Environmental Policy Performance and its Determinants: Application of a three-level random intercept model

Marzio Galeotti, Yana Rubashkina, Silvia Salini () and Elena Verdolini

No 71, IEFE Working Papers from IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy

Abstract: We propose the use of a two level random intercept model to measure the degree of environmental policy performance of different 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 difficulty 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 effect of economic and institutional observables which affect 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 efficiency 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 (search for similar items in EconPapers)
JEL-codes: C33 O57 Q58 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2014
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Environmental policy performance and its determinants: Application of a three-level random intercept model (2018)
Working Paper: Environmental Policy Performance and its Determinants: Application of a Three-level Random Intercept Model (2014)
Working Paper: Environmental Policy Performance and its Determinants: Application of a Three-level Random Intercept Model (2014)
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