Economics Commons^™

Equal Quantile Order For Two-Stage Quantile Regression For Dynamic Panel Data Models: Monte-Carlo Simulation Study, Hossameldin Ahmed, Aya Afify Ms, Alaa Ibrahim Prof

Economics

No abstract provided.

Are Choice Experiment Treatments Of Outcome Uncertainty Sufficient? An Application To Climate Risk Reductions, Christos Makriyannis, Robert J. Johnston, Adam W. Whelchel

Economics

Choice experiments addressing outcome uncertainty (OU) typically reframe continuous probability densities for each risky outcome into two discrete categories, each with a single probability of occurrence. The implications of this simplification for welfare estimation are unknown. This article evaluates the convergent validity of willingness-to-pay (WTP) estimates from a more accurate multiple-outcome treatment of OU, compared to the two-outcome approach. Results for a case study of coastal flood adaptation in Connecticut, United States, suggest that higher-resolution OU treatments increase choice complexity but can provide additional information on risk preferences and WTP. This tradeoff highlights challenges facing the valuation of uncertain outcomes.

The Rapid Evolution Of Homo Economicus: Brief Exposure To Neoclassical Assumptions Increases Self-Interested Behavior, John Ifcher, Homa Zarghamee

Economics

Economics students have been shown to exhibit more selfishness than other students. Because the literature identifies the impact of long-term exposure to economics instruction (e.g., taking a course), it cannot isolate the specific course content responsible; nor can selection, peer effects, or other confounds be properly controlled for. In a laboratory experiment, we use a within- and across-subject design to identify the impact of brief, randomly-assigned economics lessons on behavior in the ultimatum game (UG), dictator game (DG), prisoner's dilemma (PD), and public-goods game (PGG). We find that a brief lesson that includes the assumptions of self-interest and strategic considerations …

A Closer Look At The Determinants Of International Migration: Decomposing Cultural Distance, Roger White

Economics

Using a modified gravity model and three measures of cultural distance, we employ the zeroinflated negative binomial estimation technique to examine the impact of cultural distance on international migration flows. We confirm the finding of prior studies that there exists a negative relationship between composite measures of cultural distance and immigrant flows. Extending the literature, we decompose our composite cultural distance measures into their component dimensions to examine potential variability in the influences of individual dimensions on international migration. We find the cultural dimensions that reflect individualism, uncertainty avoidance, and perceived gender roles are typically more influential in determining immigrant …

Income Distribution, Fertility Behavior And Demographic Transition In Egypt, Sarah El-Khishin

Economics

Abstract - Demographic-economic interrelationships have been broadly examined in the literature from a macro perspective using mostly cross-country panel regressions. A limited strand of literature has emphasized the need to examine the demographic-economic dynamics in a reversed way; inspect dual-causality relation between demographic and economic factors. In this paper, I examine the effect of changes in income distribution and fertility behavior on the speed of demographic transition. I moreover examine the reverse relation by testing effect of changed household structure on income distribution and income disparities in Egypt. Empirical results show that wealth redistribution in Egypt and moving up to …

The Great Recession And Life Satisfaction: The Unique Decline For Americans Approaching Retirement Age, John Ifcher, Homa Zarghamee, Amanda Cabacungan

Economics

During the 2007-09 Great Recession, the American economic environment was bleak: unemployment roughly doubled, median household incomes fell 5 per cent, average household net worth declined by a third, and consumer spending dropped markedly. Each month, the Bureau of Labor Statistics reported massive lay-offs, disappointing job creation numbers, and a dismal outlook for future job growth. The literature studying the impact of the Great Recession on American households finds that those nearing retirement age were particularly hard hit. For example, using data from the American Life Panel, Hurd and Rohwedder (2010) find that 25 per cent of respondents aged 50-59 …

Benefit Relevant Indicators: Ecosystem Services Measures That Link Ecological And Social Outcomes, Lydia P. Olander, Robert J. Johnston, Heather Tallis, James Kagan, Lynn A. Maguire, Stephen Polasky, Dean Urban, James Boyd, Lisa Wainger, Margaret Palmer

Economics

There is a growing movement in government, environmental non-governmental organizations and the private sector to include ecosystem services in decision making. Adding ecosystem services into assessments implies measuring how much a change in ecological conditions affects people, social benefit, or value to society. Despite consensus around the general merit of accounting for ecosystem services, systematic guidance on what to measure and how is lacking. Current ecosystem services assessments often resort to biophysical proxies (e.g., area of wetland in a floodplain) or even disregard services that seem difficult to measure. Valuation, an important tool for assessing trade-offs and comparing outcomes, is …

The Dynamic Interrelationship Between Interest Rate And Macroeconomic Policy Objectives: Case Of The United Kingdom, Mostafa Aboelsoud, Dimitrios Paparas, Azzouz Zouaoui, Mustafa Kasim

Economics

The objective of this study is to provide empirical evidence on the short- and long-run relationships between the short-term interest rate, London interbank offered rate (LIBOR) and macroeconomic policy objectives, such as price stability, economic growth, and stability of the exchange rate market. For this purpose, we deploy quarterly frequency data from the United Kingdom between 2000 and 2015 and adopt a multiple regression model.

Furthermore, this study uses the Johansen, Stock-Watson cointegration test and the Granger Causality test in order to examine the dynamic short- and long-run relationships among LIBOR, the consumer price index as a proxy of price …

A Micro-Invstigation Of The Reasons Behind Demographic Transition In Egypt: Will Egypt Witness A Demographic Window?, Sarah El-Khishin, Magued Osman, Heba Nassar

Economics

Abstract: The paper investigates the factors behind the slowdown in demographic transition in Egypt across different geographical and socio-economic groups. The authors relax the assumption of a uniform fertility behavior across households and re-visit interrelationships between demography and economic indicators from a micro perspective. Empirical findings reject mainstream beliefs that slow demographic transition in Egypt is attributed to the poorer, south-located and less-educated households. Fertility behaviors in Urban Egypt and among the high-educated females are found to be key contributors to the slowdown of demographic transition. Unemployment among the high-educated females in addition to lower public and foreign spending on …

Local Neighbors As Positives, Regional Neighbors As Negatives: Competing Channels In The Relationship Between Others’ Income, Health, And Happiness, John Ifcher, Homa Zarghamee, Carol Graham

Economics

That well-being is decreasing in others’ income is termed the “relative income hypothesis” (RIH) by scholars of subjective well-being (SWB) and has substantial empirical support. Some studies, however, present evidence of both positive and negative explanatory channels in the relationship between others’ income and SWB. We develop a theoretical framework integrating four distinct channels through which neighbors’ income can affect utility: public goods, cost of living, expectations of future income, and direct effects (RIH or altruism). We estimate the relationship with SWB data from the U.S. Gallup-Healthways Well-Being Index and median-income data from the American Community Survey for ZIP codes …

Effects Of New Grocery Store Development On Inner-City Neighborhood Residential Prices, Belkis Cerrato Caceres, Jacqueline Geoghegan

Economics

A difference-in-differences approach is used to measure the impact of new inner-city grocery store developments on residential housing values in Worcester, Massachusetts. Using geocoded housing sales from 1988-2011, we develop a hedonic model, exploiting temporal and spatial discontinuities, to identify the effect of 12 new grocery stores on neighborhood housing prices. Results suggest these new stores were associated with an increase in sale prices of nearby homes, and these results could help inform current policies related to urban food deserts, in that new grocery stores have the potential to improve neighborhood wealth as well as health.

Does China’S Trade Defy Cultural Barriers?, Roger White, Bedassa Tadesse, Huang Zhongwen

Economics

Using annual data for China and 88 trading partners that span the period 1995–2011, we estimate whether cross-societal cultural differences influence China’s external trade flows. Our results, obtained from the estimation of a series of multi-level mixed effect random intercepts and coefficients models, indicate that China’s aggregate exports and imports are largely unaffected by the cultural distance between China and its trading partners. Examination of disaggregate trade measures and consideration of the underlying dimensions of our composite cultural distance variable produces a largely similar result. Taken collectively, our results suggest that China’s trade is less affected by cultural distance than …

International Reserves And Global Interest Rates, Gonçalo Pina

Economics

In this paper we study the relationship between foreign currency international reserve holdings and global interest rates. To guide empirical work we solve a simple, small open-economy model with money, where the central bank manages international reserves to smooth inflation over time. This model shows that changes in interest rates are positively related to the target level of reserves. As a consequence interest rate hikes increase reserve transfers, defined as the change in international reserves net of the interest earned on reserves. Using quarterly data for 75 countries between 2000 and 2013, we document a positive relationship between interest-rate changes …

Immigrants, Cultural Distance, And Trade Costs, Roger White, Bedassa Tadesse

Economics

We examine the effects of immigrants and cross-societal cultural differences on bilateral trade costs using two alternative measures of cultural differences (i.e. cultural distance and genetic distance). We find that bilateral trade costs generally increase with a rise in the cultural distance between trading partners but fall with a rise in the stock of immigrants. This implies that immigrants counter bilateral trade costs that are associated with greater cultural differences. Our observation is relevant from both migration and trade policy perspectives as it provides further evidence that immigrants serve as conduits for bridging cultural differences, facilitate international transactions, and enhance …

Multidimensional Poverty Among The Native- And Foreign-Born In The United States: Evidence From The 2010-2014 American Community Surveys, Roger White, Stacy Yamasaki

Economics

We examine data from the 2010-2014 American Community Survey 5-year Public Use Microdata Sample files (U.S. Census, 2016) and employ the methodology of Alkire and Foster (2009) to measure multidimensional poverty in the United States. While our findings confirm the results of earlier studies, we also report considerable variation across native- and foreign-born residents of the U.S. and across immigrant home countries in terms of the incidence and intensity of deprivation and, thus, in Multidimensional Poverty Index values. Our econometric analysis identifies several factors that contribute to multidimensional poverty and, again, we examine variation in the determinants across both native- …

Studying The Effect Of Corruption On Income Per-Capita Level In An Iv Estimation In Developing Countries, Hoda Hassaballa

Economics

Income per-capita is a measure of economic well-being. Through its effect on economic development, it can indirectly affect sustainable development. Hence, it is essential to study the determinants of Income per-capita Level. Recently, corruption level has played an influential role in determining income per-capita. However, theoretically and empirically its effect is still debatable. Besides the traditional determinants of income per-capita, the effect of corruption on Income percapita level is examined in a sample of developing countries between1996-2013. There is a potential endogeneity problem that arises from the two way relationship between corruption and income per capita levels which threatens internal …

The Impact Of Efficiency On Islamic Banks’ Performance: A Cross-Country Study, Fatma Ahmed, Khaled Hussainey, Elsayeda Ismail

Economics

This paper contributes to Islamic finance literature by offering large-scale evidence on the impact of efficiency on the performance of Islamic banks all over the world. Our initial sample includes all Islamic banks around the world. Using a sample of 151 Islamic Banks with financial years ending within the period January 2013 and December 2013, we examine, controlling for Bank-specific characteristics and country-specific characteristics, whether high efficiency leads to more profitability in Islamic Banks. We define higher efficiency as the lower Cost-to-income ratio. We find that higher levels of Islamic banks’ efficiency banks (i.e. lower Cost-to-income ratio) are positively associated …

The Saving & Loan Insolvencies And The Costs Of Financial Crisis, Alexander J. Field

Economics

At the time they occurred, the savings and loan insolvencies were considered the worst financial crisis since the Great Depression. Contrary to what was then believed, and in sharp contrast with 2007–2009, they in fact had little macroeconomic significance. Savings and Loan (S&L) remediation cost between 2 percent and 3 percent of Gross Domestic Product (GDP), whereas the Troubled Asset Relief Program (TARP) and the conservatorships of Fannie and Freddie actually made money for the US Treasury. But the direct cost of government remediation is largely irrelevant in judging macro significance. What matters is the cumulative output loss associated with …

California Water Reallocation: Where'd You Get That?, Damian Park

Economics

When thirsty, Californians often avoid going to the market for more water. Instead, they might borrow some from their rich neighbors, they might sue them or more commonly, they simply take more from users without much of a voice (e.g. the fish or future generations). These alternatives are often superior to using markets. Within markets, a surprising detail emerges – it is uncommon for farmers to fallow fields in order to sell water to another user. Rather, many water transfers are structured so sellers can have their cake and eat it too. While some of these transfers rightly bring about …

Pegxit Pressure: Evidence From The Classical Gold Standard, Kris James Mitchener, Gonçalo Pina

Economics

We develop a simple model that highlights the costs and benefits of fixed exchange rates as they relate to trade, and show that negative export-price shocks reduce fiscal revenue and increase the likelihood of an expected currency devaluation. Using a new high-frequency data set on commodity-price movements from the classical gold standard era, we then show that the model’s main prediction holds even for the canonical example of hard pegs. We identify a negative causal relationship between export-price shocks and currency-risk premia in emerging market economies, indicating that negative export-price shocks increased the probability that countries abandoned their pegs.

Pricing Competition: A New Laboratory Measure Of Gender Differences In The Willingness To Compete, John Ifcher, Homa Zarghamee

Economics

Experiments have demonstrated that men are more willing to compete than women. We develop a new instrument to “price” willingness to compete. We find that men value a $2.00 winner-take-all payment significantly more (about $0.28 more) than women; and that women require a premium (about 40 %) to compete. Our new instrument is more sensitive than the traditional binary-choice instrument, and thus, enables us to identify relationships that are not identifiable using the traditional binary-choice instrument. We find that subjects who are the most willing to compete have high ability, higher GPA’s (men), and take more STEM courses (women).

The Increasing Happiness Of Us Parents, Chris M. Herbst, John Ifcher

Economics

Previous research suggests that parents may be less happy than non-parents. We critically assess the literature and examine parents’ and non-parents’ happiness-trends using the General Social Survey (N = 42,298) and DDB Lifestyle Survey (N = 75,237). We find that parents are becoming happier over time relative to non-parents, that non-parents’ happiness is declining absolutely, and that estimates of the parental happiness gap are sensitive to the time-period analyzed. These results are consistent across two datasets, most subgroups, and various specifications. Finally, we present evidence that suggests children appear to protect parents against social and economic forces that may be …

The Earned Income Tax Credit, Mental Health, And Happiness, Casey Boyd-Swan, Chris M. Herbst, John Ifcher, Homa Zarghamee

Economics

We study the impact of the earned income tax credit (EITC) on various measures of subjective well-being (SWB) using the National Survey of Families and Households (NSFH) to estimate intent-to-treat effects of the EITC expansion embedded in the 1990 Omnibus Budget Reconciliation Act. We use a difference-in-differences framework that compares the pre-and post-expansion SWB-changes of women likely eligible for the EITC (low-skilled mothers of working age) to the SWB-changes of a comparison group that is likely ineligible (low-skilled, childless women of working age). Our results suggest that the EITC expansion generated sizeable SWB-improvements in the three major categories of SWB …

Effectiveness Of Beer Keg Registration Law On Decreasing Underage Binge Drinking, Zana Beck

Economics

Since the prohibition act of 1919, alcohol has always had high economic costs and benefits. While it increases revenues for the Federal Government through taxation and company profits, there are, unfortunately, several costs that impact society. These costs, also known as negative externalities, include a variety of actions like alcohol related traffic accidents, increased crime, and excessive binge drinking. A negative externality is described as “a cost that is suffered by a third party as a result of an economic transaction,” in which the third party is indirectly affected (MaClean, 2013). In the case of alcohol, society is the third …

Do Gender-Variant Preferences For Competition Persist In The Absence Of Performance?, John Ifcher, Homa Zarghamee

Economics

The well-established gender gap in preferences for competition has been attributed to gender-variant feelings about performing in competitive environments. Using a novel task with agency, in which subjects experience competition but cannot perform, we find evidence that performing may be sufficient but not necessary to generate gender-variant preferences for competition. This suggests that the gender-gap cannot be eliminated by correcting beliefs alone; that eliminating performance—for example, routinizing tasks—may not eliminate the gender gap; and that there may be heretofore unidentified determinants of preferences for competition—for example, men may prefer payment schemes that are based on social comparison. (JEL J16, C91, …

Do Immigrants Affect The Profiles Of Us Exporters?, Roger White, Bedassa Tadesse

Economics

We highlight that an increase in the stock of immigrants corresponds with greater numbers of U.S. firms that engage in exporting to foreign markets. Our results are obtained from the estimation of a multi-level mixed effects model. Overall, the effect of immigrants is relatively larger among small- and medium-sized enterprises and is smaller among large-sized enterprises. There are, however, considerable differences, both in the magnitude and in nature of the observed effects of immigrants on manufactured and non-manufactured goods exporters of comparable size categories. Similarly, heterogeneity is found in the effects of immigrants on the numbers of small-, medium-, and …

Inequality Of Happiness: Evidence Of The Compression Of The Subjective-Well-Being Distribution With Economic Growth, John Ifcher, Homa Zarghamee

Economics

The use of Subjective Wellbeing (SWB) measures in economics research has grown markedly (Kahneman and Krueger 2006). This has come about for at least two reasons. First, the measures have been systematically validated as reliable for examining a range of questions. Second, economists have long relied on income as a proxy for wellbeing. However, research shows that there are potentially large slippages between economic indicators and wellbeing (Diener and Seligman 2004). Thus, SWB measures have become an important alternative proxy for wellbeing. Indeed, SWB measures have also caught the attention of policy makers. The OECD launched the Better Life Index …

A Culture Shaped By Immigrants: Examining The Consequences Of U.S. Immigration Policy, Roger White, Shane Francis

Economics

We examine U.S. immigration history both by recounting the related legislative history and by examining data on immigrant inflows and inflow shares during the period from 1820 through 2013. A descriptive analysis of the cultural differences between the U.S. and several cohorts of countries suggests that U.S. culture has been shaped by the pattern of immigrant arrivals. Broadly stated, American culture has evolved to be similar to those of European societies (predominantly, countries in Northern and Western Europe) and to largely be dissimilar to the cultures of other regions. Following the enactment of the Hart-Celler Act in 1968, the primary …

The Impact Of Oil Sector On The Global Competitiveness Of Gcc Countries: Panel Data Approach, Anas Alqudah, Ahmed Badawi, Mostafa Aboelsoud

Economics

This study explores the impact of oil sector on the global competitiveness of the GCC states in a panel data framework for the period from 2006 to 2014. The focus is placed on how the non-traditional factors; oil rents, fuel exports as a percentage of merchandise exports, oil prices, and mining sector production impact on the global competitiveness of the GCC nations.

The study uses panel data techniques to measure the effect of the oil sector’s impact on of global competitiveness of the GCC countries. The results of the regression show that the relation between rent and GCI found to …

Altruism, Alexander J. Field

Economics

Altruism is reflected in actions by one individual that benefit another, even when there is no expectation of reward. Altruism is often equated with selflessness and contrasted with selfishness, or alternatively, altruism is seen as other-regarding as opposed to self-regarding behavior. The latter usage is sometimes preferred because of difficulties in classifying behavior for which the individual acting altruistically receives a "warm glow" from helping others. The question raised in this instance is whether such an individual is actually selfish and, if so, whether there is any behavior that, after the fact, could not be interpreted as selfish.

The need …