NORMS, VALUES, AND PREFERENCES: MEASURING THE INTANGIBLE DRIVERS OF - - PowerPoint PPT Presentation

▶
norms values and preferences measuring the intangible
SMART_READER_LITE
LIVE PREVIEW

NORMS, VALUES, AND PREFERENCES: MEASURING THE INTANGIBLE DRIVERS OF - - PowerPoint PPT Presentation

Mar 14, 2023 377 likes •759 views

NORMS, VALUES, AND PREFERENCES: MEASURING THE INTANGIBLE DRIVERS OF ECONOMIC AND SOCIAL OUTCOMES Conal Smith New Zealand Treasury 24 February 2016 Wellington Measuring the intangible drivers of economic and social outcomes Outline

slide-1
SLIDE 1

NORMS, VALUES, AND PREFERENCES: MEASURING THE INTANGIBLE DRIVERS OF ECONOMIC AND SOCIAL OUTCOMES

Conal Smith

New Zealand Treasury

24 February 2016 Wellington

slide-2
SLIDE 2
  • Outline

– Definitions: what do I mean by the intangible drivers of economic and social outcomes? – Evidence: why believe that these things matter? – OECD: what is the OECD doing to get a better handle on the intangibles?

  • Culture
  • Trust

2

Measuring the intangible drivers of economic and social outcomes

slide-3
SLIDE 3

Definition

3

26% 16% 59%

Low income countries

Natural Capital Produced Capital Intangible Capital 13% 19% 68%

Middle income countries

Natural Capital Produced Capital Intangible Capital 2% 17% 80%

High income countries

Natural Capital Produced Capital Intangible Capital

World Bank, 2006

slide-4
SLIDE 4

Definition

4

26% 16% 59%

Low income countries

Natural Capital Produced Capital Intangible Capital 13% 19% 68%

Middle income countries

Natural Capital Produced Capital Intangible Capital 2% 17% 80%

High income countries

Natural Capital Produced Capital Intangible Capital

To a first approximation, intangible capital is the only capital stock that matters in the production function.

World Bank, 2006

slide-5
SLIDE 5

Definitions

5

slide-6
SLIDE 6
  • Intangibles

– No direct market prices – Only measured indirectly or through subjective judgments

6

Definitions

slide-7
SLIDE 7
  • Personal characteristics

– Evaluations and feelings – Psychological characteristics – Knowledge and skills – Social networks

  • Inter-personal characteristics

– Norms and values – Trust (expectations of others) – Culture

7

Definitions

slide-8
SLIDE 8
  • Personal characteristics

– Evaluations and feelings – Psychological characteristics – Knowledge and skills – Social networks

  • Inter-personal characteristics

– Norms and values – Trust (expectations of others) – Culture

8

Definitions

Human Capital

slide-9
SLIDE 9
  • Personal characteristics

– Evaluations and feelings – Psychological characteristics – Knowledge and skills – Social networks

  • Inter-personal characteristics

– Norms and values – Trust (expectations of others) – Culture

9

Definitions

Human Capital Social Capital

slide-10
SLIDE 10

Evidence: subjective evaluations

10

Source: George Ward, 2015

slide-11
SLIDE 11

Evidence: subjective evaluations

11

Source: George Ward, 2015

slide-12
SLIDE 12

Evidence: locus of control

12

Source: George Ward, 2015 Heckman, 2006

slide-13
SLIDE 13

Evidence: locus of control

13

Source: George Ward, 2015 Heckman, 2006

slide-14
SLIDE 14

Evidence: trust and GDP

14

Source: Algan and Cahuc, 2013

slide-15
SLIDE 15

Evidence: Trust and TFP

15

Source: Algan and Cahuc, 2013

slide-16
SLIDE 16

Evidence: Trust and life satisfaction

16

Source: Algan and Cahuc, 2013

slide-17
SLIDE 17

OECD

17

The raison d’etre of the OECD is better policies for better lives.

  • Better lives: well-being
  • Better policies: what drives well-being

The broad outlines of how to measure well-being is not a significant issue: there is a general consensus on what you need to measure across countries and from different philosophical starting points

slide-18
SLIDE 18

OECD

18

slide-19
SLIDE 19

OECD

19

At the more detailed level, measurement gaps still exist Key measurement gaps include:

  • Measures of social capital
  • Measures of natural capital
  • Measures of non-cognitive skills
  • Measures of social contact
  • Measures of economic security

…but we can make progress on these issues

  • Cultural bias
  • Social capital
slide-20
SLIDE 20

Cultural bias in measuring subjective well- being

20

slide-21
SLIDE 21

Cultural bias in measuring subjective well- being

21

slide-22
SLIDE 22

Cultural bias in measuring subjective well- being

22

slide-23
SLIDE 23

Cultural bias in measuring subjective well- being

23

Four possible sources for unexplained country differences in subjective well-being

  • Unmeasured country circumstances and differences in how

life is lived

  • Differences in how people feel about their lives
  • Language differences in scale use
  • Cultural response styles or biases
slide-24
SLIDE 24

Relatively little evidence for large cultural differences in emotionality

24

slide-25
SLIDE 25

Our assumptions about which countries are unusually emotional are wrong…

25

slide-26
SLIDE 26

… and emotionality is not driving life satisfaction

26

slide-27
SLIDE 27

There is relatively little cross-country correlation in response bias to different types of question

27

slide-28
SLIDE 28

Country of birth explains only 18% of variance in life satisfaction

28

slide-29
SLIDE 29

The maximum implied size of cultural bias is not large

29

slide-30
SLIDE 30

Trustlab

30

  • The OECD published

Guidelines on Measuring Subjective Well-being in 2013

  • In 2017 the OECD

Guidelines on Measuring Trust will be published

slide-31
SLIDE 31
  • There is strong prima-facie evidence that questions on generalised trust

collect valid information (Algan and Cahuc, 2013)

  • Evidence for measures of institutional trust (i.e. trust in parliament, police,

media etc) is less clear, but measures have higher immediate policy relevance

  • Unlike subjective well-being, the evidence base for the validity of trust

measures is rather limited

  • Falk, Becker, Dohmen, Huffman, and Sunde (2013)

– Risk taking – Time discounting – Trust – Altruism – Positive reciprocity – Negative reciprocity

  • We need high quality experimental measures of trust that can be used to

validate survey-based measures

31

Trustlab

slide-32
SLIDE 32
  • Internet survey
  • Representative national sample of n=1000
  • Combines traditional survey questions

with experimental games providing both behavioural and subjective information

  • Games are played with real resources at

stake (mean value c$15 NZ)

32

Trustlab

slide-33
SLIDE 33

Trust Game Public Good Game Flexible content age, sex, HH composition, marital status, LF status, HH income, personal income, educational attainment, Generalised trust (Rosenburg), Wallet question, radius of trust, Flexible content

Core experimental module (every wave) Core trust question module (every wave) Demographic module (every wave) Flexible experimental module Flexible question module

33

Trustlab

slide-34
SLIDE 34

Flexible content age, sex, HH composition, marital status, LF status, HH income, personal income, educational attainment, Generalised trust (Rosenburg), Wallet question, radius of trust, Flexible content

Experimental Traditional survey questions

Trust Game Public Good Game

34

Trustlab

slide-35
SLIDE 35

Implicit Association Test age, sex, HH composition, marital status, LF status, HH income, personal income, educational attainment, Generalised trust (Rosenburg), Wallet question, radius of trust, GOV trustworthiness questions, trust in institutions

Core experimental module (every wave) Core trust question module (every wave) Demographic module (every wave) Institutions experimental module Institutions question module

Trust Game Public Good Game

35

Trustlab

slide-36
SLIDE 36

Content – experimental module

  • n generalised trust

36

slide-37
SLIDE 37

Trustlab

37

  • Timeframes
  • 2015

– Survey development

  • 2016

– IT platform finalised – First wave (generalised trust + institutional trust) implemented in Korea, France, and 2 other countries. – Results of first wave published

  • 2018

– Second wave?