Environmental Policy Performance and its Determinants: Application of a Three‐Level Random Intercept Model

Bocconi IEFE - Centre for Research on Energy and Environmental Economics and Policy Working Paper n. 71

22 Pages Posted: 27 Aug 2014

See all articles by Marzio Galeotti

Marzio Galeotti

University of Milan - Department of Environmental Science and Policy (ESP); GREEN - Centre for Research on Geography, Resources, Environment, Energy & Networks

Yana Rubashkina

Catholic University of the Sacred Heart of Milan

Silvia Salini

University of Milan - Department of Business Policy and Economics (DEPA)

Elena Verdolini

Fondazione Eni Enrico Mattei (FEEM), CMCC - Euro Mediterranean Centre for Climate Change

Multiple version iconThere are 2 versions of this paper

Date Written: August 27, 2014

Abstract

We propose the use of a two level random intercept model to measure the degree of environmental policy performance of di erent countries and to study its determinants. Inspired by the literature on multilevel latent models and Item Response Theory (IRT), this framework treats policy commitment as a latent variable which is estimated conditional on the diculty of the policy portfolio implemented by each country. We contribute to the study and scoring of environmental and energy policies in three main ways. First, the model results in a ranking of countries which is conditional on the complexity of their chosen policy portfolio. Second, we provide a unified framework in which to construct a policy indicator and to study its determinants through a latent regression approach. The resulting country ranking can thus be cleaned from the e ect of economic and institutional observables which a ect policy design and implementation. Third, the model estimates parameters which can be used to describe and compare policy portfolios across countries. We apply this methodology to the case of energy eciency policies in the industrial sectors of 29 EU countries between 2004 and 2011. We conclude by highlighting the future possible applications of this approach, which are not confined to the realm of environmental and energy policy.

Keywords: energy policy, environmental policy, ranking, policy portfolios

JEL Classification: Q58, O57, C33

Suggested Citation

Galeotti, Marzio and Rubashkina, Yana and Salini, Silvia and Verdolini, Elena, Environmental Policy Performance and its Determinants: Application of a Three‐Level Random Intercept Model (August 27, 2014). Bocconi IEFE - Centre for Research on Energy and Environmental Economics and Policy Working Paper n. 71, Available at SSRN: https://ssrn.com/abstract=2487761 or http://dx.doi.org/10.2139/ssrn.2487761

Marzio Galeotti (Contact Author)

University of Milan - Department of Environmental Science and Policy (ESP) ( email )

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Milano, 20133
Italy
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+39-2-50316486 (Fax)

HOME PAGE: http://www.unimi.it/chiedove/cv/ENG/marzio_galeotti.pdf?1531977155891

GREEN - Centre for Research on Geography, Resources, Environment, Energy & Networks ( email )

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Milan, 20123
Italy
+39-2-58362340 (Phone)

HOME PAGE: http://https://www.green.unibocconi.eu

Yana Rubashkina

Catholic University of the Sacred Heart of Milan ( email )

Milan, Milan
Italy

Silvia Salini

University of Milan - Department of Business Policy and Economics (DEPA) ( email )

Milano, I-20122
Italy

Elena Verdolini

Fondazione Eni Enrico Mattei (FEEM), CMCC - Euro Mediterranean Centre for Climate Change ( email )

C.so Magenta 63
Milano, 20123
Italy

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