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Full-Text Articles in Social and Behavioral Sciences
Distribution Of Wealth And Interdependent Preferences, Andrew Grodner, Thomas J. Kniesner
Distribution Of Wealth And Interdependent Preferences, Andrew Grodner, Thomas J. Kniesner
Economics - All Scholarship
We examine the socially optimal wealth distribution in a two-person two-good model with heterogeneous workers and asymmetric social interactions where only one (social) individual derives positive or negative utility from the leisure of the other (non-social) individual. We show that the interdependence can effectively counter-act the need to transfer wealth to low-wage individuals and may require them to be poorer by all objective measures. We demonstrate that in the presence of social interactions it can be socially desirable to keep substantial wealth inequality.
The Incidence Of Tobacco Taxation: Evidence From Geographic Micro-Level Data, Andrew Hanson, Ryan S. Sullivan
The Incidence Of Tobacco Taxation: Evidence From Geographic Micro-Level Data, Andrew Hanson, Ryan S. Sullivan
Economics - All Scholarship
This paper uses a recent increase in the state of Wisconsin's tobacco tax as a natural experiment to measure the economic incidence of tobacco taxation. We estimate the economic incidence of tobacco taxation using micro level data on cigarette prices collected from retail locations in Wisconsin and states that share its border. We find that Wisconsin's $1.00 increase in tobacco tax was over-shifted to consumers; they pay the entire amount of the tax as well as a premium of between $0.08 and $0.17 per pack of cigarettes. We use geo-coded data to test if the incidence of the tobacco tax …
Social Interactions In Demand, Andrew Grodner, Thomas J. Kniesner
Social Interactions In Demand, Andrew Grodner, Thomas J. Kniesner
Economics - All Scholarship
We examine theoretically demand in a two-good economy where the demand of one good is influenced by either a spillover effect in the form of an externality from other consumers' choices and or a conformity effect representing a need for making similar choices as others. A positive spillover effect increases the demand for the good with interactions, and a conformity effect makes the demand curve pivot around the average market demand to make demand less price sensitive. The collateral implication is that spillover in consumption increases the associated derived demand for labor and conformity in consumption makes the associated derived …
Can Offshoring Reduce Unemployment?, Devashish Mitra, Priya Ranjan
Can Offshoring Reduce Unemployment?, Devashish Mitra, Priya Ranjan
Economics - All Scholarship
In this paper, in order to study the impact offshoring on sectoral and economywide rates of unemployment, we construct a two-sector, general-equilibrium model in which labor is mobile across the two sectors, and unemployment is caused by search frictions. We find that, contrary to general perception, wage increases and sectoral unemployment decreases due to offshoring. This result can be understood to arise from the productivity enhancing (cost reducing) effect of offshoring. If the search cost is identical in the two sectors, or is higher in the sector which experiences offshoring, the economywide rate of unemployment decreases. When we modify the …
Understanding Declining Mobility And Interhousehold Transfers Among East African Pastoralists, Marieke Huysentruyt, Christopher B. Barrett, John G. Mcpeak
Understanding Declining Mobility And Interhousehold Transfers Among East African Pastoralists, Marieke Huysentruyt, Christopher B. Barrett, John G. Mcpeak
Economics - All Scholarship
We model interhousehold transfers between nomadic livestock herders as the state-dependent consequence of individuals' strategic interdependence resulting from the existence of multiple, opposing externalities. A public good security externality among individuals sharing a social (e.g., ethnic) identity in a potentially hostile environment creates incentives to band together. Self-interested interhousehold wealth transfers from wealthier herders to poorer ones may emerge endogenously within a limited wealth space as a means to motivate accompanying migration by the recipient. The distributional reach and size of the transfer are limited, however, by a resource appropriation externality related to the use of common property grazing lands. …
Fixed-Effect Estimation Of Highly-Mobile Production Technologies, William C. Horrace, Kurt E. Schnier
Fixed-Effect Estimation Of Highly-Mobile Production Technologies, William C. Horrace, Kurt E. Schnier
Economics - All Scholarship
We consider fixed-effect estimation of a production function where inputs and outputs vary over time, space, and cross-sectional unit. Variability in the spatial dimension allows for time-varying individual effects, without parametric assumptions on the effects. Asymptotics along the spatial dimension provide consistency and normality of the marginal products. A finite-sample example is provided: a production function for bottom-trawler fishing vessels in the flatfish fisheries of the Bering Sea. We find significant spatial variability of output (catch) which we exploit in estimation of a harvesting function.
Semiparametric Deconvolution With Unknown Error Variance, William C. Horrace, Chris Parmeter
Semiparametric Deconvolution With Unknown Error Variance, William C. Horrace, Chris Parmeter
Economics - All Scholarship
Deconvolution is a useful statistical technique for recovering an unknown density in the presence of measurement error. Typically, the method hinges on stringent assumptions about the nature of the measurement error, more specifically, that the distribution is entirely known. We relax this assumption in the context of a regression error component model and develop an estimator for the unknown density. We show semi-uniform consistency of the estimator and provide Monte Carlo evidence that demonstrates the merits of the method.
Perspectives On Development In Arid And Semi-Arid East Africa: Results Of A Ranking Exercise, John G. Mcpeak, Cheryl R. Doss, Christopher B. Barrett, Patti Kristjanson
Perspectives On Development In Arid And Semi-Arid East Africa: Results Of A Ranking Exercise, John G. Mcpeak, Cheryl R. Doss, Christopher B. Barrett, Patti Kristjanson
Economics - All Scholarship
This study investigates perspectives on development held by individuals living in arid and semi-arid areas of northern Kenya and southern Ethiopia. Overall, we find that interventions to meet basic human needs (access to water, health care and education) are the most highly desired. Projects supporting pastoral livelihoods (livestock health and marketing-oriented, restocking and conflict resolution) are second most important, followed by those that support alternatives to pastoralism (cropping, other income generating activities). Econometric analysis indicates that variation in rankings is mostly driven by variation across communities rather than across households within communities, lending support to community-based approaches to priority setting.
Testing For Random Effects And Spatial Lag Dependence In Panel Data Models, Badi Baltagi, Long Liu
Testing For Random Effects And Spatial Lag Dependence In Panel Data Models, Badi Baltagi, Long Liu
Economics - All Scholarship
This paper derives a joint Lagrange Multiplier (LM) test which simultaneously tests for the absence of spatial lag dependence and random individual effects in a panel data regression model. It turns out that this LM statistic is the sum of two standard LM statistics. The first one tests for the absence of spatial lag dependence ignoring the random individual effects, and the second one tests for the absence of random individual effects ignoring the spatial lag dependence. This paper also derives two conditional LM tests. The first one tests for the absence of random individual effects without ignoring the possible …
International Trade And Unemployment: Theory And Cross-National Evidence, Pushan Dutt, Devashish Mitra, Priya Ranjan
International Trade And Unemployment: Theory And Cross-National Evidence, Pushan Dutt, Devashish Mitra, Priya Ranjan
Economics - All Scholarship
In this paper, we present two alternative models of trade and unemployment, in which unemployment is generated through a search mechanism. The basic framework of the first model is Ricardian in that the only factor of production is labor and trade is based on relative technological differences. The second model has a Heckscher-Ohlin (H-O) framework with two factors of production, namely labor and capital that are intersectorally mobile. Using cross-country data on various measures of trade policy, unemployment and a variety of controls, we find strong evidence for the Ricardian prediction that unemployment and trade openness are negatively related (protection …
Entrepreneurship And Urban Success: Toward A Policy Consensus, Zoltan J. Acs, Edward L. Glaeser, Robert E. Litan, Lee Fleming, Stephan J. Goetz, William R. Kerr, Steven Klepper, Stuart S. Rosenthal, Olav Sorenson, William C. Strange
Entrepreneurship And Urban Success: Toward A Policy Consensus, Zoltan J. Acs, Edward L. Glaeser, Robert E. Litan, Lee Fleming, Stephan J. Goetz, William R. Kerr, Steven Klepper, Stuart S. Rosenthal, Olav Sorenson, William C. Strange
Economics - All Scholarship
Like all politics, all entrepreneurship is local. Individuals launch firms and, if successful, expand their enterprises to other locations. But new firms must start somewhere, even if their businesses are conducted largely or exclusively on the Internet. Likewise, policymakers at local and state levels increasingly recognize that entrepreneurship is the key to building and sustaining their economies' growth. Although this is a seemingly obvious proposition, it represents something of a departure from past thinking about how local, state, or regional economies grow. Historically, state and local policymakers have put their energies into trying to attract existing firms from somewhere else, …
Homeownership Gaps Among Low-Income And Minority Households, Donald R. Haurin, Christopher E. Herbert, Stuart S. Rosenthal
Homeownership Gaps Among Low-Income And Minority Households, Donald R. Haurin, Christopher E. Herbert, Stuart S. Rosenthal
Economics - All Scholarship
Although homeownership rates currently stand at historically high levels for all segments of the U.S. population, large gaps in homeownership rates remain when comparing various groups of the population. As of the third quarter of 2006, the non-Hispanic White (hereafter, White) homeownership rate was 76 percent while African-American and Hispanic homeownership rates were below 50 percent and the Asian homeownership rate was 60 percent. The homeownership gap between African-American and White households was larger in 2006 than it was in 1990, while the homeownership gap between Hispanics and Whites was only slightly smaller in 2006 than it was in 1990. …
Measurement Error In Earnings Data In The Health And Retirement Study, Jessie Bricker, Gary V. Engelhardt
Measurement Error In Earnings Data In The Health And Retirement Study, Jessie Bricker, Gary V. Engelhardt
Economics - All Scholarship
We provide new evidence on the extent of measurement error in respondent-reported earnings data by exploiting detailed W-2 records matched to older workers in the Health and Retirement Study (HRS). Our empirical findings are qualitatively consistent with the findings of previous studies. Mean measurement error in the 1991 HRS earnings data for men is somewhat larger than what has been found in other validation studies, but is still modest, averaging about 0.059 log points, approximately 5.9 percent, or $1,500. For women in 1991, it is 0.067 log points, approximately 6.7 percent, or $916. We find a negative correlation between the …
Bandwidth Selection And The Estimation Of Treatment Effects With Unbalanced Data, Jose Galdo, Jeffrey A. Smith, Dan Black
Bandwidth Selection And The Estimation Of Treatment Effects With Unbalanced Data, Jose Galdo, Jeffrey A. Smith, Dan Black
Economics - All Scholarship
This paper addresses the selection of smoothing parameters for estimating the average treatment effect on the treated using matching methods. Because precise estimation of the expected counterfactual is particularly important in regions containing the mass of the treated units, we define and implement weighted cross-validation approaches that improve over conventional methods by considering the location of the treated units in the selection of the smoothing parameters. We also implement a locally varying bandwidth method that uses larger bandwidths in areas where the mass of the treated units is located. A Monte Carlo study compares our proposed methods to the conventional …
Pinning Down The Value Of Statistical Life, Thomas J. Kniesner, W. Kip Viscusi, Christopher Woock, James P. Ziliak
Pinning Down The Value Of Statistical Life, Thomas J. Kniesner, W. Kip Viscusi, Christopher Woock, James P. Ziliak
Economics - All Scholarship
Our research addresses fundamental long - standing concerns in the compensating wage differentials literature and its public policy implications: the econometric properties of estimates of the value of statistical life (VSL) and the wide range of such estimates from about $0.5 million to about $21 million. We address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic selection of panel estimator in our research. Controlling for measurement error, endogeneity, individual heterogeneity, and state dependence yields both a reasonable average level and narrow range for the estimated value of a …
A Monte Carlo Study Of Efficiency Estimates From Frontier Models, William C. Horrace, Seth Richards
A Monte Carlo Study Of Efficiency Estimates From Frontier Models, William C. Horrace, Seth Richards
Economics - All Scholarship
Parametric stochastic frontier models yield firm-level conditional distributions of inefficiency that are truncated normal. Given these distributions, how should one assess and rank firm-level efficiency? This study compares the techniques of estimating a) the conditional mean of inefficiency and b) probabilities that firms are most or least efficient. Monte Carlo experiments suggest that the efficiency probabilities are more reliable in terms of mean absolute percent error when inefficiency has large variation across firms. Along the way we tackle some interesting problems associated with simulating and assessing estimator performance in the stochastic frontier environment.
Informality And Productivity In The Labor Market: Peru 1986 - 2001, Alberto Chong, Jose Galdo, Jaime Saavedra-Chanduvi
Informality And Productivity In The Labor Market: Peru 1986 - 2001, Alberto Chong, Jose Galdo, Jaime Saavedra-Chanduvi
Economics - All Scholarship
Peru has one of the highest informality rates in Latin America, with almost 60 percent of the urban labor force working at the margins of labor market legislation or in microenterprises that lack basic labor market standards (Marcouiller, Ruiz de Castilla, and Woodruff, 1997). This paper identifies two factors that can explain the variation in informality rates in the 1990s. First, Peru experienced a steady increase in employment allocation in traditionally “informal” sectors—in particular, retail trade and transport. Second, there was a sharp increase in nonwage labor costs, despite a reduction in the average productivity of the economy. In addition, …
Understanding Declining Mobility And Interhousehold Transfers Among East African Pasoralists, Marieke Huysentruyt, Christopher B. Barrett, John G. Mcpeak
Understanding Declining Mobility And Interhousehold Transfers Among East African Pasoralists, Marieke Huysentruyt, Christopher B. Barrett, John G. Mcpeak
Economics - All Scholarship
We model interhousehold transfers between nomadic livestock herders as the state-dependent consequence of individuals' strategic interdependence resulting from the existence of multiple, opposing externalities. A public good security externality among individuals sharing a social (e.g., ethnic) identity in a potentially hostile environment creates incentives to band together. Self-interested interhousehold wealth transfers from wealthier herders to poorer ones may emerge endogenously within a limited wealth space as a means to motivate accompanying migration by the recipient. The distributional reach and size of the transfer are limited, however, by a resource appropriation externality related to the use of common property grazing lands. …
Offshoring And Unemployment, Devashish Mitra, Priya Ranjan
Offshoring And Unemployment, Devashish Mitra, Priya Ranjan
Economics - All Scholarship
In this paper, in order to study the impact of offshoring on sectoral and economywide rates of unemployment, we construct a two sector general equilibrium model in which labor is mobile across the two sectors, and unemployment is caused by search frictions. We find that, contrary to general perception, wage increases and sectoral unemployment decreases due to offshoring. This result can be understood to arise from the productivity enhancing (cost reducing) effect of offshoring. If the search cost is identical in the two sectors, or even if the search cost is higher in the sector which experiences offshoring, the economywide …
Temporary Shocks And Offshoring: The Role Of External Economies And Firm Heterogeneity, Devashish Mitra, Priya Ranjan
Temporary Shocks And Offshoring: The Role Of External Economies And Firm Heterogeneity, Devashish Mitra, Priya Ranjan
Economics - All Scholarship
We construct a model of offshoring with externalities and firm heterogeneity. Due to the presence of externalities, temporary shocks like the Y2K problem can have permanent effects, i.e., they can permanently raise the extent of offshoring in an industry. Also, the initial advantage of a country as a potential host for outsourcing activities can create a lock in effect, whereby late movers have a comparative disadvantage. Furthermore, the existence of firm heterogeneity along with externalities can help explain the dynamic process of offshoring, where the most productive firms offshore first and the others follow later. Finally, we work out some …
Indian Manufacturing: A Slow Sector In A Rapidly Growing Economy, Devashish Mitra, Beyza P. Ural
Indian Manufacturing: A Slow Sector In A Rapidly Growing Economy, Devashish Mitra, Beyza P. Ural
Economics - All Scholarship
This paper investigates the determinants of productivity in Indian manufacturing industries during the period 1988-2000. Using two-digit industry level data for the Indian states, we find evidence of imperfect interindustry and interstate labor mobility as well as misallocation of resources across industries and states. Trade liberalization increases productivity in all industries across all states, and productivity is higher in the less protected industries. These effects of protection and trade liberalization are more pronounced in states that have relatively more flexible labor markets. Similar effects are also found in the case of employment, capital stock and investment. Furthermore, labor market flexibility, …
Secondary Markets, Risk, And Access To Credit Evidence From The Mortgage Market, Stuart S. Rosenthal, Stuart A. Gabriel
Secondary Markets, Risk, And Access To Credit Evidence From The Mortgage Market, Stuart S. Rosenthal, Stuart A. Gabriel
Economics - All Scholarship
Secondary markets for credit are widely believed to improve efficiency and increase access to credit. In part, this is because of their greater ability to manage risk. However, the degree to which secondary markets expand access to credit is virtually unknown. Using the mortgage market as an example, we begin to fill that gap. Our conceptual model suggests that secondary credit markets have potentially ambiguous effects on interest rates, but unambiguous positive effects on the number of loans issued. We focus our empirical analysis on the latter using 1992-2004 HMDA files for conventional, conforming, home purchase loans in conjunction with …
Inequality And The Instability Of Polity And Policy, Pushan Dutt, Devashish Mitra
Inequality And The Instability Of Polity And Policy, Pushan Dutt, Devashish Mitra
Economics - All Scholarship
In this paper, we create alternative measures of political instability, which capture movements only from dictatorship to democracy and vice versa (consistent with the recent theoretical work by Acemoglu and Robinson) but, unlike older, well known measures do not capture government changes that preserve the democratic or dictatorial structure of the country. Our empirical work clearly shows that inequality is positively correlated with our measures of political instability as well as with a well-known measure (used by Alesina and Perotti), but the impact of inequality on the latter is only through components of political instability as captured in our measures. …
Survive Then Thrive: Talent, Research Motivation, And Completing The Economics Ph.D., Wayne A. Grove, Donald H. Dutkowsky, Andrew Grodner
Survive Then Thrive: Talent, Research Motivation, And Completing The Economics Ph.D., Wayne A. Grove, Donald H. Dutkowsky, Andrew Grodner
Economics - All Scholarship
This study investigates the completion of the Ph.D. in Economics. We use ex ante information, based solely upon reviewing a set of individual applications from former doctoral students. Estimation for determining success is done by logit, multinomial logit, and generalized ordered logit. We find that students need different skills and attributes to succeed at each distinct and sequential stage of the doctoral program. Significant determinants for passing the comprehensive exams include high GRE verbal and quantitative scores, a Masters degree, and a prior focus on economics. Research motivation and math preparation play significant roles in completing the dissertation, but having …
Estimating Heterogeneous Capacity And Capacity Utilization In A Multi-Species Fishery, Ronald G. Felthoven, William C. Horrace, Kurt E. Schnier
Estimating Heterogeneous Capacity And Capacity Utilization In A Multi-Species Fishery, Ronald G. Felthoven, William C. Horrace, Kurt E. Schnier
Economics - All Scholarship
We use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multi-species fishery. Furthermore, we propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between each vessel-specific technical efficiency distribution. Results indicate that ignoring heterogeneity in production technologies within a multi-species fishery, as well as the complete distribution of a vessel’s technical efficiency score, may yield erroneous fleet-wide production profiles and estimates of capacity. Furthermore, our new estimate of capacity enables out-of-sample production predictions predicated on either homogeneity or heterogeneity modeling …
Labor Supply With Social Interactions: Econometric Estimates And Their Tax Policy Implications, Andrew Grodner, Thomas J. Kniesner
Labor Supply With Social Interactions: Econometric Estimates And Their Tax Policy Implications, Andrew Grodner, Thomas J. Kniesner
Economics - All Scholarship
Our research fleshes out econometric details of examining possible social interactions in labor supply. We look for a response of a person's hours worked to hours worked in the labor market reference group, which includes those with similar age, family structure, and location. We identify endogenous spillovers by instrumenting average hours worked in the reference group with hours worked in neighboring reference groups. Estimates of the canonical labor supply model indicate positive economically important spillovers for adult men. The estimated total wage elasticity of labor supply is 0.22, where 0.08 is the exogenous wage change effect and 0.14 is the …
Does The Quality Of Training Programs Matter? Evidence From Bidding Processes Data, Alberto Chong, Jose Galdo
Does The Quality Of Training Programs Matter? Evidence From Bidding Processes Data, Alberto Chong, Jose Galdo
Economics - All Scholarship
We estimate the effect of training quality on earnings using a Peruvian program, which targets disadvantaged youths. The identification of causal effects is possible because of two attractive features in the data. First, selection of training courses is based on public bidding processes that assign standardized scores to multiple proxies for quality. Second, the evaluation framework allows for the identification and comparison of individuals in treatment and comparison groups six, 12, and 18 months after the program. Using difference-indifferences kernel matching methods, we find that individuals attending high-quality training courses have higher average and marginal treatment impacts. External validity was …
Identifying Technically Efficient Fishing Vessels: A Non-Empty, Minimal Subset Approach, William C. Horrace, Kurt E. Schnier, Alfonso Flores-Lagunes
Identifying Technically Efficient Fishing Vessels: A Non-Empty, Minimal Subset Approach, William C. Horrace, Kurt E. Schnier, Alfonso Flores-Lagunes
Economics - All Scholarship
There is a growing resource economics literature, concerning the estimation of the technical efficiency of fishing vessels utilizing the stochastic frontier model. In these models, vessel output is regressed on a linear function of vessel inputs and a random composed error. Using parametric assumptions on the regression residual, estimates of vessel technical efficiency are calculated as the mean of a truncated normal distribution and are often reported in a rank statistic as a measure of a captain’s skill and used to estimate excess capacity within fisheries. We demonstrate analytically that these measures are potentially flawed, and extend the results of …
Estimating Heterogeneous Production In Fisheries, Kurt E. Schnier, Christopher M. Anderson, William C. Horrace
Estimating Heterogeneous Production In Fisheries, Kurt E. Schnier, Christopher M. Anderson, William C. Horrace
Economics - All Scholarship
Stochastic production frontier models are used extensively in the agricultural and resource economics literature to estimate production functions and technical efficiency, as well as to guide policy. Traditionally these models assume that each agent’s production can be specified as a representative, homogeneous function. This paper proposes the synthesis of a latent class regression and an agricultural production frontier model to estimate technical efficiency while allowing for the possibility of production heterogeneity. We use this model to estimate a latent class production function and efficiency measures for vessels in the Northeast Atlantic herring fishery. Our results suggest that traditional measures of …
Inter-Industry Gender Wage Gaps By Knowledge Intensity: Discrimination And Technology In Korea, William C. Horrace, Beyza P. Ural, Jin Hwa Jung
Inter-Industry Gender Wage Gaps By Knowledge Intensity: Discrimination And Technology In Korea, William C. Horrace, Beyza P. Ural, Jin Hwa Jung
Economics - All Scholarship
A new gender wage gap decomposition methodology is introduced that does not suffer from the identification problem caused by unobserved non-discriminatory wage structure. The methodology is used to measure the relative size of Korean gender wage gaps from 1994 to 2000 across industries, differentiated by industrial knowledge intensity, where knowledge intensity is the extent to which industries produce or employ high-technology products. Korea represents an important case study, since it possesses one of the fastest growing knowledge-intensive economies, among industrialized countries. Empirical results indicate that over this period, discrimination (the unexplained portion of the gender wage gaps) in Korea was …