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Singapore Management University

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Research Collection School Of Economics

2021

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Full-Text Articles in Social and Behavioral Sciences

Does Precise Case Disclosure Limit Precautionary Behavior? Evidence From Covid-19 In Singapore, Aljoscha Janssen, Matthew H. Shapiro Dec 2021

Does Precise Case Disclosure Limit Precautionary Behavior? Evidence From Covid-19 In Singapore, Aljoscha Janssen, Matthew H. Shapiro

Research Collection School Of Economics

Limiting the spread of contagious diseases can involve both government-managed and voluntary efforts. Governments have a number of policy options beyond direct intervention that can shape individuals’ responses to a pandemic and its associated costs. During its first wave of COVID-19 cases, Singapore was among a few countries that attempted to adjust behavior through the announcement of detailed case information. Singapore's Ministry of Health maintained and shared precise, daily information detailing local travel behavior and residences of COVID-19 cases. We use this policy along with device-level cellphone data to quantify how local and national COVID-19 case announcements trigger differential behavioral …

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Subway, Collaborative Matching, And Innovation, Yumi Koh, Li Jing, Jianhuan Xu Dec 2021

Subway, Collaborative Matching, And Innovation, Yumi Koh, Li Jing, Jianhuan Xu

Research Collection School Of Economics

Expansion of subway networks helps to enhance connectivity and matches of people by facilitating their mobility. Using rapid expansion of the Beijing subway from 2000 to 2018, we analyze its impact on collaborative matches in innovations. We find that an hour reduction in travel time between a pair of locations in Beijing brought a 15% to 38% increase in collaborated patents. Far-apart location pairs were more affected, and the local average treatment effect is approximately 35% to 82%. Such effect is mainly driven by increased matches among highly productive inventors due to complementarity between inventors’ productivity and travel time. At …

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Economic Impact Of Targeted Government Responses To Covid-19: Evidence From The Large-Scale Cluster In Seoul, Kim, Kanghyock Koh, Jinwook Shin Dec 2021

Economic Impact Of Targeted Government Responses To Covid-19: Evidence From The Large-Scale Cluster In Seoul, Kim, Kanghyock Koh, Jinwook Shin

Research Collection School Of Economics

We estimate the economic impact of South Korea's targeted responses to the first large-scale COVID-19 cluster in Seoul. We find that foot traffic and retail sales decreased only within a 300 meter radius of the cluster and recovered to its pre-outbreak level after four weeks. The reductions appear to be driven by temporary business closures rather than the risk avoidance behavior of the citizens. Our results imply that less intense, but more targeted COVID-19 interventions, such as pin-pointed, temporary closures of businesses, can be a low-cost alternative after lifting strict social distancing measures.

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Tapping On Growth Opportunities Through Trade And Investment, Andy Feng, Gerald Foong, Geraldine Lim Dec 2021

Tapping On Growth Opportunities Through Trade And Investment, Andy Feng, Gerald Foong, Geraldine Lim

Research Collection School Of Economics

As a small and open economy, external developments play a crucial role in shaping Singapore’s growth prospects. In particular, external demand is pivotal in supporting the growth of Singapore’s gross domestic product (GDP) beyond the limits afforded by a small domestic market. Furthermore, due to the resource constraints faced by Singapore, its production of goods and services to meet both external and domestic demand requires a substantial use of imported inputs. Apart from trade, Singapore’s openness and outward-orientation also extend to its embrace of inward and outward investments to grow its economy and create jobs for Singaporeans. In view of …

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A Practical Guide To Harnessing The Har Volatility Model, Adam Clements, Daniel P. A. Preve Dec 2021

A Practical Guide To Harnessing The Har Volatility Model, Adam Clements, Daniel P. A. Preve

Research Collection School Of Economics

The standard heterogeneous autoregressive (HAR) model is perhaps the most popular benchmark model for forecasting return volatility. It is often estimated using raw realized variance (RV) and ordinary least squares (OLS). However, given the stylized facts of RV and well-known properties of OLS, this combination should be far from ideal. The aim of this paper is to investigate how the predictive accuracy of the HAR model depends on the choice of estimator, transformation, or combination scheme made by the market practitioner. In an out-of-sample study, covering the S&P 500 index and 26 frequently traded NYSE stocks, it is found that …

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Vat Treatment Of The Financial Services: Implications For The Real Economy, Ismail Baydur, Fatih Yilmaz Dec 2021

Vat Treatment Of The Financial Services: Implications For The Real Economy, Ismail Baydur, Fatih Yilmaz

Research Collection School Of Economics

Financial institutions are exempt from the value-added tax (VAT) in most countries. We develop a general equilibrium model with endogenous firm entry and a banking sector to accommodate three key distortions related to exempt treatment: (i) self-supply bias in the banking sector, (ii) under-taxation of payment services, and (iii) input distortions in the business sector and tax cascading. We calibrate our model to the average of Germany, France, and the UK data. Our results show that repealing exempt treatment always increases tax revenues. However, welfare gains occur only at low VAT rates due to the hump-shaped VAT Laffer curve.

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Economic Forecasting In An Epidemic: A Break From The Past?, Hwee Kwan Chow, Keen Meng Choy Dec 2021

Economic Forecasting In An Epidemic: A Break From The Past?, Hwee Kwan Chow, Keen Meng Choy

Research Collection School Of Economics

This paper aims to investigate whether the predictive ability and behaviour of professional forecasters are different during the Covid-19 epidemic as compared with the global financial crisis of 2008 and normal times. To this end, we utilise a survey of professional forecasters in Singapore collated by the central bank to analyse the forecasting record for GDP growth and CPI inflation. We first examine the point forecasts to document the extent of forecast failure in the pandemic crisis and test for behavioural explanations of the possible sources of forecast errors such as leader following and herding behaviour. Using percentile-based summary measures …

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What, Why And How Financial Development Matters: Evidence Of Asean-5, Asia-5 And Oecd-7 Economies, Swee Liang Tan Dec 2021

What, Why And How Financial Development Matters: Evidence Of Asean-5, Asia-5 And Oecd-7 Economies, Swee Liang Tan

Research Collection School Of Economics

This paper analysed the association between bank and capital markets financial development with income per capita in three regions; ASEAN-5 economies (Singapore, Malaysia, Thailand, Philippines, Indonesia), Asia-5 (Japan, China, Hong Kong SAR, South Korea and India) and OECD-7 (Australia, Canada, Denmark, Norway, Sweden, UK and US) covering the period from 2000 to 2017 using panel data analysis. Fixed effect regression models with Driscoll-Kraay standard errors to account for the problem of heteroskedastic and autocorrelated error structure are used. What ASEAN-5 can learn from Asia-5 and OECD-7 experience is that bank size does matter for Asia-5 and OECD-7 despite digital disruptions …

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Fixed-K Inference For Volatility, Tim Bollerslev, Jia Li, Zhipeng Liao Nov 2021

Fixed-K Inference For Volatility, Tim Bollerslev, Jia Li, Zhipeng Liao

Research Collection School Of Economics

We present a new theory for the conduct of nonparametric inference about the latent spot volatility of a semimartingale asset price process. In contrast to existing theories based on the asymptotic notion of an increasing number of observations in local estimation blocks, our theory treats the estimation block size k as fixed. While the resulting spot volatility estimator is no longer consistent, the new theory permits the construction of asymptotically valid and easy-to-calculate pointwise confidence intervals for the volatility at any given point in time. Extending the theory to a high-dimensional inference setting with a growing number of estimation blocks …

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Scaled, Citizen-Led, And Public Qualitative Research: A Framework For Citizen Social Science, Amirah Amirrudin, Nicholas Harrigan, Ijlal Naqvi Nov 2021

Scaled, Citizen-Led, And Public Qualitative Research: A Framework For Citizen Social Science, Amirah Amirrudin, Nicholas Harrigan, Ijlal Naqvi

Research Collection School Of Economics

We propose a framework for citizen social science that brings together three reinforcing elements of a research project – scale, citizen-leadership, and publicness – to improve qualitative research. Our framework was born out of necessity; a desire to involve ordinary citizens, in researching public issues, with limited funding. We illustrate the application of our framework using insights from research we have led, involving first, a series of qualitative studies of state and civil society organizations working on community engagement by three separate years of public policy students; and second, a qualitative study on the system for processing salary and injury …

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Global Value Chain Development Report 2021: Beyond Production, Yuqing Xing, Elisabetta Gentile, David Dollar, Et Al. Nov 2021

Global Value Chain Development Report 2021: Beyond Production, Yuqing Xing, Elisabetta Gentile, David Dollar, Et Al.

Research Collection School Of Economics

A radical shift is underway in global value chains as they increasingly move beyond traditional manufacturing processes to services and other intangible assets. Digitization is a leading factor in this transformation, which is being accelerated by the coronavirus disease (COVID-19) pandemic. The Global Value Chain Development Report 2021, the third of a biennial series, explores this shift Beyond Production. This report shows how the rise of services value chains offers a new path to development and how protectionism and geopolitical tensions, environmental risks, and pandemics are undermining the stability of global value chains and forcing their reorganization geographically.

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Urbanization Policy And Economic Development: A Quantitative Analysis Of China's Differential Hukou Reforms, Wen-Tai Hsu, Lin Ma Nov 2021

Urbanization Policy And Economic Development: A Quantitative Analysis Of China's Differential Hukou Reforms, Wen-Tai Hsu, Lin Ma

Research Collection School Of Economics

The household registration system (hukou system) in China has hampered rural-urban migration by posing large migration friction. The system has been gradually relaxed in the past few decades, but the reforms have been differential in city size. We find a striking contrast in migration patterns between years 2005 and 2015; rural people tended to move more to large cities in 2005, but more to small- and medium-sized cities in 2015. We calibrate a spatial quantitative model to the world economy in both years with China divided into rural, mega-city, and other-city regions. We find that alternative urbanization policies that are …

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Health Insurance And Subjective Well-Being: Evidence From Two Healthcare Reforms In The United States, Seonghoon Kim Nov 2021

Health Insurance And Subjective Well-Being: Evidence From Two Healthcare Reforms In The United States, Seonghoon Kim

Research Collection School Of Economics

We study the role of access to health insurance coverage as a determinant of individuals' subjective well-being (SWB) by analyzing large-scale healthcare reforms in the United States. Using data from the Behavioral Risk Factor Surveillance System and Panel Study of Income Dynamics, we find that the 2006 Massachusetts reform and 2014 Affordable Care Act Medicaid expansion improved the overall life satisfaction of Massachusetts residents and low-income adults in Medicaid expansion states, respectively. The results are robust to various sensitivity and falsification tests. Our findings imply that access to health insurance plays an important role in improving SWB. Without considering psychological …

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The Price Elasticity Of African Elephant Poaching, Quy-Toan Do, Andrei A. Levchenko, Lin Ma, Julian Blanc, Holly Dublin, Tom Milliken Oct 2021

The Price Elasticity Of African Elephant Poaching, Quy-Toan Do, Andrei A. Levchenko, Lin Ma, Julian Blanc, Holly Dublin, Tom Milliken

Research Collection School Of Economics

The objective of this paper is to provide an estimate of the elasticity of elephant poaching with respect to prices. Ivory being a storable commodity subjects its price to Hotelling’s no-arbitrage condition, hence allowing identification of the supply curve. The price of gold, one of many commodities used as stores of value, is thus used as an instrument for ivory prices. The supply of illegal ivory is found to be price inelastic with an elasticity of 0.4, with changes in consumer prices passing-through to prices faced by producers at a rate close to unity. Estimations based on a number of …

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Social Norms And Fertility, Sunha Myong, Junghae Park, Junjian Yi Oct 2021

Social Norms And Fertility, Sunha Myong, Junghae Park, Junjian Yi

Research Collection School Of Economics

We document three stylized facts on marriage and fertility patterns in East Asian societies: (i) their marriage rates are among the highest in the world, but their total fertility is the lowest; (ii) although they have the lowest total fertility, almost all married women have at least one child; and (iii) almost no single women have any children. As these societies have been influenced by Confucianism over millennia, marriage and fertility decisions are potentially shaped by two social norms: the unequal gender division of childcare and the stigma attached to out-of-wedlock births. We present a model incorporating the two social …

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Spatial Dynamic Models With Short Panels: Evaluating The Impact Of Home Purchase Restrictions On Housing Prices, Naqun Huang, Zhenlin Yang Oct 2021

Spatial Dynamic Models With Short Panels: Evaluating The Impact Of Home Purchase Restrictions On Housing Prices, Naqun Huang, Zhenlin Yang

Research Collection School Of Economics

Since the 2007 housing crisis in the United States, many countries have begun implementing various macroprudential policies to curb the ongoing rise in housing prices. As there is no clear consensus in the literature on the efficacy of these interventions, understanding their short-term impacts is crucial in informing future policy designs. Adapting a new econometric technique, we examine the short-term impact of home purchase restrictions in Singapore, accounting for the short panel nature of the data and the existence of dynamic, spatial, spatiotemporal, and unit-specific effects. Using quarterly housing data over 2012Q4-2014Q2, we find that public housing prices decrease by …

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Decree Power In Parliamentary Systems: Theory And Evidence From India, Madhav Shrihari Aney, Shubhankar Dam Oct 2021

Decree Power In Parliamentary Systems: Theory And Evidence From India, Madhav Shrihari Aney, Shubhankar Dam

Research Collection School Of Economics

Decree powers are common to presidential systems; they are rarely found in parliamentary ones. We analyze decree powers in one such rare setting: India. We show that bicameral minority governments in India systematically use ordinances to circumvent parliament and prosecute their legislative agendas. They promulgate more ordinances, enact less legislation, and often repromulgate lapsed ordinances. These patterns suggest that, with bicameral minority governments, the locus of lawmaking shifts to the executive branch. While both majority and minority governments invoke ordinances, the latter do so systematically to get around their parliamentary deficit. In the hands of minority governments, then, the mechanism …

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Challenges To Social Mobility In Singapore, Kong Weng Ho, Marcus Kheng Tat Tan Sep 2021

Challenges To Social Mobility In Singapore, Kong Weng Ho, Marcus Kheng Tat Tan

Research Collection School Of Economics

Singapore had achieved impressive economic growth together with a high level of upward mobility since her independence in 1965. However, the growth process might have become more uneven, in addition to diminishing growth for a matured economy like Singapore, which is also a highly open city state subject to competitive forces from other economies. Singapore has fared well recently,
evident from the 2020 social mobility findings reported by the World Economic Forum and the decline in Gini coefficients for the past decade. We discuss the education system in Singapore and the recently formed National Jobs Council, both important institutions for …

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Singapore In The Global Value Chains, Pao-Li Chang, Tran Bao Phuong Nguyen Sep 2021

Singapore In The Global Value Chains, Pao-Li Chang, Tran Bao Phuong Nguyen

Research Collection School Of Economics

This chapter analyses the participation of Singapore in the global value chains (GVC): how much of its gross exports are GVC-related trade; how downstream it is; and which countries are its key upstream and downstream trade partners. The analysis is carried out both at the country aggregate level and at the sector level. New formulas are proposed in the gross export decomposition framework of Koopman, Wang and Wei (2014) and Borin and Mancini (2017), to characterise a country/industry’s downstreamness in the GVC and the importance of each trade partner in its backward/forward linkages. Singapore started off with a very high …

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Providing Childcare, Christine Ho, Sunha Myong Sep 2021

Providing Childcare, Christine Ho, Sunha Myong

Research Collection School Of Economics

Women’s economic empowerment has been hailed as one of the most remarkable revolutions in the past 50 years. Yet, women still face the lion’s share of the burden of childcare despite major progress in their education and earnings capacity. This is particularly salient in many Asian countries. This chapter proposes a synthesis of the state of knowledge on childcare and discusses policy-relevant issues applicable to the Singapore context. Selected policies are documented and lessons from the international landscape are discussed. Raising children incurs both direct costs in the form of childcare and opportunity costs in the form of career costs. …

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Entrepreneurship In Singapore, Jungho Lee Sep 2021

Entrepreneurship In Singapore, Jungho Lee

Research Collection School Of Economics

Singapore has completed its catch-up growth phase and needs to find a new growth engine. Entrepreneurship can contribute to a nation’s productivity growth. The purpose of this chapter is twofold. First, a theoretical framework is presented, along with empirical evidence, to understand government interventions aimed at boosting entrepreneurship. Second, using the framework, the chapter discusses whether Singapore’s current policies are suitable for helping entrepreneurship. The theory demonstrates four reasons why government intervention is needed: (1) resource misallocation, (2) positive externality, (3) entrepreneurial human capital, and (4) tax and default policies. Singapore’s government has implemented various policies that potentially fix market …

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Achieving Price Stability, Hwee Kwan Chow, Taojun Xie Sep 2021

Achieving Price Stability, Hwee Kwan Chow, Taojun Xie

Research Collection School Of Economics

The aim of delivering medium-term price stability is the stated objective of the Monetary Authority of Singapore. To this end, the central bank adopted an unusual exchange rate–based monetary policy framework that has served the economy well over the past decades. However, the shift from the phase of catch-up growth to a mature economy raises the question of whether the current monetary policy framework needs reformulation. Moreover, as global financial integration deepens, surges in cross-border capital flows impact Singapore’s exchange rate and asset prices, which has implications for economic dynamism and inclusion. Since a large and persistent deviation of the …

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Rationalizable Implementation In Finite Mechanisms, Y-C Chen, Takashi Kunimoto, Y Sun, S. Xiong Sep 2021

Rationalizable Implementation In Finite Mechanisms, Y-C Chen, Takashi Kunimoto, Y Sun, S. Xiong

Research Collection School Of Economics

We prove that the Maskin monotonicity condition (proposed by Bergemann et al. (2011)) fully characterizes exact rationalizable implementation in an environment with lotteries and transfers. Different from previous papers, our approach possesses many appealing features simultaneously, e.g., finite mechanisms with no integer game or modulo game are used; no transfers are made in any rationalizable profile; the message space is small; the implementation is robust to information perturbations in the sense of Oury and Tercieux (2012).

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On The Market Failure Of “Missing Pioneers”, Shang-Jin Wei, Ziru Wei, Jianhuan Xu Sep 2021

On The Market Failure Of “Missing Pioneers”, Shang-Jin Wei, Ziru Wei, Jianhuan Xu

Research Collection School Of Economics

An influential hypothesis states that export pioneers are too few relative to social optimum because the first exporter's action creates an informational public good for all subsequent exporters. The hypothesis has been invoked to justify certain types of government interventions. We note, however, that such market failure requires two inequalities to hold simultaneously: the discovery cost is neither too low nor too high. Neither has to hold in the data. We propose a structural estimation framework to evaluate the hypothesis, and estimate the parameters based on the customs data of Chinese electronics exports. Our key finding is that "missing pioneers" …

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The Importance Of Considering Debt And Young Children In Activation: A Survival Analysis Of Return To Welfare, Irene N. Y. Ng, Jian Qi Tan, Mathews Mathew, Kong Weng Ho, Yi Ting Ting Sep 2021

The Importance Of Considering Debt And Young Children In Activation: A Survival Analysis Of Return To Welfare, Irene N. Y. Ng, Jian Qi Tan, Mathews Mathew, Kong Weng Ho, Yi Ting Ting

Research Collection School Of Economics

While there has been much research on welfare exit and entry into employment, less research has looked at return to government assistance. Applying survival analysis on data from a national government assistance programme in Singapore, we found two important factors of welfare return to which activation programmes need to pay greater attention. First, return was more likely if former beneficiaries accumulated a higher number of types of arrears rather than higher dollar values of arrears. This new finding contributes to the emerging literature on bandwidth tax, and suggests the importance of designing programmes that relieve mental accounting due to debt …

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Equal-Quantile Rules In Resource Allocation With Uncertain Needs, Yan Long, Jay Sethuraman, Jingyi Xue Sep 2021

Equal-Quantile Rules In Resource Allocation With Uncertain Needs, Yan Long, Jay Sethuraman, Jingyi Xue

Research Collection School Of Economics

A group of agents have uncertain needs on a resource, which must be allocated before uncertainty re-solves. We propose a parametric class of division rules we call equal-quantile rules. The parameter lambda of an equal-quantile rule is the maximal probability of satiation imposed on agents - for each agent, the prob-ability that his assignment is no less than his realized need is at most lambda. It determines the extent to which the resource should be used to satiate agents. If the resource is no more than the sum of the agents' lambda-quantile assignments, it is fully allocated and the rule …

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Financing Singapore’S Smes And The Crowdfunding Industry In Singapore, Swee Liang Tan, Yoke Wang Tok, Chansriniyom Thitipat Aug 2021

Financing Singapore’S Smes And The Crowdfunding Industry In Singapore, Swee Liang Tan, Yoke Wang Tok, Chansriniyom Thitipat

Research Collection School Of Economics

As new digital technologies emerge that make the provision of financial services more efficient, they hold the potential to address barriers that SMEs face in accessing credit. This paper finds empirical evidence that crowdfunding for SMEs improved SMEs’ timeliness to pay debt in Singapore. Anecdotal evidence from growing SMEs suggests that getting crowdfunding loans also induced financing from banks, leading to more efficient allocation of credit. In just four years, Singapore’s crowdfunding volume has grown rapidly making it one of the top crowdfunding hubs in Southeast Asia in 2018. The rapid development of Singapore’s crowdfunding industry can be attributed to …

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Wild Bootstrap For Instrumental Variable Regressions With Weak And Few Clusters, Wenjie Wang, Yichong Zhang Aug 2021

Wild Bootstrap For Instrumental Variable Regressions With Weak And Few Clusters, Wenjie Wang, Yichong Zhang

Research Collection School Of Economics

We study the wild bootstrap inference for instrumental variable (quantile) regressions in the framework of a small number of large clusters, in which the number of clusters is viewed as fixed and the number of observations for each cluster diverges to infinity. For subvector inference, we show that the wild bootstrap Wald test with or without using the cluster-robust covariance matrix controls size asymptotically up to a small error as long as the parameters of endogenous variables are strongly identified in at least one of the clusters. We further develop a wild bootstrap Anderson-Rubin (AR) test for full-vector inference and …

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Jobs For Justice(S): Corruption In The Supreme Court Of India, Madhav S. Aney, Shubhankar Dam, Giovanni Ko Aug 2021

Jobs For Justice(S): Corruption In The Supreme Court Of India, Madhav S. Aney, Shubhankar Dam, Giovanni Ko

Research Collection School Of Economics

We investigate whether judicial decisions are affected by career concerns of judges by analyzing two questions: Do judges respond to incentives to pander by ruling in favor of the government in the hope of receiving jobs after retiring from the Supreme Court? Does the government reward judges who rule in its favor with prestigious jobs? We construct a data set of Supreme Court of India cases involving the government for 1999–2014. We find that incentives to pander have a causal effect on judicial decision-making, and they are jointly determined by the importance of the case and whether the judge retires …

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Efficient Estimation Of Integrated Volatility Functionals Under General Volatility Dynamics, Jia Li, Yunxiao Liu Aug 2021

Efficient Estimation Of Integrated Volatility Functionals Under General Volatility Dynamics, Jia Li, Yunxiao Liu

Research Collection School Of Economics

We provide an asymptotic theory for the estimation of a general class of smooth nonlinear integrated volatility functionals. Such functionals are broadly useful for measuring financial risk and estimating economic models using high-frequency transaction data. The theory is valid under general volatility dynamics, which accommodates both Itô semimartingales (e.g., jump-diffusions) and long-memory processes (e.g., fractional Brownian motions). We establish the semiparametric efficiency bound under a nonstandard nonergodic setting with infill asymptotics, and show that the proposed estimator attains this efficiency bound. These results on efficient estimation are further extended to a setting with irregularly sampled data.

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