Identication and Estimation of Engel Curves with Endogenous and Unobserved Expenditures

When dealing with the estimation of Engel curves, measurement errors in expenditure data and simultaneity are likely sources of endogeneity. In this paper we study identication of the parameters that characterize an Engel curve in the presence of both. We consider specications where budget shares are polynomials in the logarithm of total expenditure, which is the case frequently encountered in empirical applications. We propose an estimation procedure which is an extension of that in Lewbel (1996), and exploits a control function assumption to correct for the endogeneity of the true unobserved total expenditure

Misreported schooling, multiple measures and returns to educational qualifications

We provide a number of contributions of policy, practical and methodological interest to the study of the returns to educational qualifications in the presence of misreporting. First, we provide the first reliable estimates of a highly policy relevant parameter for the UK, namely the return from attaining any academic qualification compared to leaving school at the minimum age without any formal qualification. Second, we provide the academic and policy community with estimates of the accuracy and misclassification patterns of commonly used types of data on educational attainment: administrative files, self-reported information close to the date of completion of the qualification, and recall information ten years after completion. We are in the unique position to assess the temporal patterns of misreporting errors across survey waves, and to decompose misreporting errors into a systematic component linked to individuals' persistent behaviour and into a transitory part reflecting random survey errors. Third, by using the unique nature of our data, we assess how the biases from measurement error and from omitted ability and family background variables interact in the estimation of returns. On the methodological front, we propose a semi-parametric estimation approach based on balancing scores and mixture models, in particular allowing for arbitrarily heterogeneous individual returns

Roadblocks on the Road to Grandma's House: Fertility Consequences of Delayed Retirement

This paper investigates the role of childcare provided by grandparents for the fertility decisions of their offspring. We exploit a decade of pension reforms in Italy that mandated the grandparental generation to a working horizon longer than they would have had otherwise. We argue that the rise in retirement age meant a negative shock to the supply of informal childcare for the next generation. Our results show that one additional grandparent available in the early child-bearing years increases by about five percent the number of children. We show that the fertility effects of delayed retirement are limited to close-knits with a strong familistic structure. The result is not just the mechanical consequence of delayed exit from parental home, of more investment in education or of more attachment to the labour market. In light of the Italian lowest low fertility we conclude that pension reforms may have had unintended inter-generational effects. This conclusion is consistent with the sharp drop in total fertility documented by official statistics for the most conservative areas of the country

Counting rotten apples: Student achievement and score manipulation in Italian elementary Schools

We derive bounds on the distribution of math and language scores of elementary school students in Italy correcting for pervasive manipulation. A natural experiment that randomly assigns external monitors to schools is used to deal with endogeneity of manipulation, as well as its mismeasurement in the data. Bounds are obtained from properties of the statistical model used to detect classes with manipulated scores, and from restrictions on the relationship between manipulation and true scores. Our results show that regional rankings by academic performance are reversed once manipulation is taken into account

Counting Rotten Apples: Student Achievement and Score Manipulation in Italian Elementary Schools

We derive bounds for the average of math and language scores of elementary school students in Italy correcting for pervasive score manipulation. Information on the fraction of manipulated data is retrieved from a natural experiment that randomly assigns external monitors to schools. We show how bounds can be tightened imposing restrictions on the measurement properties of the manipulation indicator developed by the government agency charged with test administration and data collection. We additionally assume that manipulation is more likely in those classes at the lower end of the distribution of true scores. Our results show that regional rankings by academic performance are reversed once manipulation is properly taken into account

Implementation of ultrasonic sensing for high resolution measurement of binary gas mixture fractions

We describe an ultrasonic instrument for continuous real-time analysis of the fractional mixture of a binary gas system. The instrument is particularly well suited to measurement of leaks of a high molecular weight gas into a system that is nominally composed of a single gas. Sensitivity < 5 × 10−5 is demonstrated to leaks of octaflouropropane (C3F8) coolant into nitrogen during a long duration (18 month) continuous study. The sensitivity of the described measurement system is shown to depend on the difference in molecular masses of the two gases in the mixture. The impact of temperature and pressure variances on the accuracy of the measurement is analysed. Practical considerations for the implementation and deployment of long term, in situ ultrasonic leak detection systems are also described. Although development of the described systems was motivated by the requirements of an evaporative fluorocarbon cooling system, the instrument is applicable to the detection of leaks of many other gases and to processes requiring continuous knowledge of particular binary gas mixture fractions

Identication and Estimation of Engel Curves with Endogenous and Unobserved Expenditures

When dealing with the estimation of Engel curves, measurement errors in expenditure data and simultaneity are likely sources of endogeneity. In this paper we study identication of the parameters that characterize an Engel curve in the presence of both. We consider specications where budget shares are polynomials in the logarithm of total expenditure, which is the case frequently encountered in empirical applications. We propose an estimation procedure which is an extension of that in Lewbel (1996), and exploits a control function assumption to correct for the endogeneity of the true unobserved total expenditure