Identifying structural shocks behind loan supply fluctuations in Russia

We examine the drivers behind loan supply fluctuations in Russia using Bayesian vector autoregressive model with sign restrictions on impulse response functions. We identify two types of structural innovations: loan supply shock and monetary stance shock. We find that contractionary shocks of both types contributed significantly and in the roughly equal measure to the decrease of bank lending after the Lehman Brothers collapse.loan supply; Bayesian VAR; sign restrictions; financial crisis; Russia

The Dynamic Effects of Hurricanes in the US: The Role of Non-Disaster Transfer Payments

We know little about the dynamic economic impacts of natural disasters. I examine the effect of hurricanes on US counties’ economies 0-10 years after landfall. Overall, I find no substantial changes in county population, earnings, or the employment rate. The largest empirical effect of a hurricane is observed in large increases in government transfer payments to individuals, such as unemployment insurance. The estimated magnitude of the extra transfer payments is large. While per capita disaster aid averages $356 per hurricane in current dollars, I estimate that in the eleven years following a hurricane an affected county receives additional non-disaster government transfers of$67 per capita per year. Private insurance-related transfers over the same time period average only $2:4 per capita per year. These results suggest that a non-trivial portion of the negative impact of hurricanes is absorbed by existing social safety net programs. The fiscal costs of natural disasters are thus much larger than the cost of disaster aid alone. Because of the deadweight loss of taxation and moral hazard concerns, the benefits of policies that reduce disaster vulnerability, such as climate change mitigation and removal of insurance subsidies, are larger than previously thought. Finally, the substantial increase in non-disaster transfers suggests that the relative resilience of the United States to natural disasters may be in part due to various social safety nets.MIT Energy Fellowship and the National Science Foundatio

Essays in environmental economics

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2012.Cataloged from PDF version of thesis.Includes bibliographical references.This thesis examines various aspects of environmental economics. The first chapter estimates how individuals' beliefs about climate change are affected by local weather fluctuations. Climate change is a one-time uncertain event with no opportunities for learning; the belief updating process may not be fully Bayesian. Using unique survey data on beliefs about the occurrence of the effects of global warming, I estimate how individuals use local temperature fluctuations in forming these beliefs. I test for the presence of several well-known psychological heuristics and find strong evidence for representativeness, some evidence for availability and no evidence for associativeness. I find that very short-run temperature fluctuations (1 day - 2 weeks) have no effect on beliefs about the occurrence of global warming, but that longer-run fluctuations (1 month - 1 year) are significant predictors of beliefs. Only respondents with a conservative political ideology are affected by temperature abnormalities. In the second chapter, I examine the economic impacts of natural disasters by estimating the effect of hurricanes on US counties' economies 0-10 years after landfall. Overall, I find no substantial changes in a county's population, earnings, or the employment rate. The largest empirical effect of a hurricane is observed in large increases in government transfer payments to individuals, such as unemployment insurance. The estimated magnitude of the extra transfer payments is large. While per capita disaster aid averages $356 per hurricane in current dollars, I estimate that in the eleven years following a hurricane an affected county receives additional non-disaster government transfers of$67 per capita per year. Private insurance-related transfers over the same time period average only $2.4 per capita per year. The fiscal costs of natural disasters are thus much larger than the cost of disaster aid alone. Because of the deadweight loss of taxation and moral hazard concerns, the benefits of policies that reduce disaster vulnerability, such as climate change mitigation and removal of insurance subsidies, are larger than previously thought. Finally, the substantial increase in non-disaster transfers suggests that the lack of changes in other economic indicators may be in part due to various social safety nets. In the third chapter, I estimate the extent of adverse selection in area yield insurance. Despite a long-run decrease in developed countries' vulnerability to weather shocks, agriculture worldwide remains susceptible to weather fluctuations. If climate change increases the frequency and intensity of extreme weather events, as it is predicted to do, food prices will likely become more volatile. A well-functioning insurance market is key to keeping the agricultural sector stable. I discuss the institutional and empirical features of the US crop insurance market. I outline the ways in which market designers have attempted to minimize adverse selection and moral hazard, as well as the remaining ways in which the market remains vulnerable to these. I then test for a particular form of adverse selection: whether public information (last year's average yield in the county) that is not explicitly priced by crop insurance companies predicts takeup of area yield insurance plans. I find no evidence that the recent yield influences takeup. I then perform another reduced-form test, using end-of-growing season yields as predictors of insurance takeup at the beginning of the growing season, and find that area yield insurance takeup is higher when average yields are higher. This suggests that the net selection into area yield plans favors providers, not buyers of insurance. In some specifications, the total demand for crop insurance is affected by current and past yields as well, potentially due to changes in the desirability of other plans.by Tatyana Deryugina.Ph.D

The Role of Transfer Payments in Mitigating Shocks: Evidence From the Impact of Hurricanes

Little is known about how aggregate economic shocks are mitigated by social safety nets. I use hurricanes as an exogenous shock to the economics of US counties and show that non-disaster government transfers, such as unemployment insurance and public medical spending, increase substantially in the decade after landfall. Indeed, I estimate that the net present value of the increase in non-disaster transfers is more than double that of direct disaster aid. Among the implications of these findings are that the fiscal costs of natural disasters are much larger than previously thought and that existing social safety net programs help to mitigate the effects of macroeconomic shocks

Analysis of the debt burden in Russian economy sectors

This paper provides an analysis of the debt burden of Russian companies and raises the issue of debt-level heterogeneity across economic sectors. To identify the causes of this heterogeneity, it estimates a regression model that includes both fundamental explanatory variables of companies and industry fixed effects. The results of the analysis demonstrate that standard variables, such as profitability, company size, asset turnover, and fixed-asset turnover ratio have a strong statistical significance. However, these do not fully explain the variation in the debt levels of companies in different sectors. According to model estimation, there are other industry specific factors that produce an imbalance between fundamental factors and companies' debt levels. An understanding of the formation process and structure of debt burden in individual industries is extremely important for the financial stability of companies and for an effective monetary policy

Does Selection in Insurance Markets Always Favor Buyers?

This paper provides empirical evidence of advantageous selection in insurance markets. By using a novel insurance setting where moral hazard is not a concern, I am able to overcome an important obstacle in most studies of selection: the inability to distinguish moral hazard from selection. In the US market for area yield crop insurance, payouts are based on average county yields. Moreover, area yield insurance is only offered in counties where no farmer is large enough to affect the mean yield. I find that area yield insurance takeup is higher when average yields in the county are higher and show that this effect is not being driven by prices. This suggests that the net selection into these plans thus favors insurance providers, not buyers. One possible mechanism is that providers have better information about aggregate yields. Another is that the desirability of other, non-area yield, insurance options changes, a potentially important but previously overlooked driver of selection

When Are Appearances Deceiving? The Nature of the Beauty Premium

We design a laboratory experiment to illuminate the channels through which relatively more attractive individuals receive higher wages. Specifically, we are able to distinguish taste-based discrimination from rational statistical discrimination and biased beliefs. Using three realistic worker tasks to increase the external validity of our results, we find that the “beauty premium” is highly task-specific: while relatively more attractive workers receive higher wage bids in a bargaining task, there is no such premium in either an analytical task or a data entry task. The premium in the bargaining task is driven by biased beliefs about worker performance. We find that there is substantial learning after worker- specific performance information is revealed, highlighting the importance of accounting for longer-run interactions in studies of discrimination

When Are Appearances Deceiving? The Nature of the Beauty Premium

We design a laboratory experiment to illuminate the channels through which relatively more attractive individuals receive higher wages. Specifically, we are able to distinguish taste-based discrimination from rational statistical discrimination and biased beliefs. Using three realistic worker tasks to increase the external validity of our results, we find that the “beauty premium” is highly task-specific: while relatively more attractive workers receive higher wage bids in a bargaining task, there is no such premium in either an analytical task or a data entry task. The premium in the bargaining task is driven by biased beliefs about worker performance. We find that there is substantial learning after worker- specific performance information is revealed, highlighting the importance of accounting for longer-run interactions in studies of discrimination

Development of mathematical education in Penza region

The article is about development of mathematical education and science in Penza region. Author examines main stages of development, classifies institutions of the early XX century and the exam program for the grammar school students. Penza's mathematicians' contribution to world science is mentioned