Research in Economics

Explore the findings of academics in the Department of Economics, based within the Business School.

Our focus

Our department enjoys an international reputation for its predominantly applied research.

The department promotes an active research environment which fosters collaborative research within the University and externally, directly influencing and informing policy-making organisations throughout the world. See our Impact and Influence case studies and External Policy Work pages.

Our lively research environment is also built around the department's Working Paper Series, weekly departmental seminar, regular internal workshops, annual PhD conference and weekly PhD advanced economics reading groups.

Our academics are dedicated to producing world-leading work with a particular focus on six key subject areas, each with its own sub-fields of research and specialist knowledge to benefit students, researchers and practitioners.

Research subject areas

  • Environment and Energy

    We study the effect of resources on the economy, assess the value of environmental amenities, investigate the impacts of climate change, and evaluate and design architectures for international and national climate policies.

    Building on existing reputation and strength in energy and environment research at SPRU, Sussex has recruited world-class environment economists and young, promising energy and environment economists in recent years to meet demands from students, researchers and practitioners.

    Our research covers a range of topics. We:

    • study the effect of resources, such as oil and water, on economic growth, the structure of economy, the distribution of income, and international trade.
    • develop new methods and apply existing ones to assess the value of environmental amenities, including via impacts on individuals' subjective wellbeing.
    • investigate the impacts of climate change and greenhouse gas emission reduction, and evaluate and design architectures for international and national climate policies.

    Members

  • International Trade

    We have a long-standing tradition of research in international trade and trade policy, addressing important questions about the drivers and effects of international trade in goods and services, as well as the design and implications of trade policy, regional integration and the world trading system.

    Our ongoing research, encompassing extensive empirical work as well as contributions to theory, continues to inform trade policy and shed light on wider issues relating to poverty, development, migration, productivity, as well as the boundaries of the firm and engagement in value chains.

    Our research addresses questions such as:

    • how can developing economies effectively engage in international integration to stimulate growth?
    • how does globalisation affect services trade and what are the complementarities between goods and services trade?
    • how do electoral systems and the efforts of lobbies shape trade protection?
    • in the wake of the international trade collapse, what factors drive trade volatility and vulnerability of international trade?

    The group maintains external links with the Centre for Economic Policy Research (CEPR), the World Bank and the LSE's Centre for Economic Performance (CEP). It also maintains strong internal ties with IDS. Research in the Department has heavily influenced trade policy debates, for example, with regards to the EU’s scheme of trade preferences for developing countries and the role of the EU in value chains with China. It has also led to the development of the TradeSift software, which facilitates assessment of welfare changes associated with regional integration, and has been used to train more than 400 policy-makers world-wide.

    Collaborative work with the World Bank has contributed to the construction of the Services Policy Restrictions Database, which describes global patterns of barriers to services trade. Current research in the Department studies trade policy as a determinant of mergers and acquisitions in services, and examines how policies governing the liner shipping sector affects maritime transport costs and seaborne trade flows. Our ongoing research also studies aspects of trade, migration and poverty reduction, with the Migrating out of Poverty Research Programme Consortium based in Sussex (funded by DFID from 2010 to September 2019).

    Services trade and Brexit

    Economic Sovereignty? Who makes the rules?

    Research projects

    Our research projects, with a variety of collaborators, include:

    • interconnections between trade in goods and trade in services
    • trade and investment in services sectors
    • preferences, regional integration and WTO
    • vertical specialisation and effects of competition from emerging markets
    • trade and firm level productivity, and engagement in value chains
    • trade and industrial organisation
    • the political economy of protection
    • trade and migration e.g. modelling multiple-migrant households, long-term consequences of internal migration in Indonesia in response the Asian crisis
    • the effects of privatisation on productivity growth
    • trade liberalisation, development and poverty-alleviation
    • trade liberalisation and vulnerability
    • trade and natural resources (energy, water).

    The group also supervises a number of PhD students whose research includes employment effects of trade liberalisation in India, firm-level engagement in exporting and innovation in the face of crisis, the effects of trade liberalisation in Peru, trade and inequality, and the political economy of protection in India.

    Members

  • Poverty and Development

    We conduct research into all aspects of poverty, inequality and economic development in both developing and developed countries.

    Sussex enjoys a worldwide reputation for its work on the analysis of poverty, inequality and economic development.

    Research in this field has been an integral part of our department since the establishment of the University of Sussex.

    Michael Lipton, a pioneer of development studies at Sussex, set up the Poverty Research Unit in 1995 (now the Centre for Poverty and Inequality Research).

    The main areas of our research are:

    • trade and development
    • agriculture and rural development
    • the measurement of poverty and inequality
    • the role of redistribution in poverty reduction
    • climate, climate change, climate policy and economic development
    • demography, land distribution and development in Sub Saharan Africa
    • nutrition, health, poverty, institutions and economic development under colonial rule in Africa
    • causes of the rise of living standards of the poor in 20th century Europe with a focus on UK in the areas of water, sanitation, infant mortality and fertility and nutrition distributions.

    We are also undertaking ongoing research on the impacts of migration on economic development:

    • assessing the social and economic impacts of migration on the migrants and their sending communities, especially the effects of remittances
    • labour mobility across borders and its impacts on labour market in the receiving countries
    • labour markets segregation on racial and religious lines
    • relations between trade, FDI and migration.

    Members

  • Labour, Education and Health

    Our research looks at issues in both developed and developing countries such as wage levels and distribution, NHS reforms, the impact of malaria control on infant mortality, labour supply and markets, school performance assessments, and the evaluation of policies aimed at boosting maternal and child health.

    The main research areas include:

    • minimum wage effects
    • wage distribution, rigidity and settlement
    • spatial structure of wage
    • inequality and poverty in the UK
    • labour supply and working hours restriction
    • impact of gender, ethnicity and informal sector activities on labour market in developing countries
    • rate of return to education
    • school performance and teachers pay
    • performance evaluation
    • pupil mobility, school segregation and peer effects
    • schooling and education in emerging and developing countries
    • teachers' contracts in India.

    The vigorous and robust research work by Sussex economists on minimum wage has been adopted by the Low Pay Commission recommendation to UK government; the work on higher education has been cited as part of written evidence to the Parliament Select Committees, highlighted in the UK Department for Employment and Learning ‘Research Review’, quoted by the Russell Group and Sutton Trust Report and by many national newspapers such as The Daily Telegraph and The Guardian.

    Ofsted ratings influence house prices

    Minimum wages help raise the pay of low wage workers

    The economics of education

    Members

  • Economic Theory, Behaviour and Experiments

    We combine tools and techniques from microeconomic theory, game theory, behavioural economics and experimental economics to address more fundamental questions about the behaviour of economic agents, and how such behaviour should be modelled by economists.

    Current areas of expertise include bargaining and negotiations, repeated games, and behavioural decision theory – that is, developing formal models of the behaviour of agents who fail the classic assumptions of full rationality, for example because of attention failures, mis-perception of time or reliance on possibly suboptimal rules of thumb.

    Many of our researchers are involved in empirically evaluating and informing theory using a broad spectrum of approaches, with both experimental and observational data.

    We have also developed interdisciplinary links, in particular with researchers from Psychology as well as other disciplines within the Business School.

    When rationality doesn’t prevail

    Current and recently completed research projects, with a variety of collaborators, include:

    • Stochastic Choice and Consideration Sets
    • Inferring Cognitive Heterogeneity from Aggregate Choices
    • Stochastic Complementarity
    • Competing for Attention: Is the Showiest also the Best?
    • Bargaining: how commitment claims are used as a tactic in negotiations
    • Cooperation in the finitely repeated prisoner's dilemma
    • Repeated interactions and Cooperation: Efficiency versus Renegotiation Concerns
    • Welfare, time preferences and social preferences
    • Public attitudes towards public policy
    • Can rationality be taught? Experimental evidence from India
    • Intra-household decision-making in extended families in India
    • Mappiness: How is happiness affected by the local environment?
    • Discrimination in the housing rental market in urban India
    • Incentives and group identity.

    Fever pitch: Are footbal fans irrational?

    Members

External Policy Work

Our faculty are driven by a desire to address critical global issues in economics in a way that will improve people’s lives – often the lives of the poorest. In order to effect change,  members of faculty work with external organisations, providing expert knowledge and rigorous analysis to help inform policy development and implementation. Here are a few examples of how research directly informs policy and practice.

  • Informing the National Minimum Wage


    Professor Richard Dickens, Professor of Economics, is a leading academic on labour markets and the minimum wage.

    His research has directly informed the recommendations of the Low Pay Commission, on the rate at which the National Minimum Wage is set; on the associated regulations; and on the Commission’s evaluation of the economic impact of the National Minimum Wage.

    In particular, in 2010, as a result of research conducted by Prof Dickens and others, the age of eligibility for the National Minimum Wage was lowered from 22 to 21 years, leading to 55,000 young British workers benefiting directly from a 20 per cent increase in wages.

    See more: Improving the labour market experience for low-paid workers in Britain

    In 2014 Prof Dickens was appointed as an independent member of the UK’s Low Pay Commission for a three-year term.

    The Low Pay Commission makes recommendations to the Government on the level at which to set the National Minimum Wage.

    As a commissioner, Professor Dickens is involved in:

    • Monitoring, evaluating and reviewing the impact of the National Minimum Wage on pay,
    • Employment and competitiveness in low paying sectors and small firms; the effect on different groups of workers,
    • The effect on pay structures,
    • The interaction between the National Minimum Wage and the tax and benefit systems.  

    The Commission reports to the Prime Minister, Deputy Prime Minister and the Secretary of State, and consists of a Chair and eight other members. Three of the Commissioners have an employee/trade union background, 3 have an employer background and 3 are independent/academic labour relations specialists.

    In July 2015, Professor Dickens provided information on the UK’s experience in addressing wage inequality, as well as the modalities of introducing a national minimum wage at a conference organized by the government of South Africa, which is exploring whether to introduce a minimum wage so as to address the triple challenges of unemployment, inequality and poverty. 

  • Advising Ofsted on their inspection methodology

    Dr Iftikhar Hussain, is one of very few economists to study the impact of Ofsted.

    His research, involving applying econometric techniques to understand cause and effect within the education system, has provided some of the first hard empirical evidence on how Ofsted shapes behaviour and affects the education market.

    In October 2015, Dr Hussain became a member of a new expert panel advising Ofsted on their inspection methodology. Ofsted had recently introduced a change to the way they inspect maintained schools, academies and further education and skills providers. Schools and providers that were judged good at their most recent inspection will now receive a short inspection approximately every three years instead of a full inspection approximately every five or six years.

    The expert panel was established to help understand which elements of the new approach drive consistency and reliability, in order to improve their inspection practice and ensure the reliability of their assessments. 

    In three separate studies Dr Hussain has documented how school performance responds to the punitive elements of the regime, as well as investigating the impact of disclosure of Ofsted inspection ratings on parents' school choice decisions as well as on house prices.

    As a member of the panel, he will help to scrutinize and inform the choice of methodology to test the new short inspection approach, and analyse the findings of the tests as they take place. 

    Further reading

    Hussain, Iftikar (2015) Subjective performance evaluation in the public sector: evidence from school inspections. Journal of Human Resources, 50 (1). pp. 189-221. ISSN 0022-166X

    The School Inspector Calls, Education Next, Summer 2013.

  • Enabling industry to navigate trade policy changes as a result of Brexit

    The UK Trade Policy Observatory (UKTPO), in collaboration with EURIS, one of the largest trade associations in the UK, has enabled a large number of high-value manufacturers to commence informed engagement with trade policy to try to ensure that they get the best deal from Brexit. The collaboration has informed firms, enabling them to lobby government for trade agreements that have the most positive/least negative impact on income and jobs in the post-Brexit era.

    Led by Professor L. Alan Winters, the UKTPO, a partnership between the University of Sussex and Chatham House, draws together the largest group of academic expertise on the world trading system, with specialists in economics, law, international relations, business and management. EURIS is a trade association of sophisticated manufacturers with a turnover of around £100 billion. EURIS represents sectors with a turnover of over £148 billion and with 1.1 million employees comprising 13 trade associations. EURIS covers sectors responsible for over 25% of total UK goods imports and exports.

    In 2018, EURIS approached the UKTPO for advice about identifying, quantifying and responding to the likely impacts of the changing trade and regulatory relationship between the UK and EU. Brexit will potentially induce a huge change in the conditions under which all companies operating in the UK do business, and EURIS was keen to interact with the Government on these policy areas to minimise the risks and maximise the opportunities for its members.

    The UKTPO worked with EURIS to provide EURIS member companies with unique insights into different Brexit scenarios and to equip them to advise the Government on trade negotiations with the EU and others. In particular, UKTPO formulated and executed a major survey of EURIS members in order to understand and communicate the major issues they faced with Brexit – see below.  The project also involved research and analysis of various key issues surrounding UK/EU trade, including Rules of Origin (ROOs), customs procedures, regulations and mutual recognition agreements. 

    Achieving impact

    In July 2018, the collaboration led to 150 industry leaders writing to the Prime Minister to express concern over a ‘no deal’ Brexit scenario. The signatories stated that such an outcome would cause severe disruption and lead to severe economic damage to the UK. The letter called on the Government to secure a trade deal with the EU and avoid a ‘no deal’ scenario.

    In September 2018, the collaboration produced a report – Securing a competitive UK manufacturing industry post Brexit - on the impact of a no-deal Brexit on the industrial product supply sector, stemming from a survey designed and analysed by UKTPO. The survey revealed that four out of five manufacturers in industrial product supply sector want continued regulatory alignment with the EU. The report also found that four in ten companies would face a skills shortage without EU workers, while 1/3 had already seen a fall in investment due to Brexit. The report was launched in London and has been reported in the Independent. EURIS continues to publicly lobby the Government against a no-deal Brexit as this would put at risk the industry product supply industry's £148bn contribution to the UK economy.

    Future impact

    It is early stages to fully quantify the immediate or long-term impact of the overall collaboration with EURIS, but the aim is to strategically support EURIS member companies in preparation for different Brexit scenarios, with outputs informing and guiding particular UK policy decisions around Brexit. This will facilitate an industry negotiating position that is significantly better informed as to how various aspects of Brexit may impact upon it. Industry will be equipped with an evidence base and a hierarchy of needs to enable it to engage effectively with the government to inform and improve UK negotiating positions. This is true whether the approach that the government finally chooses is via the Withdrawal Agreement and subsequent negotiations based on the political declaration or a ‘no deal’ Brexit in which UK industry will still push hard for agreements with the EU and other trading partners.  

    Funding

    This research was supported by EURIS and the ESRC IAA Social Science Impact Fund.

  • Reviewing police pay

    Professor Disney has directly influenced several public sector pay reviews, helping staff in the NHS and police obtain a fair wage.

    In mid 2015, the UK government announced that the system used to decide how much money police forces receive would be replaced. The aim is to change the current method, the police allocation formula – which is nearly 10 years old, with a simplified version that will take into account factors such as the size of an area’s population. 

    consultation process was launched involving Police and Crime Commissioners and Chief Constables among others, followed by a peer review to which the Home Office appointed Professor Richard Disney as Reviewer. Professor Disney was one of two academics appointed as reviewers. The reviewers were tasked with assessing the performance of the existing method of allocating police funding and the methodology used in the revision of the formula. 

    In November 2015, the review process was paused for a year after it was suggested that Home Office officials had made errors in computing the funding allocations for police force areas based on the new formula. Nevertheless, it is likely that the new formula will be implemented in due course.

    In the UK, pay negotiations in the public sector are largely undertaken by pay review bodies.  These bodies, which are staffed by individuals from outside government recruited through a competitive process, cover over 2.5 million public servants, including the armed services, NHS staff, doctors and dentists and, since 2014, the police. After considering evidence from the relevant parties, the Review Body makes independent recommendations on pay. It is generally expected that the Government will implement the recommendations and thereby avoid industrial action by the public servants. Professor Disney sat on the NHS Pay Review Body 2005-10 and on the Senior Salaries Pay Review Body 2011-14.

    Professor Disney was also previously one of two external advisors to Sir Thomas Winsor's Review of Pay and Conditions for the Police Service in England and Wales, which reported in 2011 and 2012. In fact, the establishment of the police pay review body was a direct consequence of the recommendations of this Review.

    The second report made a large number of recommendations directly to the Home Secretary, almost all of which were initially accepted by the Home Secretary and ultimately achieved by the arbitration process.  This was the first major reform of police service pay and conditions for over thirty years or more.

    Further reading

    Rowena Crawford and Richard Disney (2014) The Reform of police pensions in England and Wales, Journal of Public Economics Vol 116.

    Rowena Crawford and Richard Disney (2015) Wage regulation and the quality of police officer recruits, Institute for Fiscal Studies Working Paper W15/19, London.

    Rowena Crawford, Richard Disney and David Innes (2015) Funding the English and Welsh police service: from boom to bust? Institute for Fiscal Studies Briefing Note BN179, London.

Working Paper Series

See recent research output by the members of our department as well as colleagues outside the University.

Explore the Working Paper Series.

Latest publications

These are the five most recent publications added to Sussex Research Online (SRO).

See the full list for the current calendar year.


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