Evaluation of investment support. in the Austrian RDP: Comparison of results

Transcription

1 Evaluation of investment support in the Austrian RDP: Comparison of results Karl M. Ortner ERDN-Conference Belgrade,

2 Contents Overview of measures in the RDP Indicators Result indicators <> Impact indicators Measurement of impacts (M121) Results (Return to Investment) Methodology (PSM, DID, Regression) Benefit = Gross Value Added Labour Cost Impact of support payments Comparison Conclusions Results of measures Karl Ortner, BA für Agrarwirtschaft, Wien,

3 Measures of the RDP excl. AEP and CA Support Mio. (excl. Agri-Environment and Compensatory Allowance) Public support via RDP 07-13, in Mio., modernisation setting up value added rehabilitation forest infrastructure forest value of forests rural heritage infrastructure, agric. bioenergy (big) diversification, energy M311 tourism M313 new products/proc. M124 SMEs M312 village development Leader training (111) information technical support Karl Ortner, BA für Agrarwirtschaft, Wien,

4 Indicators for Investments Result Indicators (2) Change in Gross Value Added in supported enterprises (= gross) (7) Change in non-agric. Gross Value Added in supported enterprises (8) Gross number of Jobs created (9) Additional number of Tourists Karl Ortner, BA für Agrarwirtschaft, Wien,

5 Indicators for effects of investments Result Indicators (2) Change in Gross Value Added in supported enterprises (= gross) (7) Change in non-agric. Gross Value Added in supported enterprises (8) Gross number of Jobs created (9) Additional number of Tourists Impact Indicators (1) Net Change in Gross Value Added (2) Net Change in Employment (3) Change in Labour Productivity (Gross Value Added / AWU) Karl Ortner, BA für Agrarwirtschaft, Wien,

6 Methodology Propensity Score Matching (PSM) Setting up groups of comparable enterprises Participants in a measure similar non-participants Data base: Farm Accountancy Data Network (FADN) Difference in Difference Method (DID) Comparison of the development of the two groups Results of Dantler, Kirchweger, Eder, Kantelhardt (2010), University of Natural Ressources, Vienna) Karl Ortner, BA für Agrarwirtschaft, Wien,

7 Non-participants Change for non-participants x N x 0 Indicator x x N x 0 t 0 t 1 time Karl Ortner, BA für Agrarwirtschaft, Wien,

8 Participants Change for participants x T x 0 Indicator x x T x N change x 0 t 0 t 1 time Karl Ortner, BA für Agrarwirtschaft, Wien,

9 Effect (gross) Difference of changes = Effect (x T x 0 ) (x N x 0 ) = DID = (x T x N ) Indicator x effect x T x N change x 0 t 0 t 1 time Karl Ortner, BA für Agrarwirtschaft, Wien,

10 Effect < > Change Effect is independent of general developments! Change depends on them! Indicator x effect x T change x 0 time x N Karl Ortner, BA für Agrarwirtschaft, Wien,

11 Gross effects per holding (of M121) on Gross Value Added (during the utilisation period of the investment) EUR per farm GVA, nominal labour cost year Karl Ortner, BA für Agrarwirtschaft, Wien,

12 Gross effects per holding (of M121) on Gross Value Added, nominal and at base value (IR = 2 %) EUR per farm GVA, nominal GVA, real labour cost year Karl Ortner, BA für Agrarwirtschaft, Wien,

13 Gross effects per holding (of M121) on Returns to Capital, at base value (interest rate = 2 %) EUR per farm GVA, real returns to capital = gross value added (GVA) labour cost year Karl Ortner, BA für Agrarwirtschaft, Wien,

14 Benefit-Cost Analysis of investment support Effects of measure M121 (on average) changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 2,6 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

15 Benefit-Cost Analysis of investment support Effects of measure M121 (on average) changes per holding ( ) gross farm level without support GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 2,6 2,1 4,1 because of support Investment without support benefit / cost 6,2 net Karl Ortner, BA für Agrarwirtschaft, Wien,

16 Benefit-Cost Analysis of investment support Effects of measure M121 changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 2,6 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

17 Benefit-Cost Analysis of investment support Effects of measure M121 changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 ( 2,6 ) 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

18 Benefit-Cost Analysis of investment support Effects of measure M121 changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support? investment without support benefit / cost 2,1 2,6 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

19 Benefit-Cost Analysis of investment support Effects of measure M121 (on average per holding) changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 2,6 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

20 Benefit-Cost Analysis of investment support Effects of measure M121 (on average per holding) changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 ( 2,6 ) 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

21 Benefit-Cost Analysis of investment support Effects of measure M121 (on average per holding): gross and net changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 ( 2,6 ) 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

22 Benefit-Cost Analysis of investment support Effects of measure M121 (average per holding): gross and net changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 ( 2,6 ) 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

23 Benefit-Cost Analysis of investment support Effects of measure M121 gross and net changes per holding ( ) gross farm level without support net GVA nominal GVA real (2 %) labour costs real returns to capital real (benefit) investment of which government farm manager of which because of support investment without support benefit / cost 2,1 ( 2,6 ) 2,1 4,1 because of support Investment without support benefit / cost 6,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

24 Comparison of measures of the Austrian RDP Estimated gross effects on Gross Value Added, nominal measure support payments investment costs mio mio mio gross value added gross effect, nominal benefit per of per of investment costs M121 modernisation of farms ,6 2,1 M311b diversification (non-energy) ,1 M312 small/medium enterprises ,3 M313 tourism ,8 Karl Ortner, BA für Agrarwirtschaft, Wien,

25 Comparison of measures of the Austrian RDP Estimated gross effects on Gross Value Added, nominal measure support payments investment costs mio mio mio gross value added gross effect, nominal benefit per of per of investment costs M121 modernisation of farms ,6 2,1 M311b diversification (non-energy) ,1 M312 small/medium enterprises ,3 If support does not induce additional private investments M313 tourism ,8 Karl Ortner, BA für Agrarwirtschaft, Wien,

26 Comparison of measures of the Austrian RDP Estimated gross effects on Gross Value Added, nominal measure support payments investment costs mio mio mio gross value added gross effect, nominal benefit per of per of investment costs M121 modernisation of farms ,6 2,1 M311b diversification (non-energy) ,1 M312 small/medium enterprises ,3 M313 tourism ,8 Karl Ortner, BA für Agrarwirtschaft, Wien,

27 Comparison of measures of the Austrian RDP Estimated gross effects on Gross Value Added, nominal measure support payments investment costs mio mio mio gross value added gross effect, nominal benefit per of per of investment costs M121 modernisation of farms ,6 2,1 M311b diversification (non-energy) ,1 M312 small/medium enterprises ,3 M313 tourism ,8 Karl Ortner, BA für Agrarwirtschaft, Wien,

28 Comparison of measures of the Austrian RDP Estimated gross effects on Gross Value Added, nominal measure support payments investment costs mio mio mio gross value added gross effect, nominal benefit per of per of investment costs M121 modernisation of farms ,6 2,1 M311b diversification (non-energy) ,1 M312 small/medium enterprises ,3 M313 tourism ,8 Karl Ortner, BA für Agrarwirtschaft, Wien,

29 Comparison of measures of the Austrian RDP Estimated gross effects on Gross Value Added, nominal measure support payments investment costs mio mio mio gross value added gross effect, nominal per of per of investment support M121 modernisation of farms ,6 11,8 M311b diversification (non-energy) ,1 7,9 M312 small/medium enterprises ,3 44,2 M313 tourism ,8 1,2 Karl Ortner, BA für Agrarwirtschaft, Wien,

30 Conclusions: Effects Estimate (long-run) effects not changes over time interpret result indicators accordingly (effects are unobservable) Estimation of effects requires a theory (intervention logic, model) assumptions should be based on statistic (econometric) methods Use net effects to estimate efficiency Take account of deadweight, dislocation, substitution, multiplier (dynamic) effects consider sector (market) effects! Estimation must be replicable Use scientific methodology Karl Ortner, BA für Agrarwirtschaft, Wien,

31 Conclusions: Investment support M121 Modernisation of agricultural holdings - most important measure after agri-environmental payments and compensatory allowance - increases Gross Value Added but (almost) not employment - Benefit-Cost-Ratio = 2,1 Investments are (highly) profitable - Benefit-Support-Ratio = 4,1 Support is (highly) profitable - Benefit for whome? Public goods? Sector (market) effects: Boosts supply > depresses prices > benefit for consumers (globally) Karl Ortner, BA für Agrarwirtschaft, Wien,

32 Conclusions: Indicators Use appropriate indicators Measure progress in respect of targets Represent appropriate objectives of policies Government intervention should pursue the production/provision of public goods Gross Value Added measures the value of private goods Indicators in respect of public goods in the CMEF (4) Reversing biodiversity decline (5) Maintenance of high nature value farmland/forestry (6) Improvement in water quality (7) Contribution to combating climate change Consider indicators for other policy objectives Quality of life (labor, income distribution, learning ) Karl Ortner, BA für Agrarwirtschaft, Wien,

33 RD investment support in Austria Thank you for your attention Karl Ortner, BA für Agrarwirtschaft, Wien,

34 Wirkungsindikatoren des CMEF Private Güter (1) Änderung der Bruttowertschöpfung netto (2) Änderung der Beschäftigung netto (3) Änderung der Arbeitsproduktivität Öffentliche Güter (4) Umkehrung des Trends der Abnahme der Biodiversität (5) Erhaltung von land- und forstwirtschaftlichen Flächen mit hohem Naturwert (6) Verbesserung der Wasserqualität (7) Abschwächung des Klimawandels Lebensqualität Karl Ortner, BA für Agrarwirtschaft, Wien,

35 Änderungen auf dem Markt Bruttowertschöpfung = Preis * Menge variable Kosten Preis Angebot A 0 A 1 p 0 Nachfrage q 0 Menge

36 Änderungen auf dem Markt Bruttowertschöpfung = Preis * Menge variable Kosten Preis Angebot A 0 A 1 p 0 Nachfrage q 0 Menge

37 Änderungen auf dem Markt Preis Angebot A 0 A 1 p 0 p 1 Nachfrage q 0 q 1 Menge