Exit, Voice, and Loyalty in Urban Politics

1. Exit, Voice, and Loyalty in Urban Politics Peter John (University of Manchester)

2. Policy background • Choice a key objective of government policy - assumed to deliver benefits to the consumer • Choice and voice assumed to be complementary – see Social Market Foundation, Choice: The Evidence (2004) • No tests of this statement

3. Hirschmann • Exit, Voice and Loyalty (1970) • Studied nationalised industries in Africa – found that competition led to loss of efficiency – a puzzle • Argued that consumers who are locked in agitate to keep services efficient. No incentive to voice under competition when other opportunities available

4. Hirschmann (continued) • Posited a negative trade-off between exit and voice • Mediated by loyalty – a less clear part of the Hirschman model • Can apply to a variety of settings: schools, employment quits (unions), consumers (see Dowding et al review article: EJPR, 2000)

5. Modifications • Voice is too simple – there are different types of voice, collective (eg voting, group membership) and individual (e.g. complaining) • Collective voice is harder to organise because of CA (PD problems) • So hypothesis is that individual voice does not trade-off with exit, collective voice does – exit and two voice

6. Modifications continued • Exit takes different forms to: • Moving providers within jurisdiction • Moving jurisdiction • Exit to private services So three exit, two voice model Also voice can be divided into voting and more active categories, so three voice, three exit!

7. Thinking about loyalty • Loyalty not well defined in Hirchmann • Better to see it as social investment which increases voice and reduces exit • Can be conceptualised as social capital • Neighbourhood attachment • Trust • Group membership

8. Satisfaction • Need to think about as a separate variable • Also can mediate exit-voice tradeoff • Something that providers can affect at the aggregate level

9. Hypotheses • H1: Intentions to exit will decrease collective voice activity. • H2: Intentions to exit will decrease individual voice, but less than collective voice • H3 – Social investment increases collective and individual voice • H4: Lack of exit availability will increase collective voice more than individual voice • H5: Dissatisfaction will increase voice first, then exit • H6: Satisfaction will increase after exit • H7: Satisfaction will increase after voice has been successfully responded to

10. The study • Internet Survey – YouGov • Sampled 9500 which yielded 4067 responses, a response rate of 42.1 per cent. • In wave 2 we got a response of 2,619, 64.5 per cent of wave two. • In wave three we surveyed those who responded in wave two and supplemented the panel to yield 4952 responses which includes 1744 of those from wave 2. • In wave four we surveyed all the previous waves producing 3468 responses (1690 from waves 1; 1486 from wave 2; and 2941 from wave 3). • There were 1138 respondents who answered all waves. • On-line questionnaire

11. Dynamic aspects of the study • What does an event in one period do in the next period? • Key event is exit to the private sector - does exit increases satisfaction • First we look at change in satisfaction from wave 1 to 2, which is a difference in confidence that an injury will be treated • The see if there is correlation with exit in wave , which there is: -.05 (p=.08)

12. Impact of satisfaction on exit over four years of the panel Time expecting treat 0.0984***(-0.022) Household income 3.34e-05*** -1.66E-06 Year -0.104*** -0.0199 Sex -0.155** -0.0631 Constant -2.630*** -0.146 Observations 11799 Number of id 5929

13. Conclusions • Many expected relationships between satisfaction and voice, and between satisfaction and exit • There is a link between lock in and voice • Trade-off between exit and voice for intentions to move, but less for other forms of exit • Policy implications – costs of exit needs to be factored in to policy choices