Institutions and Economic Performance: Endogeneity and Parameter Heterogeneity

The hallmark of the recent development and growth literature is a quest to identify institutions that explain a significant portion of the observed differences in living standards across countries. Empirical work in the area focuses almost exclusively on either the global sample or on developing nations. Certainly it is important to know which institutions are lacking in these developing countries, but the analysis provides little evidence for us to know to what extend a common set of institutions actually matters in advanced and developing countries. In this paper we examine parameter heterogeneity in prominent approaches to institutions and economic performance. We find that a new set of instruments is necessary to control for endogeneity, but that a common set of economically important institutions does indeed exist among advanced and developing nations. The impact of these institutions does vary substantially across samples; it is about three times as high in developing countries as compared to OECD countries

Institutions and Economic Performance: Endogeneity and Parameter Heterogeneity

The hallmark of the recent development and growth literature is the quest to identify institutions that explain significant portions of the observed differences in living standards. There are two drawbacks to the prominent approaches that focus either on the global sample, or on developing nations. First, it is unclear whether the identified institutions also hold explanatory power in advanced countries. Second, it is unclear whether the identified institutions matter to the same degree across all countries, or whether perhaps an altogether different set of institutions matters in advanced countries. To address these issues, we examine parameter heterogeneity in prominent approaches to institutions and economic performance. We find that parameter heterogeneity is so strong that it requires a new set of instruments to control for endogeneity. At the same time, however, we confirm that a common set of economically important institutions does exist among advanced and developing nations. The impact of these institutions is shown to vary substantially across subsamples; they are about three times important in developing countries as in OECD countries.

The Impact of Institutions on Economic Performance

This dissertation analyzes the importance of institutions for economic performance. The first two chapters assess the importance of institutions empirically, while the last one provides a dynamic model of institutional change. Chapter 1 analyzes the robustness of institutions in growth regressions by means of the Bayesian Model Averaging methodology to find that institutions and public health are important and robust determimants of economic growth. Chapter 2 assesses the importance of institutional variables for determining income per capita in OECD countries by means of introducing new instrumental variables. Given the paramount role of institutions for economic development established in the first two chapters and, more importantly, in prominent recent contributions to the literature, the last chapter tries to answers the question why countries trying to improve their institutional framework may fail

Choosing God, Choosing Schools: a Study of the Relationship between Parental Religiosity and School Choice

Over the last several decades, school choice – in the context of educational systems that are available to choose from as well as the reasons why parents choose what they do for their child – has become a topic of interest to both educational researchers and the public at large. The Seventh-day Adventist school system, like other faith-based institutions, is uniquely positioned in this subject, as it is an educational organization framed by a religious denomination. In addition to the typical factors such as academic standards, curricular offerings and peer influence, the issue of school choice within this context also involves complex layers of culture and religiosity and spirituality. Are parents able to disengage themselves from the trappings of those expectations and beliefs and objectively choose a school system for their child? Or are religious background and experience simply too embedded into one’s psyche – and, as an extension – one’s choices to ever fully disentangle that subtext from the decision-making process? This mixed-methods study sought to better understand the relationship between parental religiosity and school choice, specifically within the Seventh-day Adventist denomination. In order to assess the influence of Adventist culture, doctrinal commitment and general religiosity, a cultural domain had to first be established. Following the methodology as laid out in cultural consensus theory, free-listing and rank-ordering tasks were given to two separate, geographically representative samples from across the continental United States. Derived from those conversations, statements were then developed that captured characteristics and behavior of a member who adhered to traditional Seventh-day Adventist culture. Those statements were written into the survey instrument, alongside validated scales for general religiosity and Adventist doctrinal commitment. The population for this study targeted any Seventh-day Adventist member in America who had K-12 school-aged children. The survey was developed in SurveyMonkey and distributed through church communiqué (websites, bulletins, announcements, etc.), official administrative channels such as ministerial department newsletters and video announcements, and social media. Over 1,000 responses came in and the data was analyzed through SPSS, specifically examining patterns of school choice among those with high or low general religiosity, doctrinal commitment and Adventist culture. The results of the data analysis demonstrated clear and significant associations between several key variables and the dependent variable of school choice. Several variables, such as Adventist culture, doctrinal commitment and a parent’s own educational background, emerged as predictors for school choice when binary logistic regressions were conducted. Adventist culture proved to be a multi-factorial construct, interacting with other variables in different ways. The conclusions from this study point to several implications for K-12 Adventist education, particularly in the area of marketing to Adventist families and further research could certainly explore that more fully

Preferences for Health Insurance in Germany and the Netherlands – A Tale of Two Countries

This contribution contains an international comparison of preferences. Using two Discrete Choice Experiments (DCE), it measures willingness to pay for health insurance attributes in Germany and the Netherlands. Since the Dutch DCE was carried out right after the 2006 health reform, which made citizens explicitly choose a health insurance contract, two research questions naturally arise. First, are the preferences with regard to contract attributes (such as Managed-Care-type restrictions of physician choice) similar between the two countries? Second, was the information campaign launched by the Dutch government in the context of the reform effective in the sense of reducing status quo bias? Based on random-effects Probit estimates, these two questions can be answered as follows. First, while much the same attributes have positive and negative willingness to pay values in the two countries, their magnitudes differ, pointing to differences in preference structure. Second, status quo bias in the Netherlands is one-half of the German value, suggesting that Dutch consumers were indeed made to bear the cost of decision making associated with choice of a health insurance contract.preference measurement, willingness to pay, health insurance, discrete-choice experiments, health reform, Germany, Netherlands

Quantum Mechanical Propagators in Terms of Hida Distributions

We review some basic notions and results of White Noise Analysis that are used in the construction of the Feynman integrand as a generalized White Noise functional. After sketching this construction for a large class of potentials we show that the resulting Feynman integrals solve the Schroedinger equation

The Impact of Institutions on Economic Performance

This dissertation analyzes the importance of institutions for economic performance. The first two chapters assess the importance of institutions empirically, while the last one provides a dynamic model of institutional change. Chapter 1 analyzes the robustness of institutions in growth regressions by means of the Bayesian Model Averaging methodology to find that institutions and public health are important and robust determimants of economic growth. Chapter 2 assesses the importance of institutional variables for determining income per capita in OECD countries by means of introducing new instrumental variables. Given the paramount role of institutions for economic development established in the first two chapters and, more importantly, in prominent recent contributions to the literature, the last chapter tries to answers the question why countries trying to improve their institutional framework may fail.Institutions; growth regressions; Bayesian Model Averaging; Economic Development; OECD subsample; political and economic Institutions; formal and informal institutions; institutional change