FEEM working papers "Note di lavoro" series
2014 .090

Environmental Policy Performance and its Determinants: Application of a Three-level Random Intercept Model


Authors: Marzio Galeotti, Yana Rubashkina, Silvia Salini, Elena Verdolini
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Type: Journal
Keywords: Energy Policy, Environmental Policy, Ranking, Policy Portfolios
JEL n.: Q58, O57, C33
Pages: Volume 114, 2018, Pages 134-144, ISSN 0301-4215
Published in: Energy Policy

Abstract

We propose the use of a three-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 eff ect of economic and institutional observables which a ffect 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.

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Suggested citation: Marzio Galeotti, Yana Rubashkina, Silvia Salini, Elena Verdolini, Environmental policy performance and its determinants: Application of a three-level random intercept model, Energy Policy, Volume 114, 2018, Pages 134-144, ISSN 0301-4215, https://doi.org/10.1016/j.enpol.2017.11.053

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Environmental Policy Performance and its Determinants: Application of a Three-level Random Intercept Model

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