‘Clients need us to assess the economic effects of a policy or legislative change.’
In this Q&A, Oxera economic experts discuss the success stories and key issues our clients face in impact assessments.
What are the key impact assessment issues our clients face?
David Jevons When people are debating a law or policy, economics calculates its impact on firms, consumers, suppliers and the government. We can answer questions from decision-makers, boards, policymakers and politicians. Like who benefits and who loses? Will it put a firm out of business or bring new opportunities? What will the new world look like?
Dr Leonardo Mautino Many firms and industries want to show their value to society by examining how they interact with and affect the wider economy. We can help them understand and quantify how their industry supports and benefits the wider economy.
Reinder Van Dijk When governments intervene in markets, they usually do so with good intentions. But sometimes there are unforeseen consequences. Changes they make to laws and policies can be good for firms—but there needs to be a robust evidence base before changes are adopted. That’s where we come in.
LM Changes to laws and policies can also remove whole industries overnight and divert billions in revenue and investment. That’s why it’s vital that the government and industries affected by changes really understand what’s happening.
Who are our main clients and how do we help them?
DJ Partners or directors at PR firms who assist clients on regulatory and policy issues need us to help them identify the economic links, quantify them and communicate that effectively and clearly to stakeholders. We work with other clients like management consultancies who, for example, win five case studies and need an economic case.
LM Our corporate clients are usually strategy, regulation or marketing directors. They often have very specific requirements. We work with a range of stakeholders in the firm to get the right result for the client.
RVD We also work with regulators and government departments to help them test the effectiveness of changes in law and policy and understand both their total and distributional impact. We examine policies both before and after they’re implemented.
LM We can establish the counterfactual, prove the link between cause and effect, and identify unexpected consequences of a change. We also offer a clear understanding of the structure of the market to avoid identifying spurious relationships.
What are their most pressing needs?
DJ There are two main reasons we get called. First, to assess the impact of an investment, law, policy or regulation. Second, to help explain the economic and strategic importance of a firm or sector to the wider economy. Clients need us to assess the economic effects of a policy or legislative change. Before it happens we can predict the likely effects, and afterwards we can assess its effectiveness. We evaluate this against what would have happened otherwise.
RVD We help clients articulate the size of their contribution to the economy, their economic impact and wider economic benefits, like the positive or negative effect their existence has on others.
DJ Our clients need a full quantification of the impacts of change with figures they can be confident in. We help to communicate the implications clearly and accessibly to other market players, stakeholders and the public.
LM Any analysis needs to stand up to scrutiny and have traction with other stakeholders, including the government, customers and market participants. The decision-maker must find the study credible.
What are the main benefits we provide to our clients?
RVD We give our clients a robust quantification of what impact changes are likely to have. Plus what’s likely to happen otherwise. Often this involves looking at the effects on different players in the market and different socio-demographic groups.
DJ Legal and policy changes often have distributional impacts within our society. Our analysis identifies those who will benefit and those who will lose out from a change.
RVD We give our clients a clear, powerful report that influences decision-makers and gives them the confidence to make the right decision.
LM In a world where organisations are accountable for their decisions, they have to demonstrate their value for money. If they can’t, someone else will take advantage. That’s why being able to robustly quantify the impact of changes is so important.