Econometrics Commons^™

How Likely Is It That Omitted Variable Bias Will Overturn Your Results?, Deepankar Basu

Economics Department Working Paper Series

Building on a recently developed methodology for sensitivity analysis that parametrizes omitted variable bias in terms of partial R-Squared measures, I propose a simple statistic to capture the severity of omitted variable bias in any observational study: the probability of omitted variable bias overturning the reported result. The central element of my proposal is formal covariate benchmarking, whereby researchers choose an observed regressor (or a group of observed regressors) to benchmark the relative strength of association of the omitted regressor with the outcome variable and with the treatment variable. These relative strengths of association function as the two sensitivity parameters …

The Economics Of Information And Communication Technologies In Our Society, Augusto Espin

Doctoral Dissertations

Information and Communication Technologies (ICTs) play a fundamental role in today's society. As ICTs they become more mature and widely adopted, societies become more dependent on their use to operationalize daily activities. However, there are multiple societal impacts of ICTs that are not yet well understood. In this dissertation, I explore three different aspects of ICTs that have been widely discussed by media and industry during recent years. I analyze these topics from an economic perspective, contributing to the debate with rigorous modeling and the ensuing discussion of its implications. First, I study the impact that the COVID-19 pandemic had …

Formal Covariate Benchmarking To Bound Omitted Variable Bias, Deepankar Basu

Economics Department Working Paper Series

Covariate benchmarking is an important part of sensitivity analysis about omitted variable bias and can be used to bound the strength of the unobserved confounder using information and judgments about observed covariates. It is common to carry out formal covariate benchmarking after residualizing the unobserved confounder on the set of observed covariates. In this paper, I explain the rationale and details of this procedure. I clarify some important details of the process of formal covariate benchmarking and highlight some of the difficulties of interpretation that researchers face in reasoning about the residualized part of unobserved confounders. I explain all the …

The Yule-Frisch-Waugh-Lovell Theorem For Linear Instrumental Variables Estimation, Deepankar Basu

Economics Department Working Paper Series

In this paper, I discuss three aspects of the Frisch-Waugh-Lovell theorem. First, I show that the theorem holds for linear instrumental variables estimation of a multiple regression model that is either exactly or overidentified. I show that with linear instrumental variables estimation: (a) coefficients on endogenous variables are identical in full and partial (or residualized) regressions; (b) residual vectors are identical for full and partial regressions; and (c) estimated covariance matrices of the coefficient vectors from full and partial regressions are equal (up to a degree of freedom correction) if the estimator of the error vector is a function only …

Alternative Approaches To Labor Values And Prices Of Production: Theory And Evidence, Deepankar Basu, Athanasios Moraitis

Economics Department Working Paper Series

In this paper, we discuss three approaches to estimating classical prices of production(long run equilibrium prices) in both a circulating capital model and a model that includes capital stock: the Standard Interpretation of Marx’s value theory, the New Interpretation of Marx’s value theory, and the Sraffian approach to prices of production. We add two refinements to both models: (a) allowing for differential wages rates across industries; and(b) taking account of unproductive industries in labor value calculations. We implement(a) the circulating capital models using harmonized input-output data from the World Input Output Database for 37 countries for the period 2000–2014, and …

Covariate Benchmarking For Sensitivity Analysis When The Confounder Is Correlated With Observed Covariates, Deepankar Basu

Economics Department Working Paper Series

Covariate benchmarking is an important part of sensitivity analysis about omitted variable bias and can be used to bound the strength of the unobserved confounder using information and judgments about observed covariates. It is common to carry out formal covariate benchmarking under the assumption that the unobserved confounder is orthogonal to the observed covariates. This assumption is restrictive and will be difficult to defended in most empirical analyses. In this paper I show that relaxing the orthogo- nality assumption leads to a breakdown of a recently proposed innovative formal covariate benchmarking methodology.

Four Essays On Peace Consolidation And Ethnic Reconciliation In Postwar Sri Lanka, Narayani Sritharan

Doctoral Dissertations

In four essays, this dissertation explores the process of peace consolidation and economic recovery from the devastating conflict of 1983-2009 in Sri Lanka. This dissertation addresses a timely and important topic. The findings make an important contribution to the literature on economic development and peacebuilding, specifically on the role of foreign aid in alleviating the risks of conflict and helping countries rebuild their economies after conflict. The dissertation highlights important political economy dimensions that help illustrate social and political dynamics that lead to conflict, such as regional and ethnic inequalities, which also influence post-conflict reconstruction. In addition to a historical …

What Drives The Fracking Boom Crime Relationship? A Fixed-Effects Analysis Of Crime During The Pennsylvania Fracking Boom, Webster Batista-Lin

Masters Theses

The rapid expansion of hydraulic fracturing(fracking) over the past two decades has led to an increasing interest in the relationship between natural resource booms and crime. Since the onset of the fracking boom, numerous anecdotal accounts and an increasing body of empirical studies have suggested that fracking has a significant, positive impact on crime. However, the mechanisms behind this relationship are poorly understood. This study uses a high-resolution dataset and a unique, fixed-effects approach to decompose the effect that fracking has on crime into increases due to the introduction of new wells and increases due to the presence of existing …

Long-Run Effects Of Austerity, Guilherme Klein Martins

Economics Department Working Paper Series

This paper provides evidence that austerity shocks have long-run negative effects on GDP. Besides addressing the important gap in the growing fiscal research regarding the short time horizon of the estimations, this paper analyzes two other important assumptions made in the literature regarding the (i) symmetry of episodes of fiscal expansion and con- traction and (ii) uniformity of fiscal multipliers for different sizes of shocks. We use narrative fiscal shocks and propensity score reweighting in a local projections setup to account for the potential endogeneity of austerity policies and the non-linearity of its effects over time. The estimation is also …

Dimensional Analysis And Logarithmic Transformations In Applied Econometrics, Deepankar Basu

Economics Department Working Paper Series

In economics, it is common to use dimensioned variables, e.g. earn- ings (measured in dollars per year), as arguments in the logarithmic function. This is conceptually problematic because a logarithmic func- tion can only take dimensionless quantities as its argument. One way to avoid this conceptual error is to rewrite commonly used logarithmic regressions using an arbitrarily chosen reference unit so that ratios of dimensioned quantities are used in logarithmic functions. With the addition of a zero conditional mean assumption about the reference unit to the standard list of assumptions about asymptotic properties of ordinary least squares estimators, such a …

Capital Nationality And Economic Development, Guilherme Klein Martins

Economics Department Working Paper Series

This paper reviews different literature strands and performs an empirical test to evaluate how capital ownership, particularly its nationality, might affect long-run economic develop- ment. Our results indicate that low and middle-income countries with larger foreign capital stock in 1980 had lower economic growth over the next 39 years. The estimations also indi- cate that these economies developed a less specialized export basket, which became relatively more concentrated in low-tech goods. The results are inverted to high-income economies, for which the effects are positive on GDP growth and export specialization and complexi- fication. The results are in line with the …

Essays On Women And Work In India And On Other-Regarding Preferences, Sai Madhurika Mamunuru

Doctoral Dissertations

This dissertation is a collection of three essays. In Essay I, I explore declining female workforce participation in India and propose the following explanation: Traditionally, Brahmin (upper caste) women were more secluded and did not work outside the house, while non-Brahmin, often poorer, women did. With increased income, non-Brahmin families withdraw women from the workforce in order to signal their enhanced social status. This is a part of a larger process of cultural emulation referred to as the Sanskritization of non-Brahmin families. Using a nationally representative panel dataset, I show, in favor of this hypothesis, that while Brahmin women’s participation …

Data On Fossil Fuel Divestment Commitments Through March 2018, Tyler Hansen, Robert Pollin

Data and Datasets

This dataset includes information on fossil fuel divestment commitments that took place as part of the fossil fuel divestment movement through Mar. 23, 2018. The dataset includes the following variables: name of organization, type of organization, home country of organization, type of divestment commitment, date of divestment commitment, and total assets under management of the organization committing to divest. Divestment commitment data was shared with the authors by 350.org. The authors verified and made corrections to two subsets of the data: organizations with assets under management of at least $1 billion which committed to fully divesting from all fossil fuels, …

Pro-Social Consumer And Firm Behavior In Imperfectly Competitive Regional Agricultural Markets, Jill Fitzsimmons

Doctoral Dissertations

In this dissertation, I combine field research, econometric methods, and economic theory to analyze a market in which both firms’ and consumers’ choices are motivated by social preferences. This work contributes to the fields of behavioral economics, industrial organization, and local food systems economics. The dissertation expands the growing literature on social preferences to incorporate firms’ choices that are motivated by utility maximizing objectives in an environment that allows endogenous equilibrium prices and quantities. Firms with social preferences operate in a competitive environment in which they may face downstream market power. In particular, the research focuses on intermediated Farm to …

Social Structure Of Accumulation In Turkey (1963 – 2015), Osman C. Icoz

Doctoral Dissertations

This dissertation analyzes capitalism in Turkey during post-1963 period from social structure of accumulation (SSA) theory perspective. The SSA theory is a theory of interaction of institutions and capital accumulation over long run. This dissertation will be the first book length study on Turkey using SSA Theory approach. It will enrich the SSA literature by adding a case of Turkey, which is a developing country; and hence it will be another example that SSA framework can be extended outside of US. I observe two different SSAs during the period of interest. The first one is Import Substitution Industrialization (ISI) SSA …

The Linkages Among Market Structure, Market Conduct, And Service Quality: Analysis Of The U.S. Domestic Airline Industry, Amirhossein Alamdar Yazdi

Doctoral Dissertations

As supported by the dynamic structure-conduct-performance (S-C-P) paradigm, market structure affects conduct, and conduct determines firms’ performance (Mckinsey & Company Quarterly, 2008). Several researchers have looked at the S-C-P relationship with focus on price. Boreinstein, 1990; Beutel and McBride, 1992; Kim and Singal, 1993; Morrison, 1996; Veldhuis, 2005; Peters, 2006; Zhang and Round, 2009 looked at the effect of airline mergers on fares; some others have looked at the linkage between the imposition of fees and stock values (Barone, et al., 2012), ticket prices (Henrickson & Scott, 2012; Brueckner, et al., 2015); and some examine the effects of low-cost carriers …

Constraining Labor's “Double Freedom”: Revisiting The Impact Of Wrongful Discharge Laws On Labor Markets, 1979-2014, Eric Hoyt

Doctoral Dissertations

I study the impact of wrongful discharge laws, a form of employment protection in the U.S., on union membership, wages, job tenure, and on-the-job training. There are several important contributions of this work to the previous social science research on the topic: First, I update the legal adoption dataset to 2014. Second, this is the first examination to date of the link between wrongful discharge laws and unions. Third, this is the first analysis that is able to include firm size controls in the investigation of the impact of wrongful discharge laws on wages. Finally, this analysis is the first …

Essays In Financial Economics: Announcement Effects In Fixed Income Markets, James J. Forest

Doctoral Dissertations

ABSTRACT ESSAYS IN FINANCIAL ECONOMICS: ANNOUNCEMENT EFFECTS IN FIXED INCOME MARKETS PHD IN FINANCE MAY 2018 JAMES J FOREST B.A., FRAMINGHAM STATE UNIVERSITY M.S., NORTHEASTERN UNIVERSITY Ph.D., UNIVERSITY OF MASSACHUSETTS – AMHERST Directed by: Professor Hossein B. Kazemi This dissertation demonstrates the use of empirical techniques for dealing with modeling issues that arise when analyzing announcement effects in fixed income markets. It describes empirical challenges in achieving unbiased and efficient parameter estimates and shows the importance of modelling a wide range of macroeconomic announcement effects to avoid omitted variable bias. Employing techniques common in Macroeconomics, financial market researchers are better …

Three Essays On Defending Common-Pool Resources, Lawrence Geest

Doctoral Dissertations

% !TEX root = ../degeest2017dissertation.tex Environmental protection often relies on cooperation between individuals in uncoordinated groups. In cases such as the management of common-pool resources, individuals must not only monitor and enforce behavior within their group to prevent over-exploitation. They must also contend with external threats on the resource like poaching. This dissertation studies how individuals cooperate to manage shared resources and deter shared threats. The first chapter, "Deterring poaching of a common-pool resource", considers the problem of deterring a threat that cannot be perfectly observed. I present results from common pool resource experiments designed to examine the ability of …

Labor Force Participation, Disability, And Implications For Healthcare Utilization And Employment, Lawrence C. Pellegrini

Doctoral Dissertations

The study period (i.e., 1999-2014) is characterized by declining labor force participation rates, rising disability enrollment, varying healthcare utilization, and increasing and changing composition of healthcare provider employment. However, little is known about the effect labor force participation and disability enrollment both have on the US healthcare system (i.e., healthcare utilization and employment). This dissertation is comprised of three manuscripts answering questions related to these relationships. Results show that labor force participation is a more robust indicator than the unemployment rate for exploring the effect of the labor market on healthcare spending and health outcomes, with healthcare spending itself exhibiting …

Three Essays On U.S. Household Debt And The Sources Of Systemic Financial Fragility, Thomas Herndon

Doctoral Dissertations

This dissertation consists of three essays which analyze the role of household debt in the financial crisis of 2007-2009, and weak recovery that followed. In these essays, I pursue the following research topics: 1) Estimation of the effects of mortgage fraud on losses to foreclosure, 2) Estimation of whether loan modifications increased or decreased debt, and 3) Analyzing the historical evolution of housing finance regulation to advance a proposal for reform. While formally independent, these essays share a common theoretical perspective located at the intersection of financial macroeconomics and political economy. These essays analyze how conflicts of interest and inside …

The Labor Share Question In China, Hao Qi

Doctoral Dissertations

In this study I explore why China’s labor share measured by the conventional approach experienced a major decline over the period from the mid-1990s to the outbreak of the global financial and economic crisis in 2008. I adopt a Marxian approach to address this question. Following the Marxian approach, I focus on how the power relation in the sphere of production affects labor’s share. I argue that major changes in the power relation that took place during the transition of China’s economic system have played a crucial role in the changes of distribution. To this end, I build homogenous series …

Financialization Of The Commodities Futures Markets And Its Effects On Prices, Manisha Pradhananga

Doctoral Dissertations

After declining for almost three decades, the food price index of the Food and Agricultural Organization (FAO) rose by 90 percent between January 2002 and June 2008. Besides the magnitude, the rise in prices was remarkable for its breadth, affecting a broad range of commodities including agricultural (wheat, corn, soybeans, cocoa, coffee), energy (crude oil, gasoline), and metals (copper, aluminum). According to the US Department of Agriculture, this price spike was responsible for increasing the number of malnourished people by 80 million. These dramatic developments in prices coincided with a rapid inflow of investment into the commodities futures market -- …

Productive Stagnation And Unproductive Accumulation In The United States, 1947-2011., Tomas N. Rotta

Doctoral Dissertations

My doctoral research addresses the question of how productive and unproductive forms of capital accumulation interact in the United States. My contribution is to first develop a new understanding of the labor theory of value in order to better explain how financial and rentier forms of revenues relate to the wealth created in productive activities. Second, I offer an innovative analysis of historical trends regarding unproductive accumulation in the postwar United States economy. For that purpose, I propose a new methodology to estimate Marxist categories from conventional input-output matrices, national income accounts, and employment data. A core feature of my …

Empirical Studies On The Effectiveness Of Soda Taxes To Curb Obesity, Francesca Colantuoni

Doctoral Dissertations

This dissertation presents a series of empirical studies to evaluate the effectiveness of soda taxes to curb the obesity epidemic. Chapter 1 describes the extent and severity of the obesity problem in the U.S., and discusses the policy interventions that have been proposed or enacted with the intent to fight obesity (e.g., sales taxes). Chapter 2 contains a study on the effect of two tax events on soda consumption: a 5.5% sales tax on soft drinks imposed in Maine in 1991, and a 5% sales tax on soft drinks levied in Ohio in 2003. We investigate this question by using …

Investigating The Ability Of Pro-Social Emotions To Enhance Cooperative Behavior, Lucía A. Vergara Sobarzo

Masters Theses 1911 - February 2014

This research investigates the use of pro-social emotions to improve cooperation. In particular, it tries to reconcile the results from Noussair and Tucker (2007) and Lopez et al. (2010). To reach this goal the experiment considers different degrees of revelation: no revelation, partial and full disclosure of information. Additionally, I use different microeconometric specifications to accommodate different hypothesis about the motivation of the subjects.

My results diverge from those of Lopez et al. because I find that revealing the decision of a single subject at random does not significantly increase cooperation, which is the main result of these authors. Also, …

Zonal And Regional Load Forecasting In The New England Wholesale Electricity Market: A Semiparametric Regression Approach, Jonathan Farland

Masters Theses 1911 - February 2014

Power system planning, reliability analysis and economically efficient capacity scheduling all rely heavily on electricity demand forecasting models. In the context of a deregulated wholesale electricity market, using scheduling a region’s bulk electricity generation is inherently linked to future values of demand. Predictive models are used by municipalities and suppliers to bid into the day-ahead market and by utilities in order to arrange contractual interchanges among neighboring utilities. These numerical predictions are therefore pervasive in the energy industry.

This research seeks to develop a regression-based forecasting model. Specifically, electricity demand is modeled as a function of calendar effects, lagged demand …

Determinants Of Health Care Use Among Rural, Low-Income Mothers And Children: A Simultaneous Systems Approach To Negative Binomial Regression Modeling, Swetha Valluri

Masters Theses 1911 - February 2014

The determinants of health care use among rural, low-income mothers and their children were assessed using a multi-state, longitudinal data set, Rural Families Speak. The results indicate that rural mothers’ decisions regarding health care utilization for themselves and for their child can be best modeled using a simultaneous systems approach to negative binomial regression. Mothers’ visits to a health care provider increased with higher self-assessed depression scores, increased number of child’s doctor visits, greater numbers of total children in the household, greater numbers of chronic conditions, need for prenatal or post-partum care, development of a new medical condition, and …

University Of Massachusetts Housing Study The Economic Impact Component, Center For Economic Development

Center for Economic Development Technical Reports

The Economic Impact Component of the University of Massachusetts Housing study aims to answer two research questions:

1. What are the direct and indirect economic impacts of the housing industry in Massachusetts?

2. What is the significance of housing as a factor in business location decisions?

The first, and primary, question was addressed through a quantitative assessment using the "Local Impact of Homebuilding Model" calibrated by the National Association of Home Builders, The second research question was addressed through a qualitative assessment of area development and site selection literature and policy analyses dealing with business location criteria.

Final Report On The Measurable Indicators Of Economic Success, Center For Economic Development

Center for Economic Development Technical Reports

Across the United States of America people are increasingly interested in ensuring that government expenditures are well spent. We can note this interest at all levels of government ranging from local to national scales. Indeed, increased accountability is a paramount theme of the new Congress. As well, in all of its manifestations, it is a critical element of the "quality movement" that is becoming acculturated in both the private and public sectors.

The notion of accountability implies measurement: In exchange for public tax dollars allocated, increased value will be gained. All government organizations know this intuitively. Yet, few government organizations …