Social and Behavioral Sciences Commons^™

2022-1 A Partial Identification Approach To Identifying The Determinants Of Human Capital Accumulation: An Application To Teachers, Nirav Mehta

Department of Economics Research Reports

This paper views teacher quality through the human capital perspective. Teacher quality exhibits substantial growth over teachers’ careers, but why it improves is not well understood. I use a human capital production function nesting On-the-Job-Training (OJT) and Learning-by-Doing (LBD) and experimental variation from Glewwe et al. (2010), a teacher incentive pay experiment in Kenya, to discern the presence and relative importance of these forces. The identified set for the OJT and LBD components has a closed-form solution, which depends on experimentally estimated average treatment effects. The results provide evidence of an LBD component, as well as an informative upper bound …

2022-2 Robust Contracts In Common Agency, Keler Marku, Sergio Ocampo, Jean-Baptiste Tondji

Department of Economics Research Reports

Business activities often involve a common agent managing a variety of projects on behalf of investors with potentially conflicting interests. The extent of the agent’s actions is also often unknown to investors, who have to design contracts that provide incentives to the manager despite this lack of crucial knowledge. We consider a game between several principals and a common agent, where principals know only a subset of the actions available to the agent. Principals demand robustness and evaluate contracts on a worst-case basis. This robust approach allows for a crisp characterization of the equilibrium contracts and payoffs and provides a …

2022-7 Market Power, Taxation And Product Variety In The Brazilian Automobile Industry, Daniel Chaves

Department of Economics Research Reports

This paper empirically assesses the impact of a discontinuous tax schedule on prices, markups and product assortment in the Brazilian automobile industry. To this end, I estimate a structural, equilibrium model of demand and supply for over a hundred different models and engine sizes of automobiles. With the model estimates of price elasticities and marginal costs I quantify how market power impacts the progressivity of the discontinuous tax schedule. I also examine how firms would reposition their products to avoid the tax and quantify the impact of this repositioning on equilibrium outcomes.

2022-5 Estimation Of Parametric Binary Outcome Models With Degenerate Pure Choice-Based Data With Application To Covid-19-Positive Tests From British Columbia, Nail Kashaev

Department of Economics Research Reports

I propose a generalized method of moments type procedure to estimate parametric binary choice models when the researcher only observes degenerate pure choices-based or presence-only data and has some information about the distribution of the covariates. This auxiliary information comes in the form of moments. I present an application based on the data on all COVID-19-positive tests from British Columbia. Publicly available demographic information on the population in British Columbia allows me to estimate the conditional probability of a person being COVID-19-positively tested conditional on demographics

2022-6 Prices, Profits, Proxies, And Production, Victor H. Aguiar, Nail Kashaev, Roy Allen

Department of Economics Research Reports

This paper studies nonparametric identification and counterfactual bounds for heterogeneous firms that can be ranked in terms of productivity. Our approach works when quantities and prices are latent, rendering standard approaches inapplicable. Instead, we require observation of profits or other optimizing-values such as costs or revenues, and either prices or price proxies of flexibly chosen variables. We extend classical duality results for price-taking firms to a setup with discrete heterogeneity, endogeneity, and limited variation in possibly latent prices. Finally, we show that convergence results for nonparametric estimators may be directly converted to convergence results for production sets.

2022-3 A Random Attention And Utility Model, Nail Kashaev, Victor H. Aguiar

Department of Economics Research Reports

We generalize the stochastic revealed preference methodology of McFadden and Richter (1990) for finite choice sets to settings with limited consideration. Our approach is nonparametric and requires partial choice set variation. We impose a monotonicity condition on attention first proposed by Cattaneo et al. (2020) and a stability condition on the marginal distribution of preferences. Our framework is amenable to statistical testing. These new restrictions extend widely known parametric models of consideration with heterogeneous preferences.

2022-8 Slutsky Matrix Symmetry: A New Behavioral Condition, Victor H. Aguiar, Roberto Serrano

Department of Economics Research Reports

The Slutsky matrix function encodes all the information about local variations in demand with respect to small (Slutsky) compensated price changes. When the demand function is the result of utility maximization the Slutsky matrix is symmetric. However, symmetry does not imply rationality. Here, we provide a necessary and sufficient condition for Slutsky symmetry. The new condition requires symmetric attention to compensated price-paths.

2022-9 A Rationalization Of The Weak Axiom Of Revealed Preference, Victor H. Aguiar, Per Hjertstrand, Roberto Serrano

Department of Economics Research Reports

Samuelson’s (1938) weak (generalized) axiom of revealed preference– WGARP–is a minimal and appealing consistency condition of choice. We offer a rationalization of WGARP in general settings. Our main result is an exact analog of the celebrated Afriat’s theorem, but for WGARP. Its ordinal rationalization is in terms of an asymmetric and locally nonsatiated preference function. Its cardinal rationalization uses a coalitional multi-utility (CMU) maxmin representation with a coherency restriction on the coalition structure. Effectively, the CMU representation aggregates piecemeal preferences within the decision maker (multiple rationales without preference reversals that allow for transitivity violations). Basic consumer theory and welfare analysis …

2022-11 Peter Howitt – A Keynesian Still In Recovery, David Laidler

Department of Economics Research Reports

Peter Howitt is best known for his contributions to growth theory, but his work in short-run economics, which began with his Ph.D thesis and still continues, is important and deserves attention. It lies firmly in the Keynesian macro-disequilibrium tradition of Clower and Leijonhufvud, and for a long time has been overshadowed by New-classical and New-Keynesian orthodoxy. However, the development of agent based modelling and behavioural economics will perhaps give disequilibrium macroeconomics a new lease on life.

2022-13 Savings After Retirement, Eric French, John Bailey Jones, Rory Mcgee

Department of Economics Research Reports

Abstract: Retired households, especially those with high lifetime income, decumulate their wealth very slowly, and many die leaving large estates. The three leading explanations for the ‘retirement savings puzzle” are the desire to insure against uncertain lifespans and medical expenses, the desire to leave bequests to one’s heirs, and the desire to remain in one’s own home. We discuss the empirical strategies used to differentiate these motivations, most of which go beyond wealth to exploit additional features of the data. The literature suggests that all the motivations are present, but has yet to reach a consensus about their relative importance

2022-12 The Big Expansion Of Rural Secondary Schooling During The Cultural Revolution And The Returns To Education In Rural China, Mengbing Zhu, Terry Sicular

Department of Economics Research Reports

During the Cultural Revolution China embarked on a dramatic, albeit temporary, expansion of secondary education in rural areas that affected tens of millions of children who reached secondary school age in the late 1960s and 1970s. The conventional wisdom is that this expansion was politicized and low quality. Using instrumental variables estimation, we exploit variation in the expansion across localities and birth cohorts to estimate the impact of Cultural Revolution education on individual outcomes. Creative use of historical county-level information matched with rich household survey data from the mid-1990s allows analysis of multiple outcomes. We find a significant, positive effect …

2022-1 The Role Of Non-Pecuniary Considerations: Location Decisions Of College Graduates From Low Income Backgrounds, Yifan Gong, Todd Stinebrickner, Ralph Stinebrickner, Yuxi Yao

Centre for Human Capital and Productivity. CHCP Working Papers

We examine the initial post-college geographic location decisions of students from hometowns in the Appalachian region that often lack substantial high-skilled job opportunities, focusing on the role of non-pecuniary considerations. Novel survey questions allow us to measure the full non-pecuniary benfits of each relevant geographic location, in dollar equivalents. A new specification test is designed and implemented to provide evidence about the quality of these non-pecuniary measures. Supplementing perceived location choice probabilities and expectations about pecuniary factors with our new non-pecuniary measures allows a new approach for obtaining a comprehensive understanding of the importance of pecuniary and non-pecuniary factors for …

2022-2 A Task-Based Theory Of Occupations With Multidimensional Heterogeneity, Sergio Ocampo

Centre for Human Capital and Productivity. CHCP Working Papers

I develop an assignment model of occupations with multidimensional heterogeneity in production tasks and worker skills. Tasks are distributed continuously in the skill space, whereas workers have a discrete distribution with a finite number of types. Occupations arise endogenously as bundles of tasks optimally assigned to a type of worker. The model allows us to study how occupations respond to changes in the economic environment, making it useful for analyzing the implications of automation, skill-biased technical change, offshoring, and worker training. Using the model, I characterize how wages, the marginal product of workers, the substitutability between worker types, and the …

2022-10 Computing Longitudinal Moments For Heterogeneous Agent Models, Sergio Ocampo, Baxter Robinson

Department of Economics Research Reports

Computing population moments for heterogeneous agent models is a necessary step for their estimation and evaluation. Computation based on Monte Carlo methods is usually time- and resource-consuming because it involves simulating a large sample of agents and potentially tracking them over time. We argue in favor of an alternative method for computing both cross-sectional and longitudinal moments that exploits the endogenous Markov transition function that defines the stationary distribution of agents in the model. The method relies on following the distribution of populations of interest by iterating forward the Markov transition function rather than focusing on a simulated sample of …

2022-4 Identification And Estimation Of Multinomial Choice Models With Latent Special Covariates, Nail Kashaev

Department of Economics Research Reports

Identification of multinomial choice models is often established by using special covariates that have full support. This paper shows how these identification results can be extended to a large class of multinomial choice models when all covariates are bounded. I also provide a new √n-consistent asymptotically normal estimator of the finite-dimensional parameters of the model.

2022-14 Use It Or Lose It: Efficiency And Redistributional Effects Of Wealth Taxation, Fatih Guvenen, Gueorgui Kambourov, Burhan Kuruscu, Sergio Ocampo, Daphne Chen

Department of Economics Research Reports

How does wealth taxation differ from capital income taxation? When the return on investment is equal across individuals, a well-known result is that the two tax systems are equivalent. Motivated by recent empirical evidence documenting persistent return heterogeneity, we revisit this question. With heterogeneity, the two tax systems typically have opposite implications for both efficiency and inequality. Under capital income taxation, entrepreneurs who are more productive and therefore generate more income pay higher taxes. Under wealth taxation, entrepreneurs who have similar wealth levels pay similar taxes regardless of their productivity, which expands the tax base, shifts the tax burden toward …

Essays In Financial Asset Pricing, Dillon Ross Huddleston

Electronic Thesis and Dissertation Repository

Three essays in financial asset pricing are given; one concerning the partial differential equation (PDE) pricing and hedging of a class of continuous/generalized power mean Asian options, via their (optimal) Lie point symmetry groups, leading to practical pricing formulas. The second presents high-frequency predictions of S&P 500 returns via several machine learning models, statistically significantly demonstrating short-horizon market predictability and economically significantly profitable (beyond transaction costs) trading strategies. The third compares profitability between these [(mean) ensemble] strategies and Asian option Δ-hedging, using results of the first. Interpreting bounds on arithmetic Asian option prices as ask and bid values, hedging profitability …

Machine Learning For Stock Prediction Based On Fundamental Analysis, Yuxuan Huang, Luiz Fernando Capretz, Danny Ho

Electrical and Computer Engineering Publications

Application of machine learning for stock prediction is attracting a lot of attention in recent years. A large amount of research has been conducted in this area and multiple existing results have shown that machine learning methods could be successfully used toward stock predicting using stocks’ historical data. Most of these existing approaches have focused on short term prediction using stocks’ historical price and technical indicators. In this paper, we prepared 22 years’ worth of stock quarterly financial data and investigated three machine learning algorithms: Feed-forward Neural Network (FNN), Random Forest (RF) and Adaptive Neural Fuzzy Inference System (ANFIS) for …

Reassessing The Case For Development Charges In Canadian Municipalities, Andrew Sancton

Centre for Urban Policy and Local Governance – Publications

“Growth should pay for growth.” This slogan—the common justification for development charges—is rarely challenged in municipal circles. The principle that those who cause new urban growth should pay for the infrastructure associated with it has generally been taken for granted, at least for the last few decades. Development charges evolved from post-1945 subdivision agreements and were initially accepted by most developers as a mechanism for enhancing the likelihood that current residents in a municipality would agree to new development. They now add as much as $90,000 to the cost of a new house in some parts of the Greater Toronto …

Essays On Firms In International Trade, Aldo Sandoval Hernandez

Electronic Thesis and Dissertation Repository

My thesis is composed by three chapters that study the important role that firms play in mediating imports and exports between countries, and how their decisions and heterogeneity can influence the behavior of macroeconomic outcomes. The first chapter, explores the role of demand uncertainty and learning in explaining the low survival rates and sales of new exporters using a manufacturing survey for Colombian firms. In the second chapter, using a transaction-level dataset for Colombian exporters, I document novel facts about the post-entry dynamics of firm performance and prices in international markets, and study their connection with the transmission of exchange …

Catch Me If You Can: Questionable Modelling Assumptions And Parameter Choices And Their Impact On Drug Reimbursement Decisions, Lina Ghattas

Undergraduate Student Research Internships Conference

The Canadian Agency for Drugs and Technologies in Health (CADTH) is a health technology assessment (HTA) agency. CADTH conducts appraisals on health technologies and makes reimbursement recommendations to Canadian public drug plans to guide their reimbursement decisions. When being considered for reimbursement, drug companies submit pharmacoeconomic reports, which typically include long-term decision models. These models make assumptions and use parameters that may favour one intervention over the other. In this study, we comprehensively review the last year of drug submissions appraised by CADTH, with the aim of identifying, categorizing, and critically reviewing key methodological flaws made by drug companies in …

Modeling Weather Vulnerability Dynamically: Applications Of Multiple Linear Regression To Weather Index Microinsurance, Sophie Wu

Undergraduate Student Research Internships Conference

This paper offers a broad overview of the philanthropic goals of microinsurance — namely, to provide vulnerable populations with more self-sufficient and sustainable methods of coping with risk — and through this lens, analyses the applications of multiple linear regression in developing dynamic models for microinsurance. We explain the foundations of MLR (multiple linear regression), and then give two examples for how a simple multiple linear regression model can be adapted with a novel outcome variable (famine) and dependent variables (climate change related costs). Overall, a better understanding of MLR can lend to a better understanding of how microinsurance can …

On The Estimation Of Heston-Nandi Garch Using Returns And/Or Options: A Simulation-Based Approach, Xize Ye

Electronic Thesis and Dissertation Repository

In this thesis, the Heston-Nandi GARCH(1,1) (henceforth, HN-GARCH) option pricing model is fitted via 4 maximum likelihood-based estimation and calibration approaches using simulated returns and/or options. The purpose is to examine the benefits of the joint estimation using both returns and options over the fundamental returns-only estimation on GARCH models. From our empirical studies, with the additional option sample, we can improve the efficiency of the estimates for HN-GARCH parameters. Nonetheless, the improvements for the risk premium factor, both from empirical standard errors, and sample RMSEs, are insignificant. In addition, option prices are simulated with a pre-defined noise structure and …

Analysis Of Health Care Costs Over A One-Year Period Following Anticoagulant Therapy Among Ontario Patients Diagnosed With Atrial Fibrillation, Michael Situ

Electronic Thesis and Dissertation Repository

Atrial fibrillation patients are at high risk of ischemic strokes, which can be drastically reduced using oral anticoagulants (OACs). Warfarin has been the standard OAC for this population but its effectiveness rests on consistent monitoring with the potential for severe bleeding events. Newer OACs, like rivaroxaban and apixaban, address these drawbacks but have a comparatively higher upfront cost. Uncertainty remains over which OAC is cost-saving from a health care system perspective. Using a retrospective cohort study design and inverse probability weighting regression adjustment estimators, one-year health care costs among patients treated with warfarin, rivaroxaban, and apixaban were compared. Compared to …

Essays In Financial Econometrics And Machine Learning, Fred Liu

Electronic Thesis and Dissertation Repository

Financial econometrics is a highly interdisciplinary field that integrates finance, economics, probability, statistics, and applied mathematics. Machine learning is a growing area in finance that is particularly suitable for studying problems with many variables. My thesis contains three chapters that explore financial econometrics and machine learning in the fields of asset pricing and risk management.

Chapter 2 studies the implications of the new Basel 3 regulations. In 2019, the BCBS finalized the Basel 3 regulatory regime, which changes the regulatory measure of market risk and adds new complex calculations based on liquidity and risk factors. This chapter is motivated by …

Essays On Private Information And Monetary Policy, Zijian Wang

Electronic Thesis and Dissertation Repository

In our economy, many interactions between individuals involve one party possessing more or better information than the other party (i.e., private information). For example, in asset markets, sellers often have better knowledge about the quality of the assets than buyers. Private information also exists when governments collect taxes, because taxpayers typically have more information about their income compared to the government. In my thesis, I explore the implications of private information in three novel contexts.

In Chapter 2, I study the implications of tax evasion for the design of central bank digital currency, which is an emerging payment instrument. I …

Heavy Metal Fundraisers: Entrepreneurial Recording Artists In Platform Capitalism, Jason Netherton

Electronic Thesis and Dissertation Repository

Abstract

How do cultural producers square customary understandings of what it means to be authentic and autonomous creators in new contexts characterized by digital-era entrepreneurial pressures and online platform-mediated financial opportunities? This study examines how heavy metal recording artists experience these pressures; how some of them engage in platform-based crowdfunding, argue over its legitimacy, and rationalize varying degrees of acceptance and dependence. First, my analysis centers on a case study which follows the experiences of a progressive metal band as they navigate a new financial relation in conjunction first with the fundraising platform Pozible and then the patronage-based crowdfunding platform …

Three Essays On Individual And Household Responses To Information, Liquidity, And Policy Shocks, Brian C. Held

Electronic Thesis and Dissertation Repository

This thesis consists of three empirical studies of heterogeneous individual and household behaviour in response to shocks that occur in the labour market and in the consumer marketplace. Chapter 2 contributes to the labour literature by examining the long-term effects of firings on subsequent labour market outcomes from an ability learning perspective. Chapter 3 contributes to the household savings and personal finance literature by studying how households navigate temporary liquidity shocks due to income disruption. Chapter 4 contributes to our understanding of online sales tax policy in the context of the rural-urban divide. In Chapter 2, I develop a search …

2021-2 A Category For Extensive-Form Games, Peter A. Streufert

Department of Economics Research Reports

No abstract provided.

2021-6 The Inner Workings Of A Hub-And-Spoke Cartel In The Automotive Fuel Industry, Daniel Chaves, Marco Duarte

Department of Economics Research Reports

We analyze a hub-and-spoke cartel in the Brazilian automotivefuel industry. Using the court documents and detailed data on the supply chain we uncover three mechanisms beyond information sharing used by wholesalers (hub) to help retailers (spokes) solve the obstacles of price coordination: vertical transfers across asymmetric spokes; subsidies during punishment; and cost stabilization. We argue that wholesalers benefited from the cartel by being the exclusive supplier during the scheme. We use the synthetic control approach to quantify how successful the cartel was in increasing markups. We find that not only retailers, but wholesalers benefited from the cartel.