Impact Makers

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Social impact economics

Dr Alfredo Paloyo
School of Accounting, Economics, and Finance

Evidence-based policy for education and health care systems

From school classrooms to health care systems, Dr Alfredo Paloyo’s research has shown how microeconomics can add a new dimension to social issues and in the evaluation of the impact of policy decisions.

Using statistical tools to interrogate observational data, Dr Paloyo seeks to understand what factors drive better outcomes in education and health. His research moves beyond simple trends and patterns to identify the root cause of observed effects and from this, predict behaviour.

“Economists bring with us a very good understanding of how people behave in response to incentives,” he says. Through this lens, Dr Paloyo has studied human capital – the way that people choose to invest in education and health care.

To date, Dr Paloyo’s research has delivered new methods to expedite analyses of national health care provision in developing countries – work which was featured by the World Bank – and he has examined the effect that classmates have on a student’s academic performance.

“When we look at these issues from an economics perspective with the tools that we have, we are able to draw conclusions that have direct policy implications,” Dr Paloyo says.

His latest work on peer effects has challenged the strong emphasis in education on grouping high school children by ability. He found that putting high-achieving students together has little effect on their performance and that this strategy is detrimental to children who are already performing poorly.

In this way, Dr Paloyo identifies opportunities where policy can intervene for greater impact and his research provides policymakers with evidence on how best to devote resources. “The fundamental lesson of economics is that resources are scarce. The policymaker is looking for ways in which policy will give the biggest benefit and that’s where economists can contribute. That’s where we will have the biggest social impact.”

Dr Paloyo’s research has been met with widespread interest and his expertise has been called upon by the University of Paderborn and Ruhr University Bochum in Germany, the University of the Philippines and De La Salle University, Philippines, where he has delivered intensive courses in applied microeconometrics for students. His work has also supported UOW’s Peer Assisted Study Sessions program.

Beyond this, Dr Paloyo believes in translating research outcomes to the wider community so that they too may contribute to policy discussions. He has done so via The Conversation and in partnership with the Australian Research Council Centre of Excellence for Children and Families over the Life Course at the University of Sydney, organising a public workshop on the social science of obesity.

Dr Paloyo is set to continue his research into the transmission of obesity from parents to their children.

“The default is that obesity is an epidemiological issue, a health issue, but obesity is a multifaceted problem. As microeconomists, we want to be able to contribute to that conversation.”

Looking forward, his goal is to establish stronger links between the academic community and policymakers so that government agencies take research findings to form evidence-based policies, which ultimately translate to better social wellbeing.