Notaries: public officers or private professionals? Evidence from a randomized experiment

Last registered on March 14, 2019

Pre-Trial

Trial Information

General Information

Title
Notaries: public officers or private professionals? Evidence from a randomized experiment
RCT ID
AEARCTR-0002432
Initial registration date
November 03, 2017
Last updated
March 14, 2019, 3:23 AM EDT

Locations

Region

Primary Investigator

Affiliation
Istituto Bruno Leoni

Other Primary Investigator(s)

PI Affiliation
Istituto Bruno Leoni

Additional Trial Information

Status
Completed
Start date
2016-02-15
End date
2016-03-04
Secondary IDs
Abstract
The cost of starting a business in Italy is relatively high as compared with other EU member states. One reason is the cost of notarization, which is mandatory under the Italian law. In order to reduce this cost, in 2012 a new type of limited liability company was created—the simplified limited liability company—for which notarization should be provided free-of-charge. In this paper we explore the reasons behind the
requirement of notarization and review the evidence from a few cases where notarization was made optional. Subsequently, we describe the results of an ad hoc experiment in order to evaluate the design of the policy. We performed a randomized control trial involving almost 350 notaries in Rome, Italy. We find that the majority of the notaries in our sample do not fulfill the obligation by asking a greater-than-zero fee, therefore suggesting the policy is not fully effective. We conclude that obliging notaries to perform specific tasks below-costs (or even free-of-charge) may not be an effective policy, leading to suboptimal results.
External Link(s)

Registration Citation

Citation
Lavecchia, Luciano and Carlo Stagnaro. 2019. "Notaries: public officers or private professionals? Evidence from a randomized experiment." AEA RCT Registry. March 14. https://doi.org/10.1257/rct.2432-2.0
Former Citation
Lavecchia, Luciano, Luciano Lavecchia and Carlo Stagnaro. 2019. "Notaries: public officers or private professionals? Evidence from a randomized experiment." AEA RCT Registry. March 14. https://www.socialscienceregistry.org/trials/2432/history/43334
Experimental Details

Interventions

Intervention(s)
Between February 24th and 25th, 2016, we sent 349 emails from two different accounts, presenting ourselves as two graduates willing to incorporate a start up, an approach that is part of a growing stream of literature (Costa 2017, Giulietti et al. 2017, Gottschalk et al. 2017). These emails were identical (same names, same text) but for one, crucial, detail: notaries in the treatment group were asked for the incorporation of a simplified ltd (i.e. free-of-charge type), while those in the control group for a standard ltd (i.e. the more expensive type). We asked for a meeting and an estimate of the incorporation costs. We received 106 answers, the last on March, 4th 2016, with an average response rate of 30 percent, a number in line with similar surveys. Identification is achieved by means of the simple randomization. Given the specific setting (binary dependent variable) we estimated the average treatment effect with a logistic regression.
Intervention Start Date
2016-02-24
Intervention End Date
2016-03-04

Primary Outcomes

Primary Outcomes (end points)
rates of response in the two groups; average final prices; markups;
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We designed an experiment to check the effectiveness of the obligation of executing the deed free-of-charge.

In early February 2016, we collected the list of all the notaries with an office in Rome (404 out of a total of 4,900 in the whole country). Of them, 349 (7.1% of the national total) had a publicly available email address. We ordered their names by alphabetical order, assigning the odd surnames to the treatment group and the even ones to the control group. We checked for any difference between the two groups across all the variables we were able to collect (age, sex, start date, years of activity). No significant difference among the two groups was found, supporting the reliability of the randomization process.
Experimental Design Details
Randomization Method
We ordered their names by alphabetical order, assigning the odd surnames to the treatment group and the even ones to the control group.
Randomization Unit
individual level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
349
Sample size: planned number of observations
349
Sample size (or number of clusters) by treatment arms
349
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
March 04, 2016, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
March 04, 2016, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
349
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
349
Final Sample Size (or Number of Clusters) by Treatment Arms
179 control (email with standard ltd request) , 170 treatment (email with simple ltd request)
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
The cost of starting a business in Italy is relatively high as compared with other EU member states. One reason is the cost of notarization, which is mandatory under the Italian law. In order to reduce this cost, in 2012 a new type of limited liability company was created—the simplified limited liability company—for which notarization should be provided free-of-charge. In this paper we explore the reasons behind the
requirement of notarization and review the evidence from a few cases where notarization was made optional. Subsequently, we describe the results of an ad hoc experiment in order to evaluate the design of the policy. We performed a randomized control trial involving almost 350 notaries in Rome, Italy. We find that the majority of the notaries in our sample do not fulfill the obligation by asking a greater-than-zero fee, therefore suggesting the policy is not fully effective. We conclude that obliging notaries to perform specific tasks below-costs (or even free-of-charge) may not be an effective policy, leading to suboptimal results.
Citation
Luciano Lavecchia, Carlo Stagnaro, "There ain’t no such thing as a free deed: the case of Italian notaries", Journal: European Journal of Law and Economics, DOI: 10.1007/s10657-019-09612-x

Reports & Other Materials