The Impact of Scoring Weights on Price and Quality Outcomes: An Application to the Procurement of Welfare-to-Work Services

P.W.C. Koning, A. van de Meerendonk

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper assesses the effects of changes in scoring weights in auctions, using a unique sample of bids from private Welfare-to-Work (WTW) service providers to reintegrate groups of unemployed and disabled workers. These providers received points for their price bids and for three proxies of the ex-ante quality of their services: their reputation, a description of the intended plans ('methodology') to reintegrate workers, and the number of job placements they expected to achieve. We exploit the fact that the scoring weights of these award criteria changed in the time period under consideration, while the classification of worker types remained similar. Our estimation results show that increases in the scoring weights of the quality components (vis-à-vis the price weight) result in higher price bids. We also find that a higher weight for both the reputation component and the methodology component contributes to the job-placement of workers.
LanguageEnglish
Pages1-14
JournalEuropean Economic Review
Volume71
Issue numberOctober
DOIs
Publication statusPublished - 2014

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Scoring
Welfare to work
Procurement
Workers
Bid
Placement
Methodology
Service provider
Quality of service
Auctions

Cite this

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abstract = "This paper assesses the effects of changes in scoring weights in auctions, using a unique sample of bids from private Welfare-to-Work (WTW) service providers to reintegrate groups of unemployed and disabled workers. These providers received points for their price bids and for three proxies of the ex-ante quality of their services: their reputation, a description of the intended plans ('methodology') to reintegrate workers, and the number of job placements they expected to achieve. We exploit the fact that the scoring weights of these award criteria changed in the time period under consideration, while the classification of worker types remained similar. Our estimation results show that increases in the scoring weights of the quality components (vis-{\`a}-vis the price weight) result in higher price bids. We also find that a higher weight for both the reputation component and the methodology component contributes to the job-placement of workers.",
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The Impact of Scoring Weights on Price and Quality Outcomes: An Application to the Procurement of Welfare-to-Work Services. / Koning, P.W.C.; van de Meerendonk, A.

In: European Economic Review, Vol. 71, No. October, 2014, p. 1-14.

Research output: Contribution to JournalArticleAcademicpeer-review

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