What do British business leaders think about the EU?

The other day I came across a fascinating YouGov poll examining British business leaders' attitudes toward the EU. The poll, which was conducted on behalf of Business for Britain, sampled 1,024 business leaders in September of 2013. It achieved good representativeness with respect to region, and moderate representativeness with respect to firm size (large businesses were over-represented), industry (services were over-represented, construction under-represented) and exporting status (exporting businesses were over-represented). For further details on methodology, see pp. 6-7 in the report.

The first major finding of the poll was that a sizeable majority of business leaders support holding a referendum over EU membership within the next few years: 66% were in favour of doing so, 26% were opposed, and 9% were unsure. This majority obtained for small, medium and large businesses, and for both exporting and non-exporting businesses.

The second major finding was that a plurality of business leaders would prefer renegotiating the terms of Britain's membership to leaving the EU altogether. When asked how they would vote in a referendum over EU membership: 49% said they would vote to stay in, 39% said they would vote to leave, and 11% said they were unsure.

The third major finding was that a plurality of business leaders think the costs of EU regulation outweigh the benefits of being in the EU: 46% said the costs outweigh the benefits, 37% said the benefits outweigh the costs, 8% said neither, and 10% said they were unsure.

Interestingly, as the chart above indicates, small business leaders were more likely than large business leaders to think the costs of EU regulation outweigh the benefits of being in the EU. There are a number of possible explanations for this. First, small businesses may be less likely to export to the EU than large businesses. Second, EU regulations may be more burdensome for small businesses than large businesses. Third, small business leaders may be more opposed to the EU for reasons unrelated to regulation, such as being against European integration.

From the perspective of the country as a whole, who is more likely to be right on this particular issue: small business leaders or large business leaders? There is at least one important reason to think it is the small business leaders, namely that small businesses generally can't use government to benefit themselves the way that big businesses can. As Milton Friedman explained,   

You know it's an interesting thing if I look at the behaviour of business organisations. If I look at the NAM or the Chamber of Commerce, on any given issue they're as likely to be on the wrong side as on the right side. The only organisation that is almost always on the right side is the National Federation of Independent Business. Why? Because it represents small business. Why? Not because small businessmen are nobler than big businessmen. But because they know they can't get anywhere through government, while the big businessmen can. 

Richer countries are more concerned about inequality

Further to my last couple of posts, here I examine the relationship between the percentage who believe inequality is the top global threat and a country's position in the global distribution of GDP per capita. The global distribution of GDP per capita is displayed below; data are for 2012, taken from the World Bank (figures were not available for Palestine or Argentina). Note that the chart displays the distribution of states (loosely defined), rather than countries. For example, the World Bank reports separate values for Hong Kong, Macau and China. The median state is Tunisia, with a GDP per capita of $10,800. Western Europe encompasses the 78th (Portugal) to 99th (Luxembourg) percentiles.

The second chart (below) plots the percentage who believe inequality is the top global threat against percentile in the global distribution of GDP per capita. Interestingly, the correlation is moderate and positive, namely r = .48 (p = 0.001, n = 42). Citizens living in richer countries are more likely to believe that inequality is the top global threat. Since about 2/3rds of global income inequality is between countries, this suggests that rich countries might be able to assuage their citizens' concerns by taking measures to reduce their own incomes. They could increase foreign aid to poor countries, or simply destroy productive assets. 

One possible explanation for why citizens of poorer countries are apparently less likely to believe inequality is the top global threat is that they have access to less information, or to information of lower quality, than their counterparts living in richer countries. In other words, if they had better information, perhaps they would be less concerned about AIDS, and more concerned about inequality.

Concern about AIDS versus the prevalence of AIDS

Last week I posted on the blog OpenPop about the relationship between measured inequality and citizens' concern about inequality. That post built upon an earlier post where I had examined the relationship among OECD countries. One measure of concern about inequality that I used in the OpenPop post was the percentage of respondents who view inequality as the top global threat. This measure was taken from a recent Pew survey where respondents in 44 countries were asked, "Which one of these poses the greatest threat to the world? Nuclear weapons; Inequality; Religious & ethnic hatred; Pollution & environment; AIDS & other diseases."

I found that measured inequality is weakly but negatively associated with the percentage who believe inequality is the top global threat. As I noted, this probably probably arises because countries with high inequality often face other problems, which citizens may consider more pressing. One such problem is AIDS. To examine whether citizens' concern about AIDS & other diseases is correlated with the measured prevalence of AIDS, I obtained data on the latter from the CIA World Factbook (figures were not available for Palestine or Brazil). Because the distribution was highly skewed, I applied the log transformation. The chart below plots the relationship between the percentage who believe AIDS & other diseases are the top global threat and log prevalence of HIV/AIDS.  

The correlation is strong and positive, namely r = .70 (p < 0.001, n = 42). In most Western countries, where the prevalence of HIV/AIDS is low, less than 10% of respondents believe AIDS & other diseases are the top global threat. By contrast, in four of the Sub-Saharan African countries, where the prevalence of HIV/AIDS is substantially higher, more than 25% of respondents believe AIDS & other diseases are the top global threat. Nigeria is something of an outlier: despite a relatively high prevalence of HIV/AIDS, few respondents believe AIDS & other diseases are the top global threat. This is attributable to the fact that many Nigerian respondents (38%) view religious & ethnic hatred as the top global threat, most likely due to the ongoing Islamist insurgency there.

More evidence of a gender difference in attitudes to offensive speech

YouGov have just done another poll on attitudes to offensive speech, this time in the US. As before, the poll unearthed a fairly strong gender difference. Looking at the chart below, women are uniformly less tolerant of offensive speech than men (14-25 percentage points). Incidentally, part of the difference may be due to a tendency for women to give more socially desirable responses. Yet it is not clear that approval of censoring offensive speech is actually more socially desirable. Without adjusting for social desirability bias, 41-65 percent of the population (depending on the measure) seems to be against censorship, and the percentages are even higher in the upper-income group.

The gender difference in attitudes to offensive speech

The good people at YouGov have just done a poll on attitudes to the Charlie Hebdo cartoons. Their main findings were twofold. First, a sizeable majority of the British public (69%) believe that it was acceptable for Charlie Hebdo to publish cartoons depicting the prophet Muhammad. And second, a slightly smaller majority of the British public (63%) believe that newspapers should now reprint the Charlie Hebdo cartoons. 

More interesting than the headline results, however, is the gender difference that the poll unearthed. Previously I have noted that, in the UK, women are much more likely to believe that offensive jokes are unacceptable. Women seem to be less tolerant of offensive speech in the US too. The chart below plots the percentages of male and female respondents (along with 95% confidence intervals, based on unweighted n's) who agreed with each of four statements pertaining to free speech. In all four cases, the male percentage is substantially higher (19-20 percentage points). 

The Economist gets it wrong on South Korean fertility

In an otherwise informative report on South Korea's ageing population, Stephanie Studer of The Economist claims that "South Korea's fertility rate is now the lowest in the developed world at less than 1.3 children per woman". Yet the CIA World Factbook lists at least two developed countries with TFRs lower than South Korea: Taiwan at 1.11, and Singapore at 0.80. This marks the second error pertaining to international comparisons that I've spotted in The Economist. 

Budget deficits and growth in Europe

There is a lively, ongoing debate in the blogosphere over the relationship between fiscal austerity and economic performance. Jeff Sachs recently penned an article criticising Paul Krugman's predictions as to the impact of austerity on US economic performance, to which Krugman responded on his blog. In the first of his responses, Krugman presents a chart showing that change in government purchases is strongly associated with GDP growth across country-years for European countries between 2010 and 2013. 

To Krugman's credit, he acknowledges the limitations of his analysis, writing, "You can, if you like, argue that it’s a spurious correlation for some reason." Indeed, it is not clear how valid change in government purchases is as a measure of fiscal austerity. The Financial Times Lexicon defines 'austerity' as follows:

Austerity measures refer to official actions taken by the government, during a period of adverse economic conditions, to reduce its budget deficit using a combination of spending cuts or tax rises.

This means that a year in which government purchases go up is not necessarily one of fiscal austerity: if I understand correctly (please tell me if I don't), it is possible for a government to increases purchases whilst simultaneously reducing the budget deficit; e.g., by cutting transfer payments or raising consumption taxes.

An alternative way to examine austerity's impact on economic performance is to simply plot GDP growth between 2010 and 2013 against the average budget deficit over this time period. Using Eurostat (as Krugman does) for budget deficit data, and the World Bank for GDP data, one obtains the scatterplot shown below. The relationship is moderate and positive: r = .44 (p = 0.019). While Greece and Ireland are obvious outliers, their effects on the correlation more-or-less cancel out; after removing them, r = .41 (p = 0.038). 

This analysis is of course also problematic. Most importantly, the denominator of the budget deficit (namely GDP) will tend to be smaller in countries experiencing slower growth, meaning that the deficit itself will be larger. Or in other words, countries that happen to be growing faster can better afford to reduce their budget deficits. Overall, methods more complex than simple scatterplots are needed to rigorously evaluate the impact of fiscal austerity on economic performance.