific instruments of online privacy protection, we will implement a dedicated discrete choice experiment. The choice attributes will represent various aspects of data protection, specifically: (i) information obligations of online service providers; (ii) objection to profiling and secondary use of personal data; (iii) data portability between providers of online services; (iv) possibility to remove personal data. Next we will apply random utility approach (specifically: mixed logit model to account of observed and unobserved preference heterogeneity) to estimate parameters of utility function, calculate consumers’ willingness-to-pay for various levels of data control mechanisms as well expected welfare effects of differentscopesofprotection. Theadvantageofchosenstatedpreferenceapproachisanopportunitytoexplore benefits of regulatory interventions before their actual implementation. We deal exactly with such situation in this project.

Impactonscienceandsociety:

Opinion surveys conducted by the EC show that the protection of personal data remain significant concern for the majority of EU citizens. More than eighty percent of the respondents across EU feel that they do not have complete control over their personal data provided during online activities. Internet users are concerned with consequences of collecting, managing and using of their personal data for other purposes than actually agreed to. More than sixty percent do not trust online service providers in thisregard. These results rise concerns about the growing asymmetry between online providers and users but also growing informational advantage of dominant platforms vis-a-vis new entrants. UpcomingGDPRregulationintheEUsetsonlyminimal(weak)standardsofprivacyprotectionandmember states are free to implement more restrictive level of protection. Hence the issue of practical solutions available for users remains unspecified. The significance of the proposed project lies in the estimation of economicbenefitsofvariouspracticalscenarios, assumingdifferentscopesof’effective’privacycontrolforusers. Specifically the project results shall address the following questions: Do users demand strong regulation? Which control aspects are crucial? How different users characteristics and usage profiles impact evaluation of data protection? Are users sensitive to the different framing of risks and consequences related to personal data fraud or disclosure? Byprovidinganswerstothesequestions,theproposedresearchwillenrichdebateontheimplementationof the EU reform of online privacy protection with sound economic arguments. The results of the project will be relevant for establishment of the most effective practical solutions toward rising awareness and use of privacy enhancing rights.

The intention of the applicant is to better understand the factors shaping attitudes towards Anthropogenic Climate Change and thus to contribute in creation of more effective ways of reaching people with knowledge concerning this problem and solutions recommended by the experts.

Factors encouraging creation of innovation by cooperation in the Open Source Community

UMO-2016/21/N/HS4/02100 - PRELUDIUM

Our research projects aims to determine how the structure of the social network and which characteristics of developers involved in the creation of Open Source software favor creation of innovation in the Open Source community. By innovations, we mean new software and improvements which are created through cooperation among developers.

Our analyses will be based on the unique database, obtained by web scrapping GitHub, which is currently one of the largest repository services used for Open Source software development. The database contains publicly available information about the developers registered on GitHub. Developers are related to each other in various ways (e.g., they express interest in new activity by other developers, new activity about specific projects, or develop software cooperatively), hence they can be represented as nodes of a social network.

Utilizing the data above we will check whether the developer’s reputation (measured e.g. as the numer of people who have asked to be informed about the developer’s activity, or the number of distinctions awarded to the projects) increases the probability of generating innovations by cooperating with the developer. We will also study to what extent the phenomenon of homophily affects the creating of innovations, i.e., whether programmers who have similar characteristics are more likely to cooperate.

The first task is to organize the raw data obtained from GitHub and publicly accessible databases: GHTorrent and GithubArchive. Information about developers is publicly available, but it is distributed among various sites, and may contain errors. It needs to be aggregated and cleaned up.

The second task is to prepare our data set for the needs of the analytic models estimated in ourresearch. We have to harmonize and aggregate the data. Furthermore, we will create a hyperbolic map of the social networks. Application of hyperbolic geometry to represent socialnetworks is a relatively new approach, which allows to describe relationships in the social networks which are created based on a combination of popularity and similarity between nodes.

In the third task, we will study how the probability of creation of innovation between two developers depends on the structure of the social network. We will also study the characteristics of programmers which favor collaboration with them.

The four task is to validate the results obtained in theprevious tasks. We will collect a secondsnapshot of the social network, and try to predict whether an innovation between two programmers has been created, based on the previously obtained models. We will compare the predicted graph with the real one. This step will allow us to verify the extent of possible generalization of our results.

Already existing studies of the Open Source community were usually based on samples of 100-300 developers, working on a specific project. There were almost no studies which applied econometrics and the theory of social networks to analyze the community. The presented project aims to fill these gaps. Our project is interdisciplinary: it combines computer science, economy, and

The impact of fiscal policy on inflation expectations in the EU economies. A new approach to testing the fiscal theory of the price level

UMO-2015/17/B/HS4/00297 - OPUS

The aim of the study is to verify the impact of fiscal Policy on inflation expectations of consumers and professional forecasters in selected European Union economies. According to the fiscal theory of the price level, intertemporal budget constraint of the government can be staisfied in two ways –either by generating budget surpluses in order to finance current public debt (monetary dominance regime) or by the increase of prices (fiscal dominance regime). Since the beginning of the recent financial crisis, Europe has been confronted with the debt crisis, whose scalehas been rising. The increase of public debt, implying the risk that the budget constraint will be satisfied via an increase of the price level, should exert influence on inflation expectations of the public, given that economic agents understand mechanism of this kind. Therefore, according to our hypothesis inspired by the fiscal theory of the price level, higher public debt should make inflation expectations of the public increase. Such an effect however should be diversified among countries due to two factors, i.e. the existence of fiscal dominance and the level of inflation. There will be three principal stages of our research. Within the first one we will quantify consumer inflation expectations in 20 EU economies (those for which survey data on inflation expectations are available) with the probability method. Then we will identify the economies characterized by fiscal dominance in the period under analysis. We will use the Bohn (1998) test for fiscal dominance, based on a long-run relationship betweena lagged public debt-to-GDP ratio and the primary balance of the budget expressed as a percentage of GDP. Within the last stage of the research we will estimate models of formation of inflation expectations of consumers and professional forecasters. Amongexplanatory variables they will contain the public debt, among others. The impact of the public debt on inflation expectations will be controlled for a possible existence of fiscal dominance and for the inflation regime (low/negative vs. high inflation).

The analysis will be conducted both on individual country data and panel data.The results of the proposed study will expand the economic knowledge in the following areas:• verification of the existence of the fiscal dominance phenomenon in a large group of the European economies with the sample covering the period of the recent financial crisis;• better understanding of the model of formation of inflation expectations in the analysed economies;• empirical verification of the fiscal theory of the price level from the point of view of inflation expectations of consumers and professional forecasters and, if the impact of public debt on inflation expectations occurs statistically significant, identifying an additional channel, through which fiscal policy caninfluence inflation;• assessment if in the environment of low or negative inflation fiscal policy can protect inflation expectations from becoming deflationary expectations.