Browsing by Subject "Incentives"
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Item Open Access Competing for global capital or local voters? The politics of business location incentives(Public Choice, 2015-09) Jensen, NM; Malesky, EJ; Walsh, M© 2015, Springer Science+Business Media New York. The competition for global capital has led to interjurisdictional competition between countries, states and cities as to who can offer the most attractive incentives to firms. In this study, we examine the domestic politics of this competition by focusing on incentive use in the United States from 1999 to 2012. We define incentives as the targeted tax deductions or exemptions that are used to lure businesses into a locality. Drawing on data from municipal incentive programs, we examine how electoral competition shapes the use and oversight of targeted incentives. We find evidence that cities with elected mayors provide larger incentives than non-elected city managers by taking advantage of exogeneity in the assignment of city government institutions and a database of over 2000 investment incentives from 2010 to 2012. We also find that elected mayors enjoy more lax oversight of incentive projects than their appointed counterparts. Our results have important implications for the study of interjurisdictional competition and the role of electoral institutions in shaping economic policy.Item Open Access Incentives to Quit in Men’s Professional Tennis: An Empirical Test of Tournament Theory(2018-04-18) Walker, WilliamThis paper studies the influence of incentives on quitting behaviors in professional men’s tennis tournaments and offers broader implications to pay structures in the labor market. Precedent literature established that prize incentives and skill heterogeneity can impact player effort exertion. Prize incentives include prize money and indirect financial rewards (ranking points). Players may also exert less effort when there is a significant difference in skill between the match favorite and the match underdog. Results warrant three important conclusions. First, prize incentives (particularly prize money) do influence a player’s likelihood of quitting. Results on skill heterogeneity are less conclusive, though being the “match favorite” could reduce the odds of quitting. Finally, match underdogs and “unseeded” players may be especially susceptible to the influence of prize incentives when considering whether to quit.Item Open Access Incentivizing Energy Efficiency In Public Buildings Through Information Disclosure: North Carolina Community Colleges As Case Study(2010-05-06T16:12:30Z) Jackson, CharlesThe energy efficiency gap, which describes the difference between current and socially optimal levels of energy efficiency, has persisted for decades, even as our nation’s energy intensity has improved. Economics literature tends to focus on informational, behavioral, and large-scale market failures when positing the causes of the gap. However, state and local policy failures may greatly contribute to the gap as well. Information disclosure policies are particularly well suited to narrow the energy efficiency gap, because they cost-effectively address behavioral and informational failures and can be easily implemented on the local level. The Federal Government has utilized such policies to vastly improve the energy efficiency of its buildings’ stock, but state and local governments have been slow to follow suit. This Master’s project investigates the potential of utilizing information disclosure policies to narrow the energy efficiency gap in public buildings at the local level by analyzing the North Carolina Community College System as a case study. First, analysis of the Toxics Release Inventory, the archetypal environmental information disclosure policy in the United States, yields recommendations for incentivizing energy efficiency in public buildings. Next, a comparative analysis of energy consumption in South Carolina Technical Colleges reveals that the potential for cost-effective, near-term energy efficiency investments in North Carolina Community Colleges could yield annual savings of ~$5 Million. Finally, lessons are drawn from South Carolina’s early adoption of information disclosure policies to yield concluding recommendations for bolstering information disclosure policies in North Carolina. Stronger information disclosure policies coupled with polices that rectify local policy failures could better incentivize energy efficiency in North Carolina’s Community College buildings.Item Open Access Individual Incentives as Drivers of Innovative Processes and Performance(2008-04-24) Sauermann, HenryApplied economists and strategy scholars have examined a variety of firm-level factors that may explain the level and direction of firms' innovative effort and performance, including firms' profit incentives. Innovation at the firm level, however, should also depend heavily on the nature of the pecuniary and non-pecuniary incentives driving the efforts of those individuals that are responsible for innovative activities within firms. Drawing on research in economics and social psychology, I examine three questions: 1. What are the motives of individuals engaged in firm innovation? 2. How do individuals' motives and incentives affect their innovative effort and performance? 3. How do individuals' motives and incentives differ between entrepreneurial and established firms, and are any such differences associated with differences in innovative effort and performance? My empirical analysis builds on the National Science Foundation's SESTAT data, which contain survey responses from over 10,000 scientists and engineers employed in U.S. firms. Among others, the data contain measures of individuals' extrinsic, intrinsic, and social motives (e.g., preferences for work benefits such as salary, intellectual challenge, and contribution to society), effort, and innovative performance. In chapter Two ("What makes them tick - Employee motives and firm innovation"), I develop a formal model of the relationships between individuals' motives and incentives, effort, and innovative performance. Econometric analyses using the SESTAT data suggest that individuals' motives have significant effects upon innovative effort, as well as on innovative performance, controlling for effort. Overall, intrinsic motives (in particular, intellectual challenge) appear to be more beneficial for innovation than extrinsic motives. In chapter Three ("Fire in the belly? Individuals' motives and innovative performance in startups and established firms"), I examine differences in motives, effort, and performance between startups and established firms. I find that individuals' extrinsic motives differ significantly between startups and established firms, while their intrinsic motives are surprisingly similar. Startup employees expend more effort and have higher patent application counts than individuals in established firms. Individuals' motives explain only a limited amount of these effort and performance differences across firm types, however, because the intrinsic motives that are most strongly associated with effort and performance differ little between startups and established firms.Item Open Access Theory versus Practice in Payment for Ecosystem Services in Totonicapán, Guatemala(2018-04-27) Spaulding, LeannePayment for Ecosystem Service (PES) initiatives are a popular and wide-spread market-based approach to mitigating detrimental impacts of rapid land-use change that threatens vital ecological resources such as water, soil, and timber. The basic premise of PES involves a set of voluntary transactions between the buyers and sellers of a clearly defined ecological service. In theory, sellers - often rural landholders - are incentivized to adopt conservation-based practices to ensure delivery of the ecosystem service that buyers pay them to provide. Yet in practice, PES initiatives rarely reflect the original market-based model. A debate has surfaced as to why and how this approach to conservation is altered and contested by local actors, however few case studies have been documented. To fill this gap, this study documents the history of PES in Totonicapán, Guatemala. The study uses a series of interviews and participant observations to explore how local political, social, environmental and cultural dynamics led to the contestation and subsequent reshaping of PES programs by local actors. The results of this study provide insight on how PES may be adapted to improve conservation outcomes, particularly in rural indigenous communities.