Economics Commons^™

Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina

Cowles Foundation Discussion Papers

We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children aged 12 to 24 months at baseline. We estimate the determinants of parents’ material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, emphasizing the importance of parenting interventions at an early age.

Innovation Adoption By Forward-Looking Social Learners, Mira Frick, Yuhta Ishii

Cowles Foundation Discussion Papers

Motivated by the rise of social media, we build a model studying the effect of an economy’s potential for social learning on the adoption of innovations of uncertain quality. Provided consumers are forward-looking (i.e., recognize the value of waiting for information), equilibrium dynamics depend non-trivially on qualitative and quantitative features of the informational environment. We identify informational environments that are subject to a saturation effect, whereby increased opportunities for social learning can slow down adoption and learning and do not increase consumer welfare. We also suggest a novel, purely informational explanation for different commonly observed adoption curves (S-shaped vs. concave).

Money As Minimal Complexity, Pradeep Dubey, Siddhartha Sahi, Martin Shubik

Cowles Foundation Discussion Papers

We consider mechanisms that provide traders the opportunity to exchange commodity i for commodity j , for certain ordered pairs ij . Given any connected graph G of opportunities, we show that there is a unique mechanism M G that satisfies some natural conditions of “fairness” and “convenience.” Let M ( m ) denote the class of mechanisms M G obtained by varying G on the commodity set {1, …, m }. We define the complexity of a mechanism M in M (m) to be a pair of integers τ( M ), π( M ) which represent the “time” required …

The Quantity And Quality Adjustment Of Births When Having More Is Not Subsidized: The Effect Of The Tanf Family Cap On Fertility And Birth Weight, Ho-Po Crystal Wong

Economics Faculty Working Papers Series

I examine whether the family cap policy that reduces or eliminates incremental welfare benefits for additional births born to mothers already on welfare would affect both the quantity and quality of births in terms of birth weight. I find that the family cap produces very pronounced effect on reducing out of wedlock birth and low birth weight rates among teenagers. The evidence suggests that the family cap policy might not just produce a deterrent effect on nonmarital childbearing but also a quality effect on birth: those births that actually occur are endowed with better health in terms of birth weight.

Dynamic Moral Hazard Without Commitment, Johannes Hörner, Larry Samuelson

Cowles Foundation Discussion Papers

We study a discrete-time model of repeated moral hazard without commitment. In every period, a principal finances a project, choosing the scale of the project and a contingent payment plan for an agent, who has the opportunity to appropriate the returns of a successful project unbeknownst the principal. The absence of commitment is reflected both in the solution concept (perfect Bayesian equilibrium) and in the ability of the principal to freely revise the project’s scale from one period to the next. We show that removing commitment from the equilibrium concept is relatively innocuous — if the players are sufficiently patient, …

I'M Retiring ... Well, Sort Of, Kevin F. Hallock

Economics Faculty Publications

I’m 45 years old and I’m retiring ... from writing regular columns for workspan. And that has me thinking about retirement and incentives as part of a total rewards system.

The Impact Of Corruption On Consumer Markets: Evidence From The Allocation Of Second-Generation Wireless Spectrum In India, Sandip Sukhtankar

Dartmouth Scholarship

Theoretical predictions of the impact of corruption on economic efficiency are ambiguous, with models allowing for positive, negative, or neutral effects. While much evidence exists on levels of corruption, less is available on its impact, particularly its impacts on consumer markets. This paper investigates empirically the effect of the corrupt sale of spectrum licenses to ineligible firms on the wireless-telecommunications market in India. I find that the corrupt allocation had, at worst, no impact on the number of subscribers, prices, usage, revenues, competition, and measures of quality. I argue that the market-based transfer of licenses to competent firms other than …

Would People Behave Differently If They Better Understood Social Security? Evidence From A Field Experiment, Jeffrey B. Liebman, Erzo F. P. Luttmer

Dartmouth Scholarship

This paper presents the results of a randomized field experiment that provided information about key Social Security features to older workers. The experiment was designed to examine whether it is possible to affect individual behavior using a relatively inexpensive informational intervention about the provisions of a public program and to explore the mechanisms underlying the behavior change. We find that our relatively mild intervention (sending an informational brochure and an invitation to a web-tutorial) increased labor force participation one year later by 4 percentage points relative to the control group mean of 74 percent. (JEL C93, D12, H55)

Price Subsidies, Diagnostic Tests, And Targeting Of Malaria Treatment: Evidence From A Randomized Controlled Trial, Jessica Cohen, Pascaline Dupas, Simone Schaner

Dartmouth Scholarship

Both under- and over-treatment of communicable diseases are public bads. But efforts to decrease one run the risk of increasing the other. Using rich experimental data on household treatment- seeking behavior in Kenya, we study the implications of this trade-off for subsidizing life-saving antimalarials sold over-the-counter at retail drug outlets. We show that a very high subsidy (such as the one under consideration by the international community) dramatically increases access, but nearly one-half of subsidized pills go to patients without malaria. We study two ways to better target subsidized drugs: reducing the subsidy level, and introducing rapid malaria tests over-the-counter. …

عوام الناس کو اپنی ذمے داریوں کا ادراک کرنا ھوگا, Shakeel Dehlvi

Faculty Research - Newspaper and Magazine Articles

No abstract provided.

Waste And Duplication In Nasa Programs: The Need To Enhance U.S. Space Program Efficiency, Bert Chapman

Libraries Faculty and Staff Scholarship and Research

The U.S. Government faces acute budgetary deficits and national debt problems in the Obama Administration. These problems have been brought about by decades of unsustainable government spending affecting all agencies including the National Aeronautics and Space Administration. (NASA). An outgrowth of this fiscal profligacy is the presence of wasteful and duplicative programs within NASA that prevent this agency from achieving its space science and human spaceflight objectives. These problems occur due to mismanagement of these programs from NASA and the creation of these programs by the U.S. Congress and congressional committees. This occurs because congressional appropriators tend to be more …

Income Smoothing Due To Unemployment Concerns, Jeffrey Ng, Tharindra Ranasinghe, Guifeng Shi, I-Hwa Yang

Research Collection School Of Accountancy

Economic theory predicts that top executives and lower-level employees have incentives to smooth income due to compensating wage differential costs and fear of job loss, respectively. Following Agrawal and Matsa (JFE, 2013) who rely on exogenous variations in unemployment insurance benefits to examine how unemployment concerns affect corporate leverage, we examine the link between such benefits and income smoothing. We find that when unemployment insurance benefits are higher and concerns about unemployment are hence lower, there is less income smoothing. This relation is stronger when employees face higher unemployment risk and weaker when the firms’ information and internal control environments …

Decision Making And Underperformance In Competitive Environments: Evidence From The National Hockey League, Gueorgu I. Kolev, Gonçalo Pina, Federico Todeschini

Economics

We find evidence of suboptimal decisions leading to underperformance in a policy experiment where two teams of professionals compete in a tournament (National Hockey League shootout) performing a task (penalty shot) sequentially. Before an exogenous policy change, home teams had to perform the task second in the sequence. After the policy change, home teams were given the choice to lead or to follow in the sequence. Home teams should move first only when this is optimal, and this should lead them to winning the tournament more often.We find that after given the choice, home teams most of the time choose …

Optimal Design Of Trade Agreements In The Presence Of Renegotiation, Giovanni Maggi, Robert W. Staiger

Dartmouth Scholarship

We study the optimal design of trade agreements when governments can renegotiate after the resolution of uncertainty but compensation between them is inefficient. In equilibrium, renegotiation always results in trade liberalization, not protection. The optimal contract may be a "property rule" or a "liability rule". High uncertainty favors liability over property rules, while asymmetries in bargaining power favor property over liability rules. Moreover, optimal property rules are never renegotiated. With a cost of renegotiation, property rules are favored when this cost is higher, reversing a central conclusion of the law-and-economics literature. (JEL C78, D86, F13, F15, K12)

Economic Interrelationships And Impacts Of The Aviation/Aerospace Industry In The State Of Florida Using Input-Output Analysis, Kelly A. Whealan-George

Doctoral Dissertations and Master's Theses

The study provided a detailed description of the interrelatedness of the aviation and aerospace industry with principal industries in Florida and Volusia County (VC) using Input-Output (IO) analysis. Additionally, this research provided an economic impact analysis of the creation of a university research park in Daytona Beach (DB). The economic impact measures included not only direct economic output and industry employment descriptions but also described the multiplier effects in the form of indirect and induced impacts using data for 2012.

This research concluded the average labor income of the aviation and aerospace industry was higher than average labor income in …

Implications Of Globalization For The Output-Inflation Relationship: An Assessment, Joseph P. Daniels, Sandeep Mazumder, David D. Vanhoose

Economics Faculty Research and Publications

During the past two decades, a growing body of research has explored the implications of increased trade and financial openness for the relationship between output and inflation. This paper reviews proposed theoretical channels through which the degree of openness might ultimately affect the output-inflation trade-off and surveys the empirical studies that have sought to determine the net effect of greater openness on this trade-off. In addition, the paper utilizes a single cross-country data set to evaluate, taking into account recent developments in the literature, the likely sign and significance of this net effect. In particular, we find current data imply …

Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong

Cowles Foundation Discussion Papers

We derive mean-unbiased estimators for the structural parameter in instrumental variables models with a single endogenous regressor where the sign of one or more first stage coefficients is known. In the case with a single instrument, the unbiased estimator is unique. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong. We show numerically that unbiasedness does not come at a cost of increased dispersion in models with a single instrument: in this case the unbiased estimator is less dispersed than the 2SLS …

Essays On Spatial Econometrics: Estimation Methods And Applications, Osman Dogan

Dissertations, Theses, and Capstone Projects

This dissertation consists of four essays on the estimation methods and applications of spatial econometrics models. In the first essay, we consider a spatial econometric model containing spatial lags in the dependent variable and the disturbance terms with an unknown form of heteroskedasticity in the innovations. We first prove that the maximum likelihood estimator (MLE) is generally inconsistent when heteroskedasticity is not taken into account in the estimation. We show that the necessary condition for consistency of the MLE depends on the specification of the spatial weight matrices. Then, we extend the robust generalized method of moment (GMM) estimation approach …

Essays On The Impacts Of Quantitative Easing On Financial Markets, Joanne Guo

Dissertations, Theses, and Capstone Projects

Due to the severity of the financial crisis of 2008, the Federal Reserve had attempted a variety of unconventional monetary policy to support the U.S. financial markets at the verge of collapse. The most well-known of the Fed's unconventional monetary policy is quantitative easing, in which it purchased a large amount of government securities from the markets in order to lower longer term interest rates and mortgage rates. The several rounds of quantitative easing had different impacts, intended as well as unintended, on U.S. financial markets and foreign markets. The purpose of this paper is to fully explore the effects, …

It-Enabled Coordination In Electronic Markets: An Experimental Investigation Of The Effects Of Social Communication On Group Buyers, Alexander Pelaez

Dissertations, Theses, and Capstone Projects

Coordination, and the mechanisms by which coordination occurs, represents a significant area of study for economic research, and information technology. Technology enhances communication in both speed and quantity of information and when aligned with appropriate tasks can improve decision-making and task performance. Examining the effect of technology based coordination mechanisms on market platforms provides insight into outcomes as represented by buyer surplus and task completion as well as behaviors, such as network structure and emotional attitudes in economic experiments. Drawing on theory from economics and information systems, larger buyer groups should be able to obtain better prices and extract higher …

Does Financial Openness Affect Economic Growth In Asian Economies? A Case Study In Selected Asian Economies, 1980-2010, Hsinrong Wei

Dissertations, Theses, and Capstone Projects

In recent decades, financial liberalization has been one of the most important strategies for Asian countries to promote growth. However, debate emerges following several financial crises on whether liberalizing financial markets and allowing for free access to international capital markets, would benefit or impede economic development. The objective of this study is to examine the impact of financial openness on selected seventeen Asian economies and answer the three questions: 1. Is there any linkage between financial openness and economic growth for these seventeen Asian countries? 2. Does any of the financial openness pose positive or negative effects? 3. If no …

Shrinkage Estimation Of Dynamic Panel Data Models With Interactive Fixed Effects, Xun Lu, Liangjun Su

Research Collection School Of Economics

We consider the problem of determining the number of factors and selecting the proper regressors in linear dynamic panel data models with interactive fixed effects. Based on the preliminary estimates of the slope parameters and factors a la Bai and Ng (2009) and Moon and Weidner (2014a), we propose a method for simultaneous selection of regressors and factors and estimation through the method of adaptive group Lasso (least absolute shrinkage and selection operator). We show that with probability approaching one, our method can correctly select all relevant regressors and factors and shrink the coefficients of irrelevant regressors and redundant factors …

Sieve Instrumental Variable Quantile Regression Estimation Of Functional Coefficient Models, Liangjun Su, Tadao Hoshina

Research Collection School Of Economics

In this paper, we consider sieve instrumental variable quantile regression (IVQR) estimation of functional coefficient models where the coefficients of endogenous regressors are unknown functions of some exogenous covariates. We approximate the unknown functional coefficients by some basis functions and estimate them by the IVQR technique. We establish the uniform consistency and asymptotic normality of the estimators of the functional coefficients. Based on the sieve estimates, we propose a nonparametric specification test for the constancy of the functional coefficients, study its asymptotic properties under the null hypothesis, a sequence of local alternatives and global alternatives, and propose a wild-bootstrap procedure …

Love, Money And Old Age Support: Does Parental Matchmaking Matter?, Fali Huang, Ginger Zhe Jin, Lixin Colin Xu

Research Collection School Of Economics

Parental involvement in matchmaking may distort the choice of spouse because parents are willing to substitute love for market and household production, which are more sharable between parents and their children. This paper finds supportive evidence in a survey of Chinese couples. In both rural and urban areas, parent matchmaking is associated with less marital harmony between the couple, more submissive wives, and a stronger belief in old age support for the son. In contrast, its association with couple income differs by rural and urban regions, perhaps because of differences in earning opportunities and in the enforcement of the one-child …

The True Limit Distributions Of The Anderson-Hsiao Iv Estimators In Panel Autoregression, Peter C. B. Phillips, Chirok Han

Research Collection School Of Economics

This note derives the correct limit distributions of the Anderson-Hsiao (1981) levels and differences instrumental variable estimators, provides comparisons showing that the levels IV estimator has uniformly smaller variance asymptotically as the cross section (n) and time series (T) sample sizes tend to infinity, and compares these results with those of the first difference least squares (FDLS) estimator. (C) 2014 Elsevier B.V. All rights reserved.

Nonparametric Testing For Anomaly Effects In Empirical Asset Pricing Models, Sainan Jin, Liangjun Su, Yonghui Zhang

Research Collection School Of Economics

In this paper, we propose a class of nonparametric tests for anomaly effects in empirical asset pricing models in the framework of nonparametric panel data models with interactive fixed effects. Our approach has two prominent features: one is the adoption of nonparametric functional form to capture the anomaly effects of some asset-specific characteristics and the other is the flexible treatment of both observed/constructed and unobserved common factors. By estimating the unknown factors, betas, and nonparametric function simultaneously, our setup is robust to misspecification of functional form and common factors and avoids the well-known "error-in-variable" problem associated with the commonly used …

Revolving Door Legislation: An International Comparison, Jim Porter, Josh Smith, Seth Muhlestein

Research on Capitol Hill

No abstract provided.

State Failure And Political Instability: The Impact Of Educational Attainment In Africa, Jesse D. Neugarten

Undergraduate Economic Review

I investigate the role of educational attainment on state failure and political stability across the African continent. For the empirical analysis, I estimate a Linear Probability Model (LPM) for State Failure by Ordinary Least Squares (OLS). I hypothesize that differences in educational attainment in Africa can explain differences in political stability and state failure. Furthermore, I believe that this effect has persisted over time and that early educational attainment in the late colonial and early independence era is a significant determinant of state affairs in more recent times. I find that early secondary educational attainment explains higher state stability, while …

Mandate-Based Health Reform And The Labor Market: Evidence From The Massachusetts Reform, Jonathan T. Kolstad, Amanda E. Kowalski

Upjohn Institute Working Papers

We model the labor market impact of the key provisions of the national and Massachusetts "mandate-based" health reforms: individual mandates, employer mandates, and subsidies. We characterize the compensating differential for employer-sponsored health insurance (ESHI) and the welfare impact of reform in terms of "sufficient statistics." We compare welfare under mandate-based reform to welfare in a counterfactual world where individuals do not value ESHI. Relying on the Massachusetts reform, we find that jobs with ESHI pay $2,812 less annually, somewhat less than the cost of ESHI to employers. Accordingly, the deadweight loss of mandate-based health reform was approximately 8 percent of …

The Cost Of College: A Full Accounting, Michael Hemesath

Administration Publications

No abstract provided.