200 research outputs found

    ELECTORAL SYSTEMS, POVERTY AND INCOME INEQUALITY

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    In this article we use the high-quality data coming from the Luxembourg Income Study Project, in a panel framework, to test for the effects of electoral systems on both poverty and income Inequality. We find that when de degree of proportionality of an electoral system increases, inequality and poverty decrease. We also find than in presidential regimes, the levels of poverty and inequality are higher than in parliamentary regimes.Income Inequality, Poverty, Electoral Systems, Transfer Expenditure.

    Robust regression in Stata.

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    In regression analysis, the presence of outliers in the data set can strongly distort the classical least squares estimator and lead to unreliable results. To deal with this, several robust-to-outliers methods have been proposed in the statistical literature. In Stata, some of these methods are available through the commands rreg and qreg. Unfortunately, these methods only resist to some specific types of outliers and turn out to be ineffective under alternative scenarios. In this paper we present more effective robust estimators that we implemented in Stata. We also present a graphical tool that allows recognizing the type of existing outliers.S-estimators; MM-estimators; Outliers; Robustness;

    Estimating Nonlinearities in Spatial Autoregressive Models

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    In spatial autoregressive models, the functional form of autocorrelation is assumed to be linear. In this paper, we propose a simple semiparametric procedure, based on Yatchew's (1998) partial linear least squares, that relaxes this restriction. Simple simulations show that this model outperforms traditional SAR estimation when nonlinearities are present. We then apply the methodology on real data to test for the spatial pattern of voting for independent candidates in US presidential elections. We Ô¨Ānd that in some counties, votes for ‚Äúthird candidates‚ÄĚ are non-linearly related to votes for ‚Äúthird candidates‚ÄĚ in neighboring counties, which pleads for strategic behavior.Spatial econometrics; semiparametric estimations

    Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations

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    This paper makes three contributions. (1) It summarizes in tabular form a recent literature made of 36 micro-econometric studies for 16 different countries on the relationship between export destination and firm performance. (2) It reports estimates of the productivity premium of German firms exporting to the Euro-zone and beyond, controlling for unobserved time invariant firm specific effects, and tests for self-selection of more productive firms into exporting beyond the Euro-zone. (3) It corrects a serious flaw in hitherto published studies that ignore the potentially disastrous consequences of extreme observations, or outliers. The paper shows that estimates of the exporter productivity premium by destination are driven by a small share of outliers. Using a "clean" sample without outliers the estimated productivity premium of firms that export to the Euro-zone only is no longer much smaller that the premium of firms that export beyond the Euro-zone, too, and the premium itself over firms that serve the German market only is tiny. Furthermore, an ex-ante differential that is statistically significant and large only shows up for enterprises that exported to the Euro-zone already and start to export to countries outside the Euro-zone. These conclusions differ considerably from those based on non-robust standard regression analyses.robust estimation, panel data, exporter productivity premium, export destinations

    Does Aid Induce Brain Drain? The Effect of Foreign Aid on Migration Selection

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    Recent evidence suggests that aid induces migration. However, total migration is quite general from a policy perspective since what explains the welfare consequences of migration is the extent of emigration selection. In this paper we ask whether skilled or unskilled migration is more sensitive to aid and to the different mechanisms through which aid may affect self-selection among international emigrants. We show that aid induces positive selection. And that the effect on skilled migration is larger than the effect on unskilled migration. As possible mechanisms to explain the relation, we find that aid induces skilled migration by reducing transaction and information costs, by improving the distribution of schooling, and by helping to overcome liquidity constraints.Foreign aid, International migration, Self-selection, Brain drain.

    Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium

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    In empirical studies it often happens that some variables for some units are far away from the other observations in the sample. These extreme observations, or outliers, often have a large impact on the results of statistical analyses ‚Äď conclusions based on a sample with and without these units may differ drastically. While applied researchers tend to be aware of this, the detection of outliers and their appropriate treatment is often dealt with in a rather sloppy manner. One reason for this habit seems to be the lack of availability of appropriate canned programs for robust methods that can be used in the presence of outliers. Our paper intents to improve on this situation by presenting a highly robust method for estimation of the popular linear fixed effects panel data model, and to supply Stata code for it. In an application from the field of the micro-econometrics of international firm activities we demonstrate that outliers can indeed drive results.Stata, outliers, panel data, robust estimation, exporter productivity premium

    Robinson's Squareroot-of-n-consistent Semiparametric Regression Estimator in Stata

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    This paper describes Robinson's (1988) double residual semiparametric regression estimator and Hardle and Mammen's (1993) specification test implementation in Stata. Some simple simulations illustrate how this newly coded estimator outperforms the already available semiparametric plreg command.Semipar; Semiparametric estimation

    Untalented but Successful

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    When studying the problem of the emergence of superstars, scholars face great difficulties in measuring talent, obtaining confidential data on earnings, and finding econometric techniques that lead to results that are robust to the presence of outliers (superstars). In this paper we use an original dataset from the Pokemon trading card game in which (i) there is no unidentifiable heterogeneity and (ii) all characteristics of individuals are public domain. To prevent the results to be distored by the presence of outliers, we estimate the ¬ęfair¬Ľ price of each individual, using the robust ¬ęLeast Trimmed of Squares¬Ľ regression technique in a hedonic prices framework, and check the effective price at which they are sold. This allows to identify superstars, i.e. individuals that are sold at a price which represents several times their intrinsec value. We find that the two main theories of superstars developed by Rosen (1981), who awards a central importance to talent, and by Adler (1985), who awards more importance to the need of consumers to share a common culture are complementary and not mutually exclusive as is often claimed.Superstars, robust estimation, hedonic prices, leisure games.

    The Positive Causal Impact of Foreign Direct Investment on Productivity: A Not So Typical Relationship

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    Previous research has argued that foreign direct investment (FDI) exerts a positive and causal impact on the productivity of the recipient countries. However, we find that there is little macroeconomic evidence that FDI fosters productivity growth in recipient countries, including in those with high absorptive capacity, once we use an instrumental variables (IV) estimator robust to outliers.Foreign Direct Investment, Productivity, Robust Regression.

    Comparative Politics and Environmental Commitments

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    Economists and Political scientists have suggested for a long time that democracy and the environment are linked. What they did not analyze in detail is ifthe way in which politicians are elected influences the environment as well. Thescope of this paper is to fill this gap. Using high quality data on a cross section of countries, coming from previous studies, we find strong results suggestingthat politicians in majoritarian systems are less interested in environmental commitments than those in proportional representations. The consequence is thatenvironmental commitments are lower in the former system than in the latter
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