Department of Economics

Public and Environmental Economics

We have a rich portfolio of research in public and environmental economics. We are interested, for example, in: climate change; corruption; health; international environmental treaties; social disorder; social norms; wage discrimination; waste disposal and recycling.

Members of the group publish in leading economics journals, such as the Journal of Public Economics, the Economic Journal, the Journal of Economic Behavior and Organization and the Journal of Environmental Economics and Management. Some of our recent working papers and publications are listed in the sections below.

We contribute to numerous externally-funded international research projects, in collaboration with scholars across Europe.

Our professional activities also include: editorial membership, policy reports and consultancy work for major public sector organisations.

Research Centre

International Centre for Sustainable Energy and the Environment icon

We also work closely with the International Centre for Sustainable Energy and the Environment (I-SEE).

I-SEE aims to focus, integrate and enhance fundamental and applied research on sustainable energy and the environment.

View some of our work surrounding environmental economics, including projects investigating recycling, water management and climate treaties.

View more videos »

Research focus

While the areas of expertise within the group are manifold, there are several key areas of research that link different members of the group:

  • The analysis of social norms.
  • Unlawful behaviour including corruption, tax evasion, crime, and social unrest.
  • Climate change, national and international environmental regulations.

Recent publications

Some of our recent research includes:
  • Mishra together with Sarangi examine high powered incentives and communication failure in Journal of Economic Behaviour and Organisation (forthcoming)
  • Mishra with Samuel examine the case of pre-emptive bribery in an incomplete information setting in Journal of Public Economic Theory (forthcoming)
  • Wenzel with others studies demand shifts due to salience effects in Journal of the European Economic Association (forthcoming)
  • In the European Journal of Law and Economics, Mishra and Samuel (2016) examine corruption and the potential for hold-up.
  • The proposition that fiscal illusion increases the cyclicality of government expenditure is explored in Abbott and Jones (2016) in Scottish Journal of Political Economy.
  • Marengo and Zeppini (2016) explain path-dependence and punctuated equilibrium in technological innovation in Journal of Evolutionary Economics.
  • In the Journal of Behavioral and Experimental Economics, Cullis and Jones with others (2015) identify and explore the behavioural anomaly that individuals who are very condemnatory of public finance crimes are more likely to engage in public finance crimes.
  • Wenzel shows in Economic Letters (2015) that in certain cases, firms engage in partial shrouding of add-on costs.
  • Zeppini (2015) shows how social interactions lead to multiple equilibria in green technology adoption in Journal of Economic Behaviour and Organisation.
  • In Barile, Cullis and Jones, 2015, Journal of Behavioral and Experimental Economics, the authors focus on the efficacy of a ‘nudge’ to increase willingness to recycle household waste. 
  • Jones with others (2015) explore the proposition that, within federations, political pressures increase the likelihood that intergovernmental transfers and state expenditures will be procyclical in European Journal of Political Economy.
  • Recently Tsutsui published in Frontiers in Psychology with his coauthors. Their lab experiments examined whether the individual pro-sociality that is revealed in the public goods and trust games when interacting with fellow group members helps predict individual parochialism, as measured by the in-group bias.

Research-related activites

We also engage in several other research-related activities, such as editorial board membership and consultancy. Current examples include:

  • Michael Finus is co-editor of Environmental and Resource Economics and has edited several special issues for Environmental and Resource Economics and the Journal of Environmental Economics and Management.
  • Ajit Mishra has visited the World Bank to work on corruption related issues (including participating in a workshop in March 2016). He visited Ashoka University (a new private university in India) and Delhi School of Economics, Delhi India. Ajit organised a very successful workshop on Shared Prosperity and Inequality in November.
  • Kei Tsutsui together with Ajit Mishra secured a British Academy small grant to study the process of bribery using laboratory experiments.
  • Paolo Zeppini visited Universitat Autonoma de Barcelona and Utrecht University working on a probabilistic model of technology competition for power generation and models of innovation diffusion on social networks respectively.
  • Paolo also presented at the recent Glamurs consortium meeting held in Leipzig.
  • Lucy O’Shea visited the Centre for Study of Social Exclusion and Inclusive Policy (CSSEIP) Manipur University as an invited speaker at the workshop on Sustainable Lifestyles and Social Exclusion

Research staff

  • Dr Christian Almer (visiting member) is an applied econometrician currently working on a variety of projects including the determinants of successful international environmental treaties, the causes and consequences of social unrest in developing countries and the effects of environmental shocks on the housing market. E.g., two recent working papers analyse i) strategic behaviuour of countries during the ratification process of the Kyoto Protocol and ii) the effectiveness of Kyoto emission targets with respect to reducing greenhouse gas emissions (both with Ralph Winkler, University of Berne). Furthermore, Christian is working on a project analysing the impact of income shocks on the prevalence of rioting in Sub-Saharan Africa (with Jeremy Laurent-Lucchetti, University of Geneva and Manuel Oechslin, Tilburg University). Another recent project analyses the impact of aircraft noise on the housing market using data from a major online housing platform and exploiting an exogenous shock in aircraft noise at Zurich airport (with Stefan Boes, University of Lucerne and Stephan Nueesch, University of Munster). More generally, Christian’s research focuses on two particular questions: First, to what extend do different types of environmental factors (such as weather, pollution) affect human well-being (health, social unrest or income)? Second, how effective are different types of environmental policies on the national and international level?
  • Lory Barile’s (associate member) research interests are in the fields of Behavioural and Experimental Economics, Public Sector Economics, Environmental Economics and Applied-Microeconomics. Her research is currently focused on understanding how insights from Behavioural Economics can be used to nurture pro-environmental behaviour. In particular, she is working on assessing the impact of environmental morale on individuals’ behaviour. Using experimental survey analyses, she is investigating how environmental morale interplays with individuals’ behaviour within two different contexts: recycling participation under different policy schemes (such as mandatory vs. facilitating nudge policy schemes), and inter-temporal choices. The focus is on how the interactions between intrinsic and extrinsic motivations as well as factors that affect discounting are likely to inform the design of environmental policy. Both analyses are pertinent to the ongoing debate over (i) the adoption of a more libertarian paternalistic role of Governments, and (ii) the fragility of a prescriptive approach to discounting. Simultaneously, she is carrying out experimental research on incomplete crowding-out of charitable giving (within the context of tax-financed contributions provided by governments). Her research interests also comprise individuals’ attitudes towards firms’ tax evasion, and the effect of sales taxes on consumers’ and producers’ behaviour in light of the most recent VAT reforms.
  • Professor John Cullis has a longstanding interest in public sector microeconomics broadly defined. In particular his interests have been health economics, public choice and more recently behavioural and neuroeconomics. He is the co-author with Professor Philip Jones of Public Finance and Public Choice, which is in a third edition with OUP, and a microeconomics text. His recent journal publications relate to the analysis of questionnaire data on tax evasion placed in a prospect theory context. He is currently working with Lory Barile and Philip Jones, a long time collaborator, on material that relates to ‘environmental morale’ and recycling. Part of this work is about isolating circumstances when popular ‘nudge’ type policies are likely to be effective. He also has a paper with Bruce Morley on estimating the size of the cash economy in Europe using an announcement effect of a decision to join the Euro. As part of his current work he is also interested on the role and rationale of social norms in a behavioural economics perspective on economics. His teaching includes a final year unit on Behavioural, Experimental and Neuroeconomics and consistent with this he finds interdisciplinary approaches to academic issues and problems attractive. Other units he currently lectures on are international trade, international monetary economics and growth theory.
  • Professor Michael Finus is currently working on various issues related to public good provision and coalition formation in the presence of free-rider incentives. One project deals with optimal transfer schemes in the presence of heterogeneous players. The focus is on how such a transfer scheme should be designed in order to maximise total welfare and how the degree of heterogeneity affects the success of cooperation. The theoretical foundations of such a transfer scheme are analysed in collaboration with Professor Johan Eyckmans, University of Leuven, Belgium and Professor Lina Mallozzi, University of Naples, Italy. An application to international environmental agreements is researched with Professor Matt McGinty, University of Milwaukee, USA. Another project departs from the assumption of a summation technology of public good provision and tries to understand how other technologies, like weakest-link or best-shot technologies affects the success of coalition formation. This line of research is conducted in collaboration with Professor Alejandro Caparros, Institute of Public Goods and Policies, CSIC, Madrid, Spain, who is a regular and frequent visitor at the Department. In the context of climate change agreements, Michael is looking in a strategic context how adaptation impacts on the success of mitigation strategies and vice versa. This work is conducted with Dr Basak Bayramoglu, UMR Economie Publique, INRA, Paris and Professor Jean-Francois Jacques, University of Dauphine, Paris, France. This research is funded through the FP7 project EconAdapt (Economics of climate change adaptation in Europe). He also investigates how uncertainty, risk and learning impact on the formation of climate treaties with his PhD student Leyla Sayin and the role of issue linkage for the success of international environmental agreements, including tax border adjustments, with his PhD student Alaa Khourdajie. A very different type of research is conducted in the FP7-project GLAMURS (Green Lifestyles, Alternative Models and Upscaling Regional Sustainability) with the aim to develop a theoretically-based and empirically-grounded understanding of the main obstacles and prospects for transitions to sustainable lifestyles and a green economy in Europe, as well as of the most effective means to support and speed them up. Michael is the PI of this project which he conducts with his colleagues Dr Lucy O’Shea, Professor Shasi Nandeibam, Dr Sunčica Vujić and the postdoc researchers Dr Christian Gross and Dr Paolo Zeppini.
  • Dr Christian Gross is currently working on a variety of research projects including the behavioral foundations of sustainability transitions and econometric analyses of the macroeconomic relationship between energy use and economic growth. The underlying idea that connects both areas of research is that many reasons for the macroeconomic coupling between energy use and economic growth can be found at the individual or societal level. This includes pro-environmental attitudes, habits, self-licensing effects, and so on. His research on behavioral foundations of sustainability transitions is embedded in the EU FP7 project Green Lifestyles, Alternative Models and Upscaling Regional Sustainability. The project develops a theoretically-based and empirically-grounded understanding of the main obstacles and prospects for transitions to sustainable lifestyles and a green economy in Europe. His work on the macroeconomic relationship between energy use and economic growth includes, among others, a Meta-analysis of the entire empirical literature that has been published on energy-GDP Granger causality. The results indicate that, indeed, there is a causal relationship between energy use and economic growth, which raises some doubts about the expectations for de-coupling economic growth from environmental degradation. Follow-up projects include, for example, analyses of the long-run, that is cointegration, relationship between energy use and economic growth considering also the role of structural change and international trade.
  • Dr Alistair Hunt is a research Fellow in the Department of Economics and specialises in the Economics of the Environment. His research is applied and relates directly to the formulation of environmental policy. Current areas of interest include climate change risks and adaptation at different geographical scales; the development of marine policy in European waters and; non-market valuation, with focus on stated preference methods and value transfer. With regard to climate change research, Alistair is a Contributing Author to the Fifth Assessment Report of the Inter-governmental Panel on Climate Change and provided advice to the Stern Report on the economics of climate change. He currently co-ordinates the EU FP7 research project on the Economics of Adaptation in Europe (ECONADAPT) and led the economics on the recent UK Climate Change Risk Assessment for Defra. Alistair has provided economic research to the EU programme of research on the external costs of energy and transport (EXTERNE) and also led the economic analysis of the Clean Air For Europe regulatory impact assessment. He specialises in the monetary valuation of health impacts from environmental pollution, including from air pollution and industrial chemicals. Alistair has a wide range of journal and book publications, including Environmental and Resource Economics, Climatic Change and Proceedings of the National Academy of Sciences of the United States of America.
  • Alaa Al Khourdajie’s (PhD student) research interests are currently focused on the formation and stability of international climate change agreements using methods from the non-cooperative game theory literature. In particular, he is investigating the implications of forming joint coalitions of climate change agreements and trade agreements; namely free trade areas and customs unions. He is also addressing the case of using trade policy instruments in climate change agreements such as border tax adjustments, which are used to adjust for the carbon taxes’ differentials between members and non-members of the agreement. The motivation for his research is to understand whether these forms of linkages could mitigate the strong free riding incentives typically exhibited in climate change agreements as well as mitigate carbon leakage and loss of competitiveness resulting from undertaking unilateral or sub-global climate actions. The outcomes of his research will be defined in terms of implications on the stability and effectiveness of climate agreements, as well as in terms of the welfare and membership implications from both climate and trade policy perspectives. Given his past work experience, he also has research interests in assessing the domestic economic implications, in terms of jobs and GVA, of sustainable energy policies.
  • Professor Philip Jones is interested in a number of different topics in public sector economics and public choice. In recent years he has published work on the determinants of tax compliance. At present, he is working on differences in attitudes to tax evasion and to benefit fraud (in the UK and in Italy). He has published work on the determinants of procyclical government spending. Currently, he is working on the impact that fiscal illusion exerts on government spending over the economic cycle. He has published work on the impact that altruism exerts on the provision of public goods. More recently, he has been working on the voluntary provision of impure public goods (comparing welfare at a Nash equilibrium and at a Pareto- efficient allocation of resources). He has published research on the extent to which governments are able to ‘nudge’ individuals to increase their contributions to pension funds and to extend their working life. He is now interested in the extent to which governments are able to ‘nudge’ individuals to increase pro-environmental behaviour. He is interested in the conditions that must apply to argue that soft paternalism (e.g. a ‘nudge’) is likely to be more effective than hard paternalism (e.g. regulation).
  • Mr Thanos Mergoupis's research interests are in labour economics and political economy. His labour economics research focuses on labour market discrimination. His current research is on the effects of changing population composition on relative wages and employment rates when wage discrimination is present in the labour market. He is willing to supervise any empirical or theoretical topic related to labour market discrimination or any other mechanism that generates racial/gender economic inequalities. His political economy research focuses on the interaction of political and market mechanisms. He is currently researching the informational content of ordinal index preferences as revealed by individuals and bureaucracies. He is willing to supervise any theoretical or empirical topic related to the effects and/or properties of mixtures of political and market resource allocation mechanisms. His research on the effects of internships is at the intersection of labour and public economics. His current research focuses on the academic performance effects of internships (or placements) and addresses questions such as: Does training complement formal education when training precedes formal education? To what extent can this complementarity be broken down to non-cognitive skills on the one hand and subject specific skills on the other? To what extent can we generalise across different subjects when formal education reaches the degree of specialisation found in upper level university courses? Currently, Thanos also has an opening for a PhD student with the project The Political Economy of Greek Local Government.
  • Dr Ajit Mishra is working on issues related to corruption. Corruption is pervasive in many developing countries and often corruption has an air of invincibility about it. Attempts to control one form of corruption lead to other forms of corruption. Anticorruption measures aimed at curbing collusion often lead to extortion. Likewise, efforts to deter ex post bribery can facilitate ex ante bribery. His research explores the implications of this and other types of trade-offs. He is also looking at the role of middleman and the relevance of intermediation in the context of corruption. In a related research, he is investigating the link between informality (the size of informal sector) and corruption. The informal sector normally refers to all the legal but unreported activities in the economy and it is sizeable in several developing countries. Besides several journal articles, he is currently working on a book project on corruption titled “Corruption: An Agency Perspective”. His other research includes the conceptualisation and measurement of vulnerability and security. Broadly speaking, vulnerability to poverty refers to the possibility that an individual or household would face poverty in future. There is now a growing realisation that developmental efforts should not be confined to targeting the poor only, rather it should be widened to include those who are vulnerable.
  • Leyla Sayin (PhD student) is interested in the game theoretic analysis of international climate change agreements and in particular in research combining the issues of free-riding and uncertainty. Large uncertainties surrounding global climate change is believed to be one of the reasons behind the low participation in international climate change agreements. For instance, it is not possible to fully forecast the global environmental damage caused by greenhouse gases. Moreover, the distribution of environmental damage among regions is not certain, consequently constituting an uncertainty regarding the distribution of benefits from emission reductions. In addition, future abatement costs are not fully known. Thus, the parameters of the payoff functions are uncertain, and assumptions on parameters as well as functional forms are needed to be able to analyse the effect of uncertainty on coalition formation. Uncertainty can of course be resolved through learning over time, and naturally enough, its impacts on the coalition formation are needed to be taken into consideration. However, most of the literature uses static models, and assumes perfect learning (i.e. no uncertainty remains once the information is revealed); even though learning is hardly perfect in reality, and takes place gradually. Leyla aims to explore various forms of learning, like Bayesian learning, learning-by-doing and learning-by-research in a dynamic framework to analyse how resolution of these uncertainties affects the success of the agreements in terms of participation, global welfare, and abatement levels.
  • Dr Lucy O'Shea (group leader) is interested in the behavioural aspects of pro-environmental actions generally and waste reduction particularly. Along with her co-authors, she has investigated the role social norms and warm-glow potentially play in recycling behaviour. She is currently working on an EU FP7 project which aims at examining what constitutes sustainable lifestyles, the role of psychological factors in determining sustainable lifestyles and how the adoption of such lifestyles can be encouraged (see Past research has examined the incentives to carry out R&D in crops genetically modified for pest resistance when faced with competition from two sources: rival firm and pests. Her other area of interest is non-point source pollution, e.g. much of agricultural pollution is of this type. In relation to this, she has consulted on a project concerned with identifying potential remedies for air pollution, in particular, nitrogen. In bringing her research of waste management forward she is also looking at the production side of recycling services, in particular on public-private partnerships and their scope for delivering environmental improvements. Ideas for future research involve developing further the analysis of individual behaviour in determining the decision to undertake pro-environmental actions and participate in national environmental agreements, both in the context of developed and developing countries.
  • Dr Sunčica Vujić's (visiting member) research interests are in the field of empirical/applied micro/macro econometrics and labour economics, with a focus on education, crime, health, and the position of different groups in the labour market, such as: (1) Youth at risk of crime, unemployment, and teen pregnancy; (2) Labour market position of women – gender pay and pension gaps, career progression and glass ceiling; (3) Inequality and intergenerational mobility – equalisation of educational attainment of those from different socioeconomic backgrounds as an important tool for improving the equality of opportunity in society. For example, her published research in the area of economics of education focuses on private as well as social returns to education, in terms of long-term human capital accumulation and crime reduction. Geographic focus of her research has so far been the UK, the Netherlands, and the transition and emerging market economies in the Western Balkans (e.g., Serbia, Macedonia, and Montenegro). Sunčica's research reflects a steady trajectory of interdisciplinary approach, whereby she uses a rich set of econometric tools applied to multi-source (survey and recorded) and multi-dimensional (crosssectional, panel, time series) data. A choice of a particular research topic is usually driven by the policy concerns, data availability, funding source, potential for collaboration and/or own research interests based on wider academic and non-academic reading.
  • Dr Tobias Wenzel conducts research in the area of Applied Microeconomics and Industrial Economics.  His research has been published in journals such as Journal of Industrial Economics, International Journal of Industrial Organisation and Journal of Economic Behaviour and Organisation. Tobias current research focuses on competition and regulation in markets where consumers make imperfect decisions are and can be exploited by firms.
  • Dr Paolo Zeppini is presently working for the GLAMURS EU FP7 project: Green Lifestyles, Alternative Models and Upscaling Regional Sustainability. Here he develops and calibrate micro-economic models of consumers’ behaviour for sustainability transitions, extending economic decision making with state-of-the-art psychology theories of social innovation.

Funded research projects

We have been part of various large-scale research consortia funded by major institutions including the European Commission, European Union (FP7), and ESRC. Currently, we contribute to projects worth more than £9.7 million.

Project title People and partners Funder
The Design of Policy Measures for the Success of Future Climate Agreements in the Light of Uncertainty, Risk and Learning Ashworth PhD Scholarship
University of Bath International Research Partnership Scheme University of Bath
Green Lifestyles, Alternative Models and Upscaling Regional Sustainability (GLAMURS) EU-FP7
The economics of climate change adaptation (Econadapt) EU-FP8
Aster Housing Association climate change risk and cost diagnosis Technology Strategy Board
Knowledge-based Sustainable Management for Europe’s Seas (Knowseas) EC DG
Teen Childbearing and Education: Evidence from Education Expansion British Academy
Connecting Data across Public Services in Bath and North East Somerset Cabinet Office/BANES Council
Nudge-it: The Neurobiology of Decision-Making in Eating - Innovative Tools EU-FP7
Examining the variation in household recycling rates across the UK ESRC
The mixed-methods research and evaluation methodologies in education KTP-OPM
Using Financial Diaries Data to Assess the Impact of Financial Services on Livelihoods of Low Income Individuals and Households and their Gender Dimensions in Kenya FSD Kenya
Towards Sustainable & Equitable Financing of Higher Education in Bosnia and Herzegovina, Montenegro and Serbia EU-Tempus