Economics Commons^™

The Elasticity Of Taxable Income During The 1990s: New Estimates And Sensitivity Analyses, Seth H. Giertz

Department of Economics: Faculty Publications

Over the past two decades, the elasticity of taxable income has emerged as the central parameter for assessing efficiency and revenue implications from changes to tax policy. This article estimates short- and longer-run responses of taxable (and gross) income to changes in tax rates using panels of U.S. tax returns for the 1990s. With the richest set of income controls, income-weighted elasticity estimates range from 0.19 to 0.33, depending on whether responses are measured over one- or three-year intervals. An alternative approach designed to capture delayed and anticipatory responses yields much larger estimates -- ranging from 0.43 over the short …

Border Metropolitan Water Forecast Accuracy, Thomas M. Fullerton Jr., Angel L. Molina Jr.

Border Region Modeling Project

Municipal water consumption planning is an active area of research due to infrastructure construction and maintenance costs, supply constraints, and water quality assurance. In spite of that, relatively few water forecast accuracy assessments have been completed to date, although some internal documentation may exist as part of the proprietary “grey literature.” This study utilizes a data set of previously published municipal consumption forecasts to partially fill that gap in the empirical water economics literature. Previously published municipal water econometric forecasts for three public utilities are examined for predictive accuracy against two random walk benchmarks commonly used in regional analyses. Descriptive …

Mexico Consensus Economic Forecast, Thomas M. Fullerton Jr., Teodulo Soto

Border Region Modeling Project

No abstract provided.

Unlv / Brookings West: Intermountain West Region Regional Survey, University Of Nevada Las Vegas, Brookings Institute

Brookings Mountain West Publications

The 2010 Intermountain West Public Opinion Survey documents responses from 2,000 residents of the Intermountain West (Arizona, Colorado, Idaho, Nevada, New Mexico, and Utah). Gerstein | Agne Strategic Communications conducted the survey from August 23 – September 1, 2010. A minimum of 250 respondents for each state are included in the results for this survey. Respondents included 1,700 landline interviews and 300 cell phone interviews. Gerstein | Agne Strategic Communications provides strategic planning, communications, project management, and research services to a wide range of non-profit organizations, Fortune 500 companies, and candidates for elected office.

The survey includes an extensive series …

Put Your Money Where Your Butt Is: A Commitment Contract For Smoking Cessation, Xavier Giné, Dean Karlan, Jonathan Zinman

Dartmouth Scholarship

We designed and tested a voluntary commitment product to help smokers quit smoking. The product (CARES) offered smokers a savings account in which they deposit funds for six months, after which they take a urine test for nicotine and cotinine. If they pass, their money is returned; otherwise, their money is forfeited to charity. Of smokers offered CARES, 11 percent took up, and smokers randomly offered CARES were 3 percentage points more likely to pass the 6-month test than the control group. More importantly, this effect persisted in surprise tests at 12 months, indicating that CARES produced lasting smoking cessation. …

The Incompatibility Of Dependence And Development: A Critical Analysis Of International Development Efforts In The Nicaraguan Context, Molly Dunton

Independent Study Project (ISP) Collection

Countries in the Global South have been receiving billions of dollars annually in humanitarian and development aid for the past half-century. But they still remain poor, marginalized, and on the periphery in spite of this massive influx of money into the region. Many would argue that this very aid is in fact working to maintain the economic hierarchies responsible for their poverty. Through the lens of Dependency Theory, I analyze this apparent failure of the International Development Industry in the context of Nicaragua. After researching what was working and what wasn’t in Nicaraguan rural development, I was able to categorize …

Justice Sector Reform In Rwanda: A Space Of Contention Or Consensus?, Maria Sebastian

Independent Study Project (ISP) Collection

Justice sector reform is an arena of competition, where international development partners and Rwandan government institutions introduce contending ideas of justice through different development projects. In this ensuing competition of influence, how do international players utilize their roles as development partners to affect the accepted standards within Rwandan courts through established systems of monitoring and evaluation? And moreover, how do individuals in the Rwandan government perceive these partners, projects, and indicators? This study aims to answer these questions through an in-depth literature review, an analysis of development projects in the justice sector, and finally semi-structured interviews with key individuals in …

Can Bilateral Free Trade Agreements Be A Catalyst For Widespread Economic Change: Analyzing The Successes And Failures Of The Us-Omani Fta, Demic Eugene Tipitino

Independent Study Project (ISP) Collection

Diversification, a buzzword in the Middle East for much of the past two decades can only be likened to the phrase “dependence on foreign oil” used by American politicians during US elections. And indeed much like the latter has been mentioned by every president since Richard Nixon, it seems as if diversification is being sung in a round by kings presidents and sultans throughout the oil producing nations of the world, but still to no avail. Oman has been trumpeting diversification in five-year plan after five-year plan of which they are currently in their seventh (2006 - 2010) with an …

From Workforce Research To Workforce Policy, Stephen A. Wandner

Employment Research Newsletter

No abstract provided.

Cost-Benefit Analysis Of Greening An Older Modest-Sized Home, Delilah Zoe Leval

Master's Theses

This professional project estimates the upfront costs and utility savings expected from greening an approximately 1,100 square foot home built in the 1950s in the San Francisco Bay Area. Two sets of upgrades (alternative and original) were compared for costs and benefits. The alternative set (which included ceiling insulation and omitted upgrading to dual-pane windows) clearly out performed the original set. The alternative set would be expected to reduce resident utility bills by 28% annually, and to prevent approximately 2,700 lbs of carbon dioxide emissions annually. The water efficiency upgrades were the best performing group of upgrades, as they had …

International Capital Flows And Aggregate Output, Jurgen Von Hagen, Haiping Zhang

Research Collection School Of Economics

We develop a tractable multi-country overlapping-generations model and show that cross-country differences in financial development explain three recent empirical patterns of international capital flows. Domestic financial frictions in our model distort interest rates and aggregate output in the less financially developed countries. International capital flows help ameliorate the two distortions. International flows of financial capital and foreign direct investment affect aggregate output in each country directly through affecting the size of aggregate investment. In addition, they affect aggregate output indirectly through affecting the composition of aggregate investment and the size of aggregate savings. Under certain conditions, the indirect effects may …

Estimating The Garch Diffusion: Simulated Maximum Likelihood In Continuous Time, Tore Selland Kleppe, Jun Yu, Hans J. Skaug

Research Collection School Of Economics

A new algorithm is developed to provide a simulated maximum likelihood estimation of the GARCH diffusion model of Nelson (1990) based on return data only. The method combines two accurate approximation procedures, namely, the polynomial expansion of Ait-Sahalia (2008) to approximate the transition probability density of return and volatility, and the Efficient Importance Sampler (EIS) of Richard and Zhang (2007) to integrate out the volatility. The first and second order terms in the polynomial expansion are used to generate a base-line importance density for an EIS algorithm. The higher order terms are included when evaluating the importance weights. Monte Carlo …

Bayesian Hypothesis Testing In Latent Variable Models, Yong Li, Jun Yu

Research Collection School Of Economics

Hypothesis testing using Bayes factors (BFs) is known to suffer from several problems in the context of latent variable models. The first problem is computational. Another problem is that BFs are not well defined under the improper prior. In this paper, a new Bayesian method, based on decision theory and the EM algorithm, is introduced to test a point hypothesis in latent variable models. The new statistic is a by-product of the Bayesian MCMC output and, hence, easy to compute. It is shown that the new statistic is appropriately defined under improper priors because the method employs a continuous loss …

A Conversation With Eric Ghysels, Peter C. B. Phillips, Jun Yu

Research Collection School Of Economics

Eric Ghysels is the Bernstein Distinguished Professor of Economics and Professor of Finance at University of North Carolina at Chapel Hill. In 2008, Eric Ghysels and Robert Engle (2003 Nobel co-Laureate in Economic Science with Clive Granger) founded the Society for Financial Econometrics (SoFiE), establishing a global network of academics and practitioners dedicated to the fast-growing field of financial econometrics. In June 2010, Eric visited the Centre for Financial Econometrics (CoFiE) and the Sim Kee Boon Institute (SKBI) of Financial Economics at Singapore Management University. During his visit we conversed with him about SoFiE and the growing toolroom of financial …

Bias In Estimating Multivariate And Univariate Diffusions, Xiaohu Wang, Peter C. B. Phillips, Jun Yu

Research Collection School Of Economics

Multivariate continuous time models are now widely used in economics and finance. Empirical applications typically rely on some process of discretization so that the system may be estimated with discrete data. This paper introduces a framework for discretizing linear multivariate continuous time systems that includes the commonly used Euler and trapezoidal approximations as special cases and leads to a general class of estimators for the mean reversion matrix. Asymptotic distributions and bias formulae are obtained for estimates of the mean reversion parameter. Explicit expressions are given for the discretization bias and its relationship to estimation bias in both multivariate and …

Measurement And High Finance, Peter C. B. Phillips, Jun Yu, Eric Ghysels

Research Collection School Of Economics

Turbulence in the world of banking and finance over the last two years has riveted media attention on the financial industry, exposing practices, products and risks in the industry to widespread public scrutiny. Questions continue to be asked about the management and regulation of an industry whose performance is now seen to affect the world’s financial health and its prospects as much as it does national savings and individual retirement funds.

Simulation-Based Estimation Methods For Financial Time Series Models, Jun Yu

Research Collection School Of Economics

This paper overviews some recent advances on simulatio n-based methods of estimating time series models and asset pricing models that are widely used in finance. The simulation based methods have proven to be particularly useful when the likelihood function and moments do not have tractable forms and hence the maximum likelihood method (MLE) and the generalized method of moments (GMM) are difficult to use. They can also be useful for improving the finite sample performance of the traditional methods when financial time series are highly persistent and when the quantity of interest is a highly nonlinear function of system parameters.The …

Asymptotic Distributions Of The Least Squares Estimator For Diffusion Processes, Qiankun Zhou, Jun Yu

Research Collection School Of Economics

The asymptotic distributions of the least squares estimator of the mean reversion parameter (κ) are developed in a general class of diffusion models under three sampling schemes, namely, ongspan, in-fill and the combination of long-span and in-fill. The models have an affine structure in the drift function, but allow for nonlinearity in the diffusion function. The limiting distributions are quite different under the alternative sampling schemes. In particular, the in-fill limiting distribution is non-standard and depends on the initial condition and the time span whereas the other two are Gaussian. Moreover, while the other two distributions are discontinuous at κ …

Bias-Corrected Estimation For Spatial Autocorrelation, Zhenlin Yang

Research Collection School Of Economics

The biasedness issue arising from the maximum likelihood estimation of the spatial autoregressive model (SAR) is further investigated under a broader set-up than that in Bao and Ullah (2007a). A major difficulty in analytically evaluating the expectations of ratios of quadratic forms is overcome by a simple bootstrap procedure. With that, the corrections on bias and variance of the spatial estimator can easily be made up to third-order, and once this is done, the estimators of other model parameters become nearly unbiased. Compared with the analytical approach, the new approach is much simpler, and can easily be extended to other …

Macroeconomic Effects Of Over-Investment In Housing In An Aggregative Model Of Economic Activity, Hian Teck Hoon

Research Collection School Of Economics

Is there a theoretical basis for the view that the end of a period of over-investment necessarily leads to a period of below-normal employment as the excess capital stock is run down? We study the repercussions of a false boom in housing driven by prior expectations of future housing prices not justified by fundamentals. When these expectations are corrected, the result is a precipitous drop in housing prices and, on that account alone, some drop in employment. There is also a bulge in the housing stock. In the case of a closed economy, the downward shift of the term structure …

Using Financial Econometrics To Measure Risk, Peter C. B. Phillips, Jun Yu, Eric Ghysels

Research Collection School Of Economics

No abstract provided.

Evaluating The Good: A Reply To Richardson, James K.A. Smith

University Faculty Publications and Creative Works

No abstract provided.

The "Ecclesial" Critique Of Globalization: Rethinking The Questions, James K.A. Smith

University Faculty Publications and Creative Works

No abstract provided.

A Study Of Price Evolution In Online Toy Market, Zhenlin Yang, Lydia L Gan, Fang-Fang Tang

Research Collection School Of Economics

We study and contrast pricing and price evolution of online only (Dotcom) and online branch of multi-channel retailers (OBMCRs) based on two panel data sets collected from online toy markets. Panel data regression analyses reveal several interesting empirical results: over time, OBMCRs and Dotcoms charge similar prices on average but Dotcoms significantly increase their shipping costs that eventually drive the overall average price of Dotcoms higher than that of OBMCRs. Price dispersions of both types of retailers are persistent. The price dispersion of OBMCRs is higher than that of Dotcoms at the beginning and does not change much over time, …

Standardized Lm Tests For Spatial Error Dependence In Linear Or Panel Regressions, Badi H. Baltagi, Zhenlin Yang

Research Collection School Of Economics

The robustness of the LM tests for spatial error dependence of Burridge (1980) for the linear regression model and Anselin (1988) for the panel regression model are examined. While both tests are asymptotic ally robust against distributional misspecification, their finite sample behavior can be sensitive to the spatial layout. To overcome this shortcoming, standardized LM tests are suggested. Monte Carlo results show that the new tests possess good finite sample properties. An important observation made throughout this study is that the LM tests for spatial dependence need to be both mean- and variance-adjusted for good finite sample performance to be …

Macroeconomic Effects Of Over-Investment In Housing In An Aggregative Model Of Economic Activity, Hian Teck Hoon

Research Collection School Of Economics

Is there a theoretical basis for the view that the end of a period of over-investment necessarily leads to a period of below-normal employment as the excess capital stock is run down? We study the repercussions of a false boom in housing driven by prior expectations of future housing prices not justified by fundamentals. When these expectations are corrected, the result is a precipitous drop in housing prices and, on that account alone, some drop in employment. There is also a bulge in the housing stock. In the closed economy case, the downward shift of the term structure of interest …

A New Bayesian Unit Root Test In Stochastic Volatility Models, Yong Li, Jun Yu

Research Collection School Of Economics

A new posterior odds analysis is proposed to test for a unit root in volatility dynamics in the context of stochastic volatility models. This analysis extends the Bayesian unit root test of So and Li (1999, Journal of Business Economic Statistics) in two important ways. First, a numerically more stable algorithm is introduced to compute the Bayes factor, taking into account the special structure of the competing models. Owing to its numerical stability, the algorithm overcomes the problem of diverged “size” in the marginal likelihood approach. Second, to improve the “power” of the unit root test, a mixed prior specification …

An Asian Response To International Financial Reforms, Hoe Ee Khor, Kim Song Tan

Research Collection School Of Economics

Asia has emerged as a much more important player in the global economy after the recent financial crisis. Together with other emerging market economies, Asia is expected to be a key driver for global economic growth in the near to medium term. Along with this, there is a rising chorus for an “Asian approach” to financial reforms in the region and internationally. There are also calls for Asia to play a bigger role in designing the new architecture for the global financial system.

Smoothing Local-To-Moderate Unit Root Theory, Peter C. B. Phillips, Tassos Magdalinos, Liudas Giraitis

Research Collection School Of Economics

A limit theory is established for autoregressive time series that smooths the transition between local and moderate deviations from unity and provides a transitional form that links conventional unit root distributions and the standard normal. Edgeworth expansions of the limit theory are given. These expansions show that the limit theory that holds for values of the autoregressive coefficient that are closer to stationarity than local (i.e. deviations of the form rho = 1 + c/n, where n is the sample size and c < 0) holds up to the second order. Similar expansions around the limiting Cauchy density are provided for the mildly explosive case. (C) 2010 Elsevier B.V. All rights reserved.

The Sustainability Of The U.S. Current Account Deficit: Revisiting Mann's Rule, Radhames A. Lizardo, Andre V. Mollick

School of Economics and Finance Faculty Publications

Using quarterly data from 1973 to 2008, we provide evidence that current account (CA) deficits exceeding 4.2% of GDP (\"Mann's rule\") do have a significant lowering effect on the U.S. dollar value against major currencies. Controlling for inflation, public debt, and a broad trade weighted index, excessive CA deficits have a negative long-run impact on the USD. Along the transition path, much faster speeds of adjustment to long-run equilibrium are found when current account deficits in excess of Mann's rule are considered: 20% of the deviations from the long-run equilibrium are corrected in a month against 8% or 9% without …