This paper examines the economic implications of evolving water availability with a twofold objective. Firstly, it provides an overview of the problem of economic modelling of water in a general equilibrium context. To this aim, it presents both a general discussion of key issues and a review of CGE models that have attempted to deal with water as a key economic input and its direct and indirect influence on markets and well-being. Secondly, it addresses a crucial gap in the research work to date, by developing and implementing a global CGE model that incorporates the economic impacts of both precipitation and total water storage (TWS) – an aggregate measure encompassing soil moisture, surface water, and groundwater. By integrating these key variables, alongside a detailed representation of how water enters in the different value chains, the model provides novel suggestions and a better understanding of how water availability influences economic activity across sectors. Simulation results from the model are then used to provide insights into the question of the “cost of inaction”, that is the failure to engage in proactive economic policies under various water-related scenarios, including those driven by climate change.

• Richard Damania World Bank
• Pasquale Lucio Scandizzo University of Rome “Tor Vergata”

SITES Working Papers 21

Natural disasters are on the rise globally, more than doubling since 1990. Scholars highlight the spike in unprecedented events, tripling from 1975-1984 to 2005-2014. Over 1 million deaths and $1.7 trillion in damages occurred across the globe, with 95% hitting developing nations. Amidst this, organizational culture and language policies play a vital role in optimizing emergency healthcare responses. The COVID-19 pandemic underscored global health system preparedness and innovation. Investigating the impact on healthcare workers and the environment of knowledge transfer is crucial. This study examines the significance of language and organizational culture in healthcare systems, particularly during emergencies like the recent pandemic and natural disasters. It focuses on the makeshift hospitals built in Wuhan, China, during the early stages of the pandemic as case studies. The research analyzes management literature from these hospitals using tools from organizational management theory, system language management theory, and critical discourse studies. A systematic review of the literature maps findings onto a new framework, revealing differences in communicative systems aligned with organizational culture. Results indicate that while there is ample information about hospital construction and technical procedures, discourse on staff management and organizational culture is limited and often influenced by broader ideological values. The study suggests that effective language management, is crucial for managing staff and maintaining public perception during emergencies. It emphasizes the importance of considering external influences on healthcare organizations and the need for strategic communication to ensure public satisfaction and trust. Inclusive bi-directional communication fosters a safe working environment, while authoritative tones with clear instructions are effective during crises. Despite extensive literature on crisis language management, detailed linguistic measures within organizational frameworks remain underexplored. As natural disasters escalate, resilience-building through organizational culture and language becomes imperative. From the findings of this contribution novel insights and application in management practice is revealed, which could prove most useful in dynamic environments to safeguard performance quality and contribute to improvements going forward.

• Earle du Plooy University of Verona (Italy)
• Tommaso Pellin University of Bologna (Italy)

SITES Working Papers 19

This paper examines the validity of the tourism-led economic growth hypothesis for the Euro Area economies. We employ linear and nonlinear autoregressive distributed lag cointegration approaches to examine the symmetric and asymmetric effects of tourism on economic growth. Furthermore, we control for the presence of structural breaks in the time series which account for the recent financial and debt crises in the Euro Area. The results support the positive impact of tourism on economic growth for most of the Euro Area economies and are robust to alternative tourism measures. The findings indicate that an asymmetric impact exists both in the long and the short run. Positive and negative shocks of tourism and real exchange rate result to very different effects, in the sign and magnitude, on economic growth.

• Dimitrios Bakas Nottingham Business School, Nottingham Trent University (UK) and Rimini Centre for Economic Analysis (RCEA) (USA)
• Ioanna Konstantakopoulou Centre for Planning and Economic Research (Greece)
• Athanasios Triantafyllou IESEG School of Management, Univ. Lille (France)

SITES Working Papers 20

This paper presents a new methodology of project evaluation based on the use of a social accounting matrix (SAM). The method proposed considers both the project as an autonomous shock and as an endogenous activity, thus capturing both the demand and the supply side effects, that can be associated to investment. In assessing project impact, these two effects have to be considered complementary, even though they may be combined in different proportions and with different strength in different practical cases. The autonomous dimension is however a distinctive feature of a project as an economic concept. Its consideration has important implications to assess the structural impact of a project as an activity ranging complete isolation to total embeddedness in the economic system. The paper also shows that both in its construction and operational phases the project displays structural effects on the economic system and that these effects may be sizable and may be partly offsetting the direct impact of the project on demand and supply variables.

• Scandizzo Pasquale Lucio University of Rome “Tor Vergata” and OpenEconomics
• Cufari Daniele Independent Researcher

SITES Working Papers 18

This study examines the impact of a public education policy targeting women’s education on the domestic violence faced by women in India. We use the 2015-16 Demographic Health Survey (DHS) and exploit a regression discontinuity design for a large-scale school construction program, the District Primary Education Program (DPEP), launched in 1994 in India. We find that the program increases women’s education by 0.95 years and decreases different forms of domestic violence: a 13% decrease in emotional domestic violence, a 27% decrease in less severe physical domestic violence, a 9% decrease in sexual violence, and a 10% decrease in injuries due to domestic violence. We explore potential mechanisms and find no improvement in female labor force participation, cash income, and the intrahousehold decision-making power of women. However, we find a significant improvement in the gender beliefs and attitudes of women, as they do not justify domestic violence. Educated women also marry wealthier men who have better gender attitudes and beliefs. Finally, we find that treated and more educated women have better access to information and potentially seek more help from law enforcement authorities, which means an increase in the likelihood of reporting domestic violence to authorities. This could lead to a higher opportunity cost of committing domestic violence for husbands/partners and translate into less domestic violence. Overall, we find strong evidence for improvement in gender attitudes and beliefs, better partner quality, and improved access to information for women.

• Madhuri Agarwal NFER
• Vikram Bahure King’s College London
• Katja Bergonzoli University of Lausanne
• Souparna Maji University of Geneva

SITES Working Papers 17

This study estimates the socio-economic impact of investments related to the Institutional Development Contract (CIS) for the city of Taranto on different categories of households, labor markets (skilled and unskilled), and enterprises in Italy by developing a multi-regional SAM (MR-SAM) model with inter-regional trade. The model is designed and implemented both at the level of Apulia region, to estimate the intraregional impact, and at the national level, to estimate the interregional spillover effects and the supply chain linkages. The study finds that the interregional effects are more than one half of the intraregional ones, with more than 26 percent of the interregional impact accruing to the Lombardy region and about 60 percent captured by the regions in the North of Italy. The model also shows that while the local Taranto economy is highly connected with the rest of the Apulia region, it has only weak linkages with the regions of Southern Italy. The ratio between the impact on added value at the national level and the total investment of the CIS is slightly more than 2. The study also suggests that impact analyses considering the area on which the public investment is developed as an island unconnected to the entire economic system may be misleading, because they provide no information about the propagation of the effects outside the administrative limits of the local economy, even though these effects may be crucial to fuel a desirable regional distribution of economic growth.

• Darlington Agbonifi Department of Economics, University of Verona
• Daniele Cufari Department of Economics, University of Verona
• Riccardo Magnani
• Francesco Pecci
• Federico Perali Department of Economics, University of Verona
• Pasquale Lucio Scandizzo

SITES Working Papers 15

Scientists are in agreement that climate change is a real threat to people and the planet, worldwide. Human activities are believed to be the primary cause for this change. In countries, such as Namibia, in which the majority of people in rural areas largely depend on rainfed agriculture and water resources for their livelihood, the rapid changing climate may mean that more people will likely move to the urban centres, no matter restrictive migration measures in place. The intricate relationship between climate change and human mobility, however, is a phenomenon not yet very well-articulated or established. In Namibia, while migrating to an urban area in some instances might offer potential opportunities -in the form of employment, better economic status and standard of living for migrants- but the move not only comes with negative effects and challenges for the migrants but also for urban governance in delivering services to the increasing urban masses. This study used a hybrid methodological approach by which a critical analysis and the consolidation of the existing literature on climate change, migration and urbanisation was combined and complemented with supplementary in-depth interviews carried out with 13 participants with a migratory background. The objective of the study was to investigates the nexus between climate change and migration, and subsequently examines the relevance of climate induced rural-urban mobility in Namibia. The findings of the study indicate that Namibia’s increasing changing climate patterns magnifies the existing problems of rural-urban migration, resulting in Namibia’s internal migration phenomenon to be determined by more than the usual factors of rural-urban migration.

• Bruno Venditto Institute for Studies on the Mediterranean – ISMed-CNR
• Ndumba J. Kamwanyah University of Namibia, UNAM
• Christian H. Nekare University of Namibia, UNAM

SITES Working Papers 14

• Giovanni Andrea, Cornia < giovanniandrea.cornia@unifi.it > - Department of Economics University of Florence

SITES Working Papers 13

In times of pandemic, according to the survey on the living conditions of the elderly and the quality of their relationships recently conducted by the research group of the REDESIGN project, the economic aspects have been significantly influenced especially for the elderly who live alone, objectively more exposed to the risks of the health emergency. From this point of view, the Italian welfare, which prefers the protection of the elderly, seems to have effectively mitigated the economic impact regardless of income and region of residence, but has shown limits in preventing and treating the intangible aspects related to the non-cognitive, affective and relational sphere of the great elderly, especially for the most fragile and lonely. In general, the willingness to pay is associated both with the need for relationships and with the ability to give, for example, on the part of those who are more sociable or place more trust in others, regardless of financial possibilities. The decision on how much to donate seems instead dominated by purely economic variables. The study estimated that the average level of willingness to pay of the elderly for social networks is 94 euros. This could generate potential funding of around €365 million that Italian communities can mobilise. As a lesson for the future, it will be important to understand how communities and philanthropic institutions of financial intermediation, such as community foundations, can foster the development of autonomous networks to improve the quality of life of the elderly and, at the same time, create the conditions to improve the prevention of situations at high risk to health.

• Federico Comes Department of Economics, University of Verona
• Martina Menon Department of Economics, University of Verona
• Federico Perali Department of Economics, University of Verona

SITES Working Papers 12

We propose a methodology inspired by ecology to map the complex interdependencies between cultural and institutional factors - controlling for other socioeconomic and structural characteristics. We characterize interdependencies as asymmetric symbiotic relations, distinguishing between ‘hosts’ that nurture other factors and ‘symbionts’ that reversely feed on the former. We use correlation network analysis to compute a map of multiple such interdependencies for Brazil, which has a vast territory, internally diversified historical paths and a multilevel governance structure. We set the empirical analysis at the municipality level and find that institutional factors tend to be symbionts, whereas cultural factors tend to be hosts. However, our results also show that institutions assume multiple roles within a complex network of interdependencies, often becoming themselves habitat for others or transmittors of indirect effects.

• Nadia von Jacobi Department of Economics and Management, University of Trento
• Vito Amendolagine Department of Economics, University of Foggia

SITES Working Papers 11

In this paper we build a simple model on the role of liquidity preference in the determination of economic performance. We postulate, for the sake of the argument, a purely “horizontalist” environment, i.e., a world of endogenous money where the central bank is able to fix the interest rate(s) at a level of its own willing. We show that even in such a framework liquidity preference, while obviously not constituting anymore a theory for the determination of the interest rate, continues to be a key element for the determination of both the level and evolution over time of aggregate income and capital accumulation. In our model, this happens because of the working of a mechanism so far unexplored in the literature, i.e., the endogenous variations of banks’ policy of profits’ distribution in response to changes in the liquidity preference of the public.

• Marco Missaglia University of Pavia
• Alberto Botta University of Greenwich

SITES Working Papers 10

This work analyses the causes of juvenile crime within a case-control study undertaken in the Italian regions of Veneto and Sicily. We show that family background matters. Parents’ education and family income have no effect on crime rates in the Veneto region but are significant risk factors in Sicily. Dropping out of school substantially increases the probability that an adolescent is involved in crime activities. Poor parental relations with children or living in a broken family significantly raises the odds to be in conflict with the law.

• Elena Dalla Chiara Interdepartmental Center of Economic Documentation (CIDE), University of Verona
• Federico Perali Department of Economics and CHILD, University of Verona

SITES Working Papers 9

This paper describes a new method to estimate shadow wages and to identify the shadow contribution of child labor. Our approach allows to perform a direct test for recursivity by comparing the estimated shadow wages with the market wage. This is a novel option to test for non-separability that adds to the traditional indirect tests based on restriction on production decisions or on consumption choices. Our innovative identification strategy is not specific to child labor but can also be used to identify the gender specific shadow wage of women and men. The estimated shadow wages, in the context of the Nepalese rural economy, are meaningful. Based on the evidence of our direct test for separability, we conclude that the separable representation of the farm households is not consistent with the Nepalese data. We further provide an estimate of the contribution of child labor to household income both at the household and national level. A set of simulations highlights the role that child labor plays in insuring household subsistence and how it affects Nepalese income distribution

• Elisa Meneghello University of Verona
• Martina Menon Department of Economics, University of Verona
• Federico Perali Department of Economics, University of Verona
• Furio Rosati University of Rome Tor Vergata

SITES Working Papers 8

This paper examines productivity drivers for Pakistani publicly listed firms over 2012–17, with a focus on policy and outcome measures of integration in upstream sectors. We find that increased import duties on intermediates, and reduced FDI in upstream services, are associated with reduction in productivities downstream. Gains from lower input tariffs accrue to firms that cannot secure duty exemptions — domestic-oriented firms and smaller exporters. Gains from upstream services FDI accrue mostly to firms that are further from the productivity frontier. Our results suggest that productivity growth in Pakistan would benefit from increased exposure of upstream sectors to global markets.

• Stefania Lovo Department of Economics, University of Reading
• Gonzalo Varela World Bank

SITES Working Papers 7

This study measures the many dimensions of poverty accounting for both the material and non-material dimensions of well-being. We are interested in learning whether an individual who is poor in the monetary dimension is also poor under a relational point of view, an especially relevant aspect in pandemic times. The monetary dimension alone, while often significantly correlated to other non-monetary aspects of well-being, is not sufficient to fully describe the non-material dimensions of need. Not all goods and services that are important to people are obtained from the market, such as relational goods. The use of a unique dataset that integrates the different dimensions contributing to quality of life permits estimating poverty for different types of income by adding wealth (current income), the value of domestic production (extended income) and the value of leisure (full income) to disposable income. These measures have been corrected to account for differences in household composition and in the cost of living and quality of services across regions. The study shows that the ability to produce domestic and relational goods, after taking the monetary dimensions in due account, are very important factors that redraw the map of poverty in Italy, especially in view of the North-South divide. These new traits require a radical rethinking of traditional policies to fight poverty.

• Elena Dalla Chiara Center of Economic Documentation (CIDE), University of Verona
• Federico Perali Department of Economics, University of Verona

SITES Working Papers 6

We evaluate the impact of climate shocks on household subjective wellbeing on a sample of farmers in a Small Island Developing State (SIDS) of the Pacific (the Solomon Islands). We find that both subjective (self-assessed exposure to climate shocks) and objective (past cumulative extended dry spells) environmental stress indicators significantly reduce respondent’s subjective wellbeing. Using the compensating surplus approach we calculate that this loss requires several years of crop income to be compensated. Subjective wellbeing is more severely impacted for farmers with poor dwellings (ie. with thatch walls, consistently with the well known Disney tale), below median income or durable asset and for farmers living more isolated and not being members of formal agricultural associations. Farmers hit by climate shocks experienced in significantly higher proportion nutrition problems in their households. These findings support the hypothesis of the strong interdependence between environmental and social shocks.

• Leonardo Becchetti University of Rome Tor Vergata
• Sara Mancini University of Rome Tor Vergata
• Sara Savastano University of Rome Tor Vergata and IFAD

SITES Working Papers 5

• Martina Menon
• Federico Perali
• Ranjan Ray
• Nicola Tommasi

SITES Working Papers 4

We evaluate the effects of population ageing on the macroeconomic evolution of the Lebanese economy and on the financial sustainability of its major pension schemes. We use an OLG model with labor market frictions in the as in de la Croix et al. (2013). Individuals are differentiated by age, gender, and education and choose the sector of activity, which implies that the size of the informal sector is endogenous. We assess the long-run implications of population ageing and show that the public sector pension scheme is unsustainable while the private sector scheme is insufficient to ensure decent living standards for the elderly. Finally, we evaluate the effects of two pension reforms; in the first one we propose a mix of measures aiming at guaranteeing the sustainability of the public sector scheme; in the second one we propose some measures aiming at increasing the size of the private sector scheme.

• Marie Claude Kamar Université Saint Joseph
• Riccardo Magnani Université Sorbonne Paris Nord and CEPN

SITES Working Papers 3

This paper describes how families bargain to reach an agreement recognizing that the negotiation process is costly and often difficult. Our focus is not only on the efficient outcomes of the decision process but also on the bargaining process. We propose an evolutionary bargaining approach that identifies who is willing to make a concession depending on the perceived cost of bargaining failure. The theoretical analysis extends the original Nash-Harsanyi cardinal representation to ordinal preferences and rationalizes agreements that can be inefficient. Implications for efficiency and income distribution are discussed. We illustrate the usefulness of our theory in an empirical application.

• Jean-Paul Chavas Department of Agricultural and Applied Economics, University of Wisconsin-Madison
• Eleonora Matteazzi Department of Economics, University of Verona
• Martina Menon Department of Economics, University of Verona
• Federico Perali Department of Economics, University of Verona

SITES Working Papers 2

We estimate a collective complete demand system model to recover children’s resource shares and analyze their poverty. Identification of the sharing rule between children and adults relies on private assignable goods and distribution factors. Based on Ethiopian LSMS-ISA data for two subsamples of families with children (married male-headed and single female-headed), we observe inequalities in intrahousehold resource allocation and well-being. We find that children command fewer household resources and are poorer than adults, worsening with the number of children. Resource allocation is affected by parental differences in education and age, child education, proportions of female children and women, and the number of non-biological children. Single mothers not only are more altruistic to their children but also avoid higher child poverty than married male heads. However, this seems to disappear when the number of children increases. Unlike the general belief that poor children live only with poor adults and households, our estimates show non-poor families and adults also host poor children. Regional and rural-urban disparities exist. Further, traditional poverty measures, which ignore intrahousehold resource allocation, understate child (and adult) poverty. Findings have implications for fertility, gender, targeting, and spatial redistribution issues.

• Getachew Yirga Belete Department of Economics, Bahir Dar University
• Martina Menon Department of Economics, University of Verona
• Federico Perali Department of Economics, University of Verona

SITES Working Papers 1